Sir Tony Blair has piled pressure on Andy Burnham to back new North Sea drilling after his think-tank called for Rosebank and other key projects to proceed.
A new report by the Tony Blair Institute (TBI) calls for the Labour government to adopt ‘a serious energy strategy’ by giving the green light to Rosebank, off Shetland, and establishing ‘a stable policy and fiscal framework for further commercially viable North Sea projects’.
It also warns that delaying new projects ‘risks accelerating the basin’s decline’ and will ‘close off investment opportunities tomorrow’.
It also said that Wednesday’s Budget should set out ‘a predictable fiscal framework that encourages commercially viable investment’.
The report led to renewed calls by industry bosses to back Rosebank and provide an early end to the windfall tax on oil and gas profits.
In the report, the TBI says that the Budget should set out ‘a change in energy strategy’.
Tony Blair’s think-tank, the Tony Blair Institute, has published a new report that recommends moving forward with plans to develop the Rosebank oil field
It says: ‘Following the approval of the Jackdaw gas field in the North Sea, ministers should approve the Rosebank oil and gas field, and establish a stable policy and fiscal framework for further commercially viable North Sea projects.
‘Rosebank should signal confidence in the basin’s remaining future, giving operators and suppliers the certainty to commit capital, retain skilled workers and maintain the infrastructure on which subsequent developments will depend. Isolated approvals amid continuing uncertainty will not provide that confidence.’
It goes on: ‘Delay risks accelerating the basin’s decline. Without a credible investment pipeline, operators could bring forward decommissioning, suppliers could withdraw and skilled workers could leave. This risks reducing future production and tax revenues while bringing forward decommissioning expenditure and associated tax relief.
‘Once shared infrastructure closes and supply chains disperse, remaining resources can become uneconomic to develop; decisions deferred today can close off investment opportunities tomorrow.’
The report highlights Rosebank developer Adura’s estimates that the project represents £8.7billion of investment and could support £24.3billion in gross value added (GVA) for the UK economy. It also highlights other potential developments like Cambo, also off Shetland, which could provide £13.7billion in GVA.
The Institute also says that the Rosebank development can provide £2.6billion of additional direct and supply chain tax revenues between 2026-27 and 2035-36.
Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, said: ‘This is a hugely welcome intervention from Sir Tony Blair’s institute, which recognises what we have been arguing for many years, which is that a successful energy strategy must deliver affordable power, protect jobs, strengthen energy security and support economic growth.
‘We all agree that net zero is the destination, but the UK has spent too long pursuing arbitrary targets while overlooking the economic consequences of its decisions.
‘We need a pragmatic, grown-up approach to the energy transition which recognises that oil and gas will remain essential to our economy for decades to come as we make that transition.
‘The approval of Jackdaw was an important first step, but Rosebank and others must follow without delay. More importantly, we need a stable and competitive fiscal regime which unlocks the next generation of North Sea projects, rather than forcing investors, jobs and tax revenues overseas.
‘The North Sea remains one of Britain’s greatest economic assets, with the skills, infrastructure and supply chains needed to deliver both our energy security today and the transition to cleaner energy tomorrow.
‘Sir Tony Blair’s institute is right to put affordability and competitiveness at the heart of energy policy. The Government now has an opportunity to turn that common sense into action, starting with Rosebank and an early end to the energy profits levy in the Budget.’
The report highlighted the Jackdaw gas field as an important first step towards future North Sea projects
He added: ‘We cannot build a stronger, more prosperous Britain by deliberately managing the decline of one of its most important industries.’
A spokesman for the Department for Energy Security and Net Zero said: ‘Any decision will be made through the quasi-judicial process, taking into account all relevant evidence, including environmental assessments and public representations received as part of the regulatory process.’
At its conference in Aberdeen earlier this month, the SNP passed a motion supporting domestic drilling over foreign imports.
But the Scottish Government is not expected to formally adopt a new position until it publishes its energy strategy, which is not expected until later next year.
Asked directly at Holyrood if the Scottish Government welcomes the approval of Jackdaw last week and supports Rosebank getting consent, Deputy First Minister Jenny Gilruth said: ‘The approval of Jackdaw of course was a decision for the UK Government, who have arrived at that decision.
‘It has taken too long, in our view, to come to that decision. That has created uncertainty but with that certainty we very much hope we will be able to move forward and the jobs that will be created as a result will be a benefit to the local economy.’
A spokesman for the First Minister John Swinney said decisions on new projects should take place ‘on a case by case basis with energy security and climate compatibility as key considerations’ and said that the Scottish Government would confirm the timing and contents of the energy strategy ‘in due course’.
He also said the UK Government should take a decision on Rosebank ‘based on the evidence presented’.
