What does UK Jackdaw approval mean for you, jobs and bills?

Key Points

The UK Government has approved plans for drilling at the Jackdaw gas field in the North Sea
Jackdaw field will start supplying gas to homes and businesses from the end of the month, the Government said
The field lies around 150 miles east of Aberdeen and is one of the biggest undeveloped gas fields in the North Sea
Environmental campaigners argue further drilling is incompatible with climate goals

Can you hear that? It’s the sound of a big sigh of relief from the oil and gas sector.

The industry has been nervously awaiting the decision on Jackdaw for some time, hopeful it would get the green light.

The future of Jackdaw, the largest undeveloped gas field in the North Sea has been hanging in the balance for some time.

Jackdaw gas field platform in the North Sea Adura

A legal challenge from environmental campaigners meant the process of it getting the go-ahead to start production has been delayed.

That, along with a UK Government which has made it clear it won’t grant new oil and gas drilling licences in the North Sea, made any decision more uncertain.

However, the mood music since Andy Burnham took over this summer has been changing in the North East of Scotland.

Prime Minister Andy Burnham visited New College Lanarkshire in Motherwell last week No 10 Downing Street

Speaking to those in and around the sector, they’ve felt their arguments around energy security, jobs and the economic benefits were starting to get through.

Not least, the arguments of jobs being lost and the deindustrialisation of an area, now they were speaking to a Prime Minister from the “North”.

As Burnham himself said, a more “pragmatic” approach.

Jackdaw is a far easier sell for the Prime Minister than the other controversial field in the region, Rosebank.

Jackdaw is gas, and we still use lots of gas, and we’ll need plenty of it this winter.

Bills and energy security

The hook for the UK Government is to argue that this will help with energy security at a time of increasing global uncertainty.

Far better, the argument goes, to get the gas we need from our waters than importing from others as tensions across the world escalate.

However, for you and me, it won’t necessarily make much difference to our energy bills, especially not this winter with a projected rise of between 16 – 25% increase to the energy price cap come January.

The gas might come from the North Sea and go into the UK network, but it’s still traded at European and international market prices.

That’s been one of the central arguments for opponents of Jackdaw – it won’t bring down bills, and it will add to the impacts of climate change.

Jackdaw though is not insignificant, the company behind the development, Adura say at its peak it could deliver around 6% of the UK’s North Sea gas production, the equivalent of heating around 1.4m homes.

Environmental groups have suggested the number might be nearer to 2% of UK use when you bring in imports.

Even with Jackdaw we’ll still depend on imports from places like Norway and Liquified Natural Gas from the USA.

Will it protect jobs?

Industry estimates Jackdaw and the Rosebank oil field together could support around 3,500 jobs at peak construction.

That figure is for the two developments combined, so it shouldn’t be presented as 3,500 Jackdaw jobs.

But Jackdaw does give contractors and the wider Aberdeen/North Sea supply chain additional work and investment.

Today’s approval was described by the Government as relying on the North Sea’s “highly skilled and vital” workers.

But the long-term direct employment effect is more limited. Anti-fossil fuel group Uplift argues Jackdaw will be largely unmanned and remotely operated and therefore will not reverse the broader decline in North Sea employment.

Uplift says that a properly funded transition to renewables is what’s needed to protect jobs.

Is this the end of the oil and gas debate?

No, not for either side.

There are still far wider and deeper arguments around where we get our energy from, how much oil and gas we’ll need in the decades to come and how much of that will and should come from home or abroad.

Then of course, there is Rosebank, for some a far harder sell.

The oil field off Shetland has undergone the same new process as Jackdaw, but it is mainly oil.

There is less certainty in the sector about the UK Government’s appetite for that.

The decision to give Jackdaw the go-ahead will only increase the noise from both sides when it comes to Rosebank.

Is the oil and gas debate settled? Far from it.