Shell and Equinor battle to keep North Sea oil and gas projects alive as Greenpeace tightens legal grip

In a pivotal legal showdown, Shell and Equinor have urged a Scottish court to uphold the UK government’s approval of two contentious North Sea oil and gas projects—Jackdaw and Rosebank. Environmental groups, spearheaded by Greenpeace, are fiercely challenging these developments, arguing that they pose a significant threat to climate commitments. The Court of Session in Edinburgh began hearing arguments on Tuesday, with Shell defending against Greenpeace’s legal challenge over the 2022 approval of the Jackdaw gas field. Equinor, along with its partner Ithaca Energy, is also countering an associated legal battle targeting the 2023 green light for the Rosebank oilfield.

Courtroom Clash Over Climate vs. Energy Security

This high-stakes courtroom clash pits environmental advocates against major energy players in a fight that could reshape the UK’s energy landscape. Shell’s defence comes just after a victory in a Dutch court where it successfully overturned a ruling that demanded more aggressive carbon reduction. This victory has bolstered Shell’s confidence, as they argue that the development of these projects is crucial for the UK’s energy security, especially given current geopolitical tensions and the lingering impacts of the global energy crisis. The oil giant insists that the Jackdaw and Rosebank projects are essential for maintaining a stable domestic supply of energy, particularly as Europe looks to diversify away from Russian energy sources.

Meanwhile, TotalEnergies is also engaged in a separate legal dispute in London, battling a High Court challenge against the issuance of new oil and gas exploration licences. This parallel legal battle underscores the heightened scrutiny of fossil fuel projects across the UK and Europe as governments and companies grapple with meeting energy demands while transitioning towards greener energy sources.

Greenpeace Claims Legal Flaws in Approvals

Greenpeace has built its case on a landmark Supreme Court ruling from earlier this summer, which asserts that planning authorities must consider not only extraction emissions but also the climate impact of burning fossil fuels—the so-called downstream emissions—when greenlighting projects. The UK government announced in August that it would not contest Greenpeace’s legal action. Greenpeace’s lawyers argue that both the Jackdaw and Rosebank approvals are deeply flawed, as they fail to account for these broader climate consequences. The environmental group has highlighted that, without proper consideration of downstream emissions, the approvals for these projects directly undermine the UK’s climate commitments under the Paris Agreement.

Greenpeace spokespersons have stated that the government’s approach to approving these projects is short-sighted, emphasizing that the world cannot afford to expand fossil fuel infrastructure at a time when climate impacts are becoming increasingly severe. Recent studies cited by Greenpeace show that global temperatures have been rising at an alarming rate, with extreme weather events such as heatwaves, floods, and storms becoming more frequent and intense. Greenpeace argues that approving projects like Jackdaw and Rosebank sends a contradictory message about the UK’s leadership in the fight against climate change.

Equinor’s and Shell’s Defences in Focus

Despite these mounting legal challenges, Shell, Equinor, and Ithaca Energy remain committed to defending their North Sea ventures. In December 2023, Equinor and Ithaca’s Rosebank project faced renewed legal assaults from environmental groups Uplift and Greenpeace UK, aiming to nullify the development’s approval. Equinor and Ithaca Energy had already committed a $3.8 billion investment in the initial phase of Rosebank as of September 2023, shortly after receiving approval from the North Sea Transition Authority (NSTA). Rosebank, which is estimated to hold approximately 300 million barrels of recoverable oil, has become a crucial focal point in this legal drama, with Phase 1 targeting about 245 million barrels.

Equinor has argued that the Rosebank project will not only create thousands of jobs but will also contribute significantly to the local economy. According to Equinor, the project is a key component of the UK’s efforts to secure energy independence during a period marked by supply uncertainties and soaring energy costs. The company has stressed that all operations will adhere to stringent environmental regulations, minimizing their carbon footprint through advanced extraction technologies and emissions control measures.

Shell’s finalised investment in the Jackdaw gas field in July 2022 also reflects a broader strategy aimed at reducing dependence on imported energy while maintaining a reliable supply. The Jackdaw project is set to link with the existing Shearwater gas hub, located east of Aberdeen. Production is expected to kick off by the mid-2020s, with Jackdaw contributing over 6% of the UK’s North Sea gas output at its peak. This translates to energy for 1.4 million homes, while operational emissions are projected to be less than 1% of the total North Sea emissions.

The Jackdaw field, located roughly 250 kilometres east of Aberdeen and near the UK-Norway maritime boundary, is anticipated to reach peak production of around 40,000 barrels of oil equivalent per day. Shell’s executives have also highlighted the importance of the Jackdaw project in stabilising the UK’s gas market, particularly during winter months when energy demand is at its highest. The company has emphasized that the project’s emissions will be kept to a minimum, and that gas is a crucial transition fuel in moving away from coal and other high-carbon energy sources.

Experts Weigh In on Environmental, Economic Impact

Energy analysts have highlighted the significant balancing act at play: securing the UK’s energy needs while navigating legal and environmental hurdles. Analysts from the Institute of Energy Economics have pointed out that the Jackdaw and Rosebank projects could play a critical role in shoring up domestic energy supplies amidst growing geopolitical tensions and an ongoing energy crisis. However, environmentalists insist that the UK cannot meet its net-zero goals if projects like Jackdaw and Rosebank continue to gain approval without stringent climate considerations.

An energy policy expert, noted that while the UK faces significant energy challenges, approving new fossil fuel projects carries long-term environmental costs that cannot be ignored. “The economic benefits of these projects must be weighed against the urgent need to transition to renewable energy sources,” she said, stressing the need for a clearer pathway toward sustainable energy solutions. “The UK’s commitment to net-zero by 2050 is incompatible with continued investment in large-scale oil and gas infrastructure unless coupled with serious carbon capture initiatives.”

On the economic front, proponents of the projects argue that their approval is necessary to avoid potential energy shortages and price spikes, especially during periods of geopolitical instability. The North Sea has long been a cornerstone of the UK’s energy strategy, and companies like Shell and Equinor are positioning themselves as key players in both securing energy independence and transitioning to cleaner energy over time. However, critics argue that the time and resources allocated to these fossil fuel projects could instead be redirected towards accelerating the deployment of renewable technologies such as offshore wind and solar power.

A Decision That Could Set Precedent

The outcome of this legal battle could set a major precedent for the future of oil and gas projects in the UK’s North Sea, determining whether the push for fossil fuel development can continue amid growing climate concerns. As the Court of Session in Edinburgh deliberates, the stakes are high not just for Shell, Equinor, and Ithaca Energy, but for the broader energy and environmental policy landscape in the UK. A ruling against these projects could significantly alter the trajectory of the UK’s energy strategy, compelling companies and the government to more aggressively pivot towards renewable energy solutions.

Conversely, a ruling in favour of Shell and Equinor could reinforce the role of domestic oil and gas as part of a “transitional” energy strategy, which industry advocates claim is essential for energy security in the near term. Energy industry watchers are keenly observing the proceedings, as the court’s decision will likely influence not only future North Sea projects but also regulatory standards for assessing environmental impacts in the UK and potentially other jurisdictions.

Environmentalists have vowed to continue their fight regardless of the outcome, indicating that even if Shell and Equinor win in Edinburgh, future approvals for oil and gas projects will face ongoing resistance. The case has shone a spotlight on the UK’s broader energy transition strategy, sparking a nationwide debate on the role of fossil fuels versus renewable energy in ensuring a stable and sustainable energy future.