Andy Burnham is expected to approve the controversial Jackdaw gas field off the coast of Aberdeen, according to government sources.
A decision could be made as early as next week before the House of Commons breaks for the party conference season.
Jackdaw, together with the Rosebank oil field, was approved by the former Conservative government in 2022 but was delayed by a legal ruling from a Scottish court.
Environmental groups successfully argued that consent was given without fully considering the climate impact.
However, the court allow development work to proceed and pressure has been mounting on the Labour government to give consent in order to boost badly-needed gas supplies.
The industry says that it makes more economic sense to use domestic supplies than import gas at a higher price and higher carbon footprint. Climate activists say all new oil and gas drilling should be banned and point to rising temperatures, heatwaves and floods as evidence of the effect of burning fossil fuels.
If confirmed, the decision will be a huge relief to the oil and gas sector which also argues that the industry needs the revenue and skills in order to make the required transition to cleaner energy. The government would also benefit from the additional tax unlocked by £50 billion of investment.
Jackdaw’s owner says it will account for about 6% of UK gas supply while environmental groups say it will provide only 2% of UK gas demand.
Both Jackdaw and Rosebank are operated by Adura, a joint venture between energy giants Shell and Norway’s Equinor. Aberdeen-based firm Ithaca Energy, which owns 20% of Rosebank, was promoted to the FTSE 100 this week.
Adura has estimated that Jackdaw could produce 35.8m tonnes of carbon over its 11-year lifetime, the equivalent of 90% of Scotland’s emissions for 2023. But it said a more likely estimate was about 23.6m tonnes – equivalent to 60% of the 2023 figure.
It said that if approval is given this month the field could begin delivering gas to UK homes by this winter as the construction is “99% complete”.
A public consultation on the future of Jackdaw and another new oil field, Rosebank, closed last month and the decision now rests with Energy Secretary Miatta Fahnbulleh. She is coming under pressure from her own constituents in the London borough of Peckham ahead of a by-election in Sir Keir Starmer’s nearby seat.
Speaking in the House of Commons yesterday, Energy Minister Kate White said that the energy secretary would make separate decisions on the two sites, but gave no indication of the timings of an announcement.
“The process ended in August, and the Secretary of State will be taking those decisions in due course,” she told MPs.
Mr Burnham recently said there needs to be a “pragmatic approach” towards domestic oil and gas and has also put a reversal of “deindustrialisation:” at the heart of his personal plans for the country.
“We won’t be able to stop using oil and gas for some time. That’s just a fact,” he stated in a recent speech. “The question is whether we can accelerate use of it so that we pay for the transition.”
Unlike North Sea oil, most of which is exported and then reimported in various refined forms, almost all North Sea gas is used domestically in the UK. The UK is heavily reliant on gas imports with over 60% imported from Norway and the United States.
The Department for Energy Security and Net Zero said it would not comment on speculation.
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