The UK Government has accepted it has powers to stop the disputed Cambo oil development “in the public interest” after a legal challenge by campaigners.
The government’s legal department said that the business secretary, Kwasi Kwarteng, could “give directions” to the Oil and Gas Authority (OGA), which is currently considering whether or not to give Cambo the go-ahead.
Previous government statements distanced Kwarteng from the decision, suggesting he was “not involved” and could not intervene. When asked about Cambo, the Prime Minister, Boris Johnston, said “we can’t just tear up contracts”.
They are now claiming victory, saying that ministers have abandoned any suggestion that they are powerless to intervene. The government, however, insists that consent for Cambo “is a matter” for the OGA in Aberdeen.
Scottish politicians have accused Johnson and his ministers of being “dishonest” about Cambo. The Scottish Government expressed disappointment that Westminster failed to take up its suggestions for changes in the oil and gas licensing process.
The Ferret reported in September that the UK Government was “confident” that Cambo could go ahead without breaching climate targets. This was a “pretty stunning admission”, campaigners said.
The Cambo oil field, in the sea north west of Shetland, was originally licensed for exploration in 2001. Two oil companies, Siccar Point and Shell, are now bidding to start extracting up to 800 million barrels of oil.
But the development has run into fierce opposition from environmentalists and political parties in the run-up to the COP26 climate summit in Glasgow in November. They have highlighted the International Energy Agency’s call in May for “no new investments in oil, gas and coal, from now” to meet global climate targets.
In August the First Minister, Nicola Sturgeon, wrote to Boris Johnson asking for the UK Government to “reassess” licences for oil and gas projects such as Cambo. She was, however, criticised by campaigners for failing to call for the development to be stopped.
At the time the UK Government maintained that Kwarteng was “not involved in the decision whether to grant consent for the Cambo oil field”. It was the OGA that was “ultimately responsible”, according to a spokesperson quoted by The National.
In August Sky News reported a government source saying “we cannot intervene”. When quizzed about Cambo on a visit to Scotland, Boris Johnson said: “We can’t just tear up contracts. There’s a process to be gone through.”
On 26 August Friends of the Earth Scotland and Uplift wrote to Kwarteng warning they were considering applying for judicial review. They argued that the government “appears to misunderstand the legal position”.
The letter pointed to legislation which did give Kwarteng powers to step in. Government statements were “based on errors of law”, it said, and Kwarteng was “unlawfully failing to consider the exercise of the powers in question”.
The response from the Government’s legal department in Westminster on 16 September rejected the case for a judicial review. But it agreed that Kwarteng had “powers of direction” over the Oil and Gas Authority under the 2016 Energy Act.
“The secretary of state may give directions to the OGA as to the exercise of its functions if the secretary of state considers that the directions (a) are necessary in the interests of national security or (b) are otherwise in the public interest,” said the government in a letter being published by The Ferret.
“Unless directions are given in the interests of national security, the secretary of state may give a direction on public interest grounds that relates to a particular case only if the secretary of state considers that the circumstances are exceptional.”
It added: “As at the date of this letter no specific or general direction has been given in respect of development of the Cambo field.”
The letter also suggested the statement from an unidentified government source saying “we cannot intervene” was not “official”, adding “as such we are not in a position to comment on it”.
Friends of the Earth Scotland director, Dr Richard Dixon, argued it was clearly in the public interest to prevent oil being exploited at Cambo. “The UK Government has tried to dismiss Cambo as a done deal, something already settled long ago or a decision over which it has no control,” he said.
“Our legal threat has forced the government to admit that of course they have the power to stop Cambo from going ahead if they choose. The development would mean vast amounts of new climate emissions and oil still flowing in the 2050s.”
According to Uplift’s director, Tessa Khan, the UK Government now face a choice. It could either listen to the world’s climate scientists or “ignore them and press on with approving Cambo,” she said.
“They may not like it but Boris Johnson’s government is responsible for whether or not the new Cambo oil field goes ahead.”
The environmental lawyer who helped the campaign groups, David Wolfe QC from Matrix Chambers in London, suggested that Kwarteng could step in at any time.
“The government has now abandoned the suggestion that it is powerless to intervene,” he told The Ferret.
“It accepts that the secretary of state could give directions to the OGA about the licenses for oil fields, and I see no reason why that could not include a direction relating to Cambo.”
The Scottish Greens agreed that the UK Government had the power to stop expanding oil and gas production. “It’s time Johnson, Kwarteng and their government accepted their responsibility to secure a future for our children and the planet and tear up the contract for Cambo,” said the party’s climate spokesperson, Mark Ruskell MSP.
Scottish Labour’s energy spokesperson, Monica Lennon MSP, accused Johnson and his ministers of being “dishonest” about Cambo. “It’s shameful that campaigners were forced to take legal action to extract this truth from Tory ministers,” she said.
“We need a just transition for workers and communities, not massive new oil fields that will accelerate climate catastrophe. With the eyes of the world watching Scotland, Nicola Sturgeon must throw her weight behind the stop Cambo campaign before it’s too late.”
The Scottish Government pointed out that offshore oil and gas licensing was reserved to Westminster. “We have been clear that it cannot be business as usual, and this applies across all sectors of the economy,” said a spokesperson.
“It is therefore disappointing that our offer to engage further with the UK Government about what changes to the licensing process should involve to ensure that the current process is transparent, credible and commands confidence has so far not been taken up.”
With just one month to go until COP26 comes to Glasgow, the Scottish Government stressed the need for “clear leadership” to ensure a “just transition” for the oil and gas sector, with “good green jobs”.
The Department for Business, Energy and Industrial Strategy (Beis) reiterated that the Cambo oil field was originally licensed in 2001 and 2004. “Consent for development of the field is a matter for our expert regulators, the Oil and Gas Authority, and the Offshore Petroleum Regulator for Environment and Decommissioning, following their standard regulatory processes,” said a spokesperson.
Beis accepted that there was a “power of direction” in the 2016 Energy Act that “can be exercised in certain circumstances”. But it stressed that the OGA had “day-to-day operational independence”.
Beis added: “While we are working hard to drive down demand for fossil fuels, there will continue to be ongoing demand for oil and gas over the coming decades as the UK transitions to low carbon solutions.”
OGA declined to comment.
The Ferret revealed in September that three of OGA’s senior executives had shares worth over £225,000 in the oil industry. We also found that eight of the 13 members on the board of directors and senior management team used to work for the oil and gas industry.
The letter from the UK Government to campaign groups
The story was amended at 12.25am on 3 October 2021 to correct the total amount of oil available in the Cambo field to 800 million barrels.
Cover image thanks to iStock/nielubieklonu.