Jackdaw Gas Field

Earl Russell Excerpts

Tuesday 27th October 2026 Lords Chamber

[Lord Moynihan (Con)]

My Lords, I declare my interests as chair of Amey, Acteon and Buckthorn. I start by warmly congratulating the Government on approving production from the Jackdaw field, which will strengthen our energy independence and security, and add substantial tax revenues to the Treasury. Will the Minister now confirm that the Government are looking to approve the tie-backs from the Tornado field to the Greater Laggan infrastructure, the Abbey and Baker field tie-back in the southern basin, the Kyla development tie-back to the Bittern infrastructure, and the Montrose infill, a subsea tie-back?

Does the Minister agree with Offshore Energies UK, which says that the industry has identified 111 projects within existing licences that could unlock £50 billion-worth of private investment, create thousands of jobs, generate substantial tax income to the Government and, importantly, reduce the higher carbon emissions from either imported gas from Norway or, indeed, LNG from the US? With OEUK estimating that there could be more than double the Government’s projections, does she recognise that the Government may have underestimated the recoverable gas reserves within the UKCS? Given that the Government are in the spirit of supporting the production of domestic oil and gas expansion, perhaps she could commit to reviewing those current projections as well?

We warmly welcome Ed Miliband’s damascene conversion to supporting oil production, and on a major scale, as evidenced by his approval this month of the production licence for the giant Sea Lion oilfield, with gross full-field 2C resources estimated at up to 917 million barrels of oil located 220 kilometres north of East Falkland, with the production sold into international oil markets via offtake tankers. We are glad that the Foreign Secretary believes in the policy of exporting our oil, not least given the fact that the Government have recently overseen the closure of two of our six refineries. Will the Minister confirm for the record that the Foreign Secretary had every right to turn down the production licence under the Offshore Minerals Ordinance 1994 but chose not to? For the record, I should inform the House that I know that ordinance well, having been party to the previous 1992 ordinance when I was Minister for Energy.

Rosebank is half the size of Sea Lion. So, given this recent history of government decisions, can the Minister provide the House with any intellectually sound arguments that the Government can muster to reject Rosebank while approving oil from the Sea Lion field to be sold on international markets and, indeed, gas from Jackdaw? Can the Minister tell the House whether she agrees with the Prime Minister and the Chancellor that the economic case for approving Rosebank is inarguable, or with the Energy Secretary, who has recently been deserted from her post by the Foreign Secretary on this subject, that the field should remain undrilled?

Unlike Jackdaw, which is already near complete construction, Rosebank could add nearly 500 full-time equivalent jobs on average over its lifetime, including decommissioning. In addition, this project would generate billions in tax revenue. Does the Minister see the approval of Rosebank as an opportunity to regenerate the northern Scottish economy and one that the Government must take?

In 2024, at the end of the Conservative Government’s time in office, UK fossil fuel dependency was 75.1%—a record low. It is, of course, the final burning of hydrocarbons, not their extraction and production from the North Sea, that creates the CO emissions. Yet under this Government, fossil fuel dependency this winter is predicted to rise to 76.6%, which covers all our energy needs, including transport, heating and electricity generation. For as long as this lasts, does the Minister agree that we should maximise UKCS production to minimise our exposure to imported LNG and oil and gas products, including imported aviation fuel refined from Russian crude in India, which is part of the aviation fuel used on every flight taking off today and every day from Heathrow and Gatwick?

[Earl Russell (LD)]

My Lords, we recognise the logic of this decision, but approving a new gas field in a climate crisis is proof that Britain has not moved nearly fast enough to cut demand for gas in our homes and transport. Jackdaw was licensed decades ago. The decision is late because the Conservative Government failed to do the necessary preparations, and North Sea workers in the industry have paid the cost ever since. We accept that gas will be needed for decades during the transition, but burning fossil fuels causes climate change, and this summer’s wildfires and heat waves show us the true cost.

Although we could have properly invested in our transition towards cleaner, cheaper and more efficient energy, successive Governments—some more than others —have instead left the UK in a state of energy insecurity. By scrapping insulation schemes, the Conservatives built around 1.6 million homes to lower efficiency standards, costing families in those homes an extra £5 billion in bills between 2017 and 2025. The Conservatives also blocked onshore wind and cancelled zero-carbon homes, leaving us far more exposed to ever-rising global gas prices.

