Rosebank has been given the go ahead today despite the repeated warnings of the IEA.
The approval is in no small part due to the fact that there is no price on pollution at the point of production.
Ironically the windfall tax has not disincentivised further development because the “investment allowance” allows companies to claim tax relief on investments. This investment allowance, deemed a “huge tax subsidy” by the Institute for Fiscal Studies, means that for every £100 an oil and gas company spends on new oil and gas, they get roughly £45 off their tax bill. The government will forgo 4 billion of the levy. The same investment allowances were not granted to renewable energy generators and the Electricity Generation Levy was only applied to renewable and low carbon generators!
The approval comes despite the best efforts of many and not just the usual suspects. In August, 50 MPs and peers from all major parties urged the then energy secretary Grant Shapps to block Rosebank, arguing it could produce 200m tonnes of carbon dioxide and that most of the cost of the development would be shouldered by taxpayers. Carbon Brief’s Simon Evans tweeted this morning that burning all its production – some 300m+ barrels of oil & gas – would be equivalent to the annual emissions of around 90 countries and 400m people!
This 2022 Carbon Brief analysis looks at the question Can new UK oil and gas licences ever be ‘climate compatible’, also note this comprehensive analysis of the Prime Minister’s climate policy speech last week.
James Dyke, associate professor in earth system science at Exeter University, explains why the decision on Rosebank is so harmful.
There was discussion on World at One today, R4 (13.07 – 13.23), Dave Vince (founder Ecotricity) pointed out that the 4 billion foregone taxes could have been invested in solar which would lead to more jobs, cheaper energy and higher energy security. He also stated the need for a carbon tax on fossil fuels produced in the North Sea.