The Conservatives and Reform still talk about the North Sea as though it were a magic lamp. The fact is that it is a basin in terminal decline. The Conservatives’ latest so-called evidence is the Onward report, which Carbon Brief’s fact check found assumes that gas prices will fall back to pre-war levels and stay there for 20 years. One Imperial College professor said that the modelling

“has more holes than a Swiss cheese”.

Even on its own terms, it would mean an extra 524 billion tonnes of carbon dioxide and slower electrification. The Climate Change Committee estimates that a single fossil fuel gas spike on the scale of 2022 could cost as much as the net additional cost of reaching net zero across every year to 2050.

Jackdaw will not bring energy bills down. It can only add to the margins of our energy security. Jackdaw can play a short-term role only if it displaces the most polluting LNG and if it leads to more technological green investment. What guarantees are there that this will happen? Will the Government publish the evidence and report on it each year?

Rosebank, on the other hand, is different. The vast majority of it is oil and is sold on the international market, so it will not lower our bills, and the evidence shows that it fails the climate test. We await that decision and we will hold the Government to account.

The Government have also said that tax revenues will go into the new energy wealth fund to invest in green technology, which we welcome. However, the OBR forecasts North Sea tax receipts falling from £4.1 billion in 2025-26 to just £100 million by 2030-31—a 98% drop that Jackdaw cannot reverse. How will Parliament know how this money is spent?

The real answer to energy security is having homegrown renewable power the price of which we control and electrifying everything at speed. This Government are slipping ever further behind. Labour cannot argue that we need more gas because we failed to transition at speed while slowing their own electrification ambitions. The vehicle mandate requires 80% of new cars to be electric by 2030. Reports suggest that Ministers are leaning towards cutting that target to 60%. Does the Minister accept that this would be a disaster, sending the wrong signal to manufacturers, charge point investors and drivers? I ask the Minister to rule out any weakening of the 2030 target and to say when the review will report.

The target for heat pumps has been cut from 600,000 a year by 2028 to 450,000 by 2030. We are among the slowest in Europe because electricity costs are so much higher than gas. On insulation, the warm homes local grant has upgraded just 5,470 homes as of July—0.1% of the 5 million target by 2030. The Government must commit to a national electrification strategy and to a 10-year emergency home upgrade programme, starting with free insulation for the lowest-income households.

I welcome the commitment in the Statement to take levies off electricity bills, but Ministers have committed to remove only two-thirds of the renewable obligation and for just three years. We must remove it fully and decouple the price of electricity from that of gas.

I am concerned that new North Sea production, airport expansion and new data centres are adding emissions, while developing the grid, electric vehicles and heat pumps are falling behind. When will the Government receive the Climate Change Committee’s advice and will they commission a fundamental new assessment of our carbon budgets? The just transition is not delivering for North Sea workers and their communities. Labour should establish the just transition commission that we have called for.

Jackdaw must be the very last. This may be a pragmatic decision, but it must not become a precedent. The only lasting route to security and human survival is to enable the end of our addiction to oil and gas.

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Baroness Curran) (Lab)]

I thank noble Lords for those substantial contributions, and I will do my best to address them as much as I can. I am sure we will have countless opportunities to address them again.

The noble Lord, Lord Moynihan, began by mentioning a number of other North Sea oil and gas projects. As noble Lords will know, I cannot comment on other projects as they are undergoing relevant quasi-judicial processes. However, I lodge the general point that he made, and I am sure it is one that we will continue to discuss.

On Sea Lion, as the Government have said in this Chamber before, the Government maintain a consistent position on the right of the Falkland Islands to develop its natural resources. This is integral to its right of self-determination, which is grounded in international law. UK oil and gas licensing policy does not apply in the Falkland Islands.

I turn to some of the noble Lord’s general points, and I want to be absolutely clear. He began on quite a positive note. I did get some congratulations, so I register my appreciation of that, even if it did not last very long. The North Sea remains a vital asset. It supports jobs, communities and our energy security. Even on the path to net zero, the UK will still require oil and gas for decades to come as we make the clean energy transition.

I think the fundamental disagreement between our positions today is that—I return to the challenge that the noble Lord has given me—he failed to mention the challenge of climate change. After the summer that we have had and all the signs that surround us, I think that is a dereliction of duty. We cannot look at just the production of gas and how we consume gas. We have to look at our carbon emissions, and we have to have a plan to deal with that. That is why this plan, this decision, is vital.

Jackdaw will start supplying gas to British homes and businesses in the coming weeks. At its peak, it is expected to increase UK domestic gas production by around 6%. It is a meaningful production, but it is still in line with our climate change commitments. Those climate change commitments are central to the policy of this Government, which is why our approach to the North Sea goes hand in hand with our ambitions for a managed, orderly and prosperous energy transition. As confirmed by the Prime Minister, who I agree with—and noble Lords should wait until the Prime Minister or any Minister makes formal decisions—this Government will hold to the target of reaching net zero by 2050 to meet the climate challenge and transition from fossil fuels to renewables and nuclear.

Let us be clear that the Jackdaw project will not prevent the UK being able to meet its legally binding limits on carbon emissions or achieving net zero by 2050, but, as the noble Earl, Lord Russell, indicated, Britain is a price taker, not a price maker. The price we pay for gas is determined ultimately by international markets, so while domestic production supports our energy security, producing more gas cannot, by itself, protect British consumers from volatile international prices. That is the charge I return to the noble Lord. He talked about the challenge of relying on renewables, but he does not take responsibility for the impact that volatile gas prices and their knock-on effects have had on British consumers.

We talk about developing the North Sea and continuing to do so. I remind the noble Lord that under the previous Tory Government 70,000 jobs in the North Sea were lost, which indicates that there are challenges there. Just increasing production there cannot be seen as a solution.

I turn to some of the points raised by the noble Earl, Lord Russell. I appreciated his introduction to his questions, which was quite interesting. We have heard very little from the Conservatives about the Onward report, and very little about their cheap energy plan. These have been questioned quite significantly in relation to the thinking and the figures behind them, but I am happy to return to that discussion if the noble Earl wishes to do so. He indicated some very useful stats in relation to that.

The noble Earl mentioned the energy wealth fund, which was announced alongside the Jackdaw decision. Its purpose is to use Britain’s energy wealth today to invest in the clean energy industries of the future. It will invest in renewable and low-carbon energy infrastructure across the UK, helping to unlock growth and supporting the low-carbon economy.

The noble Earl, Lord Russell, also talked about the zero-emissions vehicles mandate. On 14 August, the Government launched the mandate review consultation, which sought views from the public and stakeholders to consider the ZEV mandate and ensure that it is fit for purpose. The consultation forms an important part of the long-committed mandate review and has just closed. As your Lordships know, the Government have a long-standing commitment to publish that review to ensure that we are taking a pragmatic and balanced approach to the transition for transport. The Government launched the consultation so that views from stakeholders and the public could properly inform the review. No policy decisions have yet been made, but I assure noble Lords that the Government remain committed to the zero-emissions vehicle mandate.

The noble Earl also mentioned the warm homes plan. The warm homes plan represents the biggest ever programme of home upgrades in history and is already helping households to cut their energy bills, through solar panels, batteries, heat pumps and insulation. On heat pumps, to which he referred specifically, under the boiler upgrade scheme, the Government have supported over 90,000 heat pump installations and issued over £600 million in grant funding to homes in England and Wales.

I take the general point the noble Earl made about the renewables obligation, the work that we have done on that and the de-linking that we need to undertake in this country. Britain has already moved from gas setting the price of electricity for about 90% of the time in the early 2020s to around 60% today. So we are on that journey, and it is a journey that we want to continue to be on. Through the Government’s clean energy mission, it is estimated that gas will set the wholesale price for around half the time in 2030.

I return to the general point about the decision itself. The Jackdaw decision is fundamental to the decisions that we are making as a Government. It does not affect prices, but it will help with production and give a small but meaningful contribution to energy security. I re-emphasise that Britain has a secure gas system that has consistently met demand, including during periods of global market disruption, and will continue to do so this winter. We have also emphasised the economic benefits to Britain. The developer estimates that Jackdaw will support nearly 300 jobs and contribute around £2.9 billion to the UK economy. I am very pleased that most noble Lords have welcomed the decision today, for which I thank them.