Cabinet split emerges over controversial Rosebank oilfield decision

Rosebank is an oilfield in the North Sea. The government is considering whether to approve a licence allowing drilling and production to proceed. The proposal matters because it combines economic, energy and climate questions. It could support the North Sea industry, but campaigners argue its emissions conflict with climate goals.

The licence is currently on hold because of concerns about the project’s environmental impact. Unlike Jackdaw, Rosebank is mainly an oil project, and most of its oil would be exported. The energy secretary must assess environmental evidence, public representations, climate obligations and carbon budgets before deciding.

No final decision has been made. Miatta Fahnbulleh is understood to be leaning towards rejection, while Chancellor John Healey supports approval. If ministers disagree, the prime minister would be expected to make the final call. A decision is expected before the end of the year.

Miatta Fahnbulleh, the energy secretary, has formal responsibility for deciding whether Rosebank should proceed. She must consider the project’s environmental assessments, public representations, climate obligations and carbon budgets. The decision is therefore assigned to her department rather than being automatically decided by the whole cabinet.

The disagreement matters because Chancellor John Healey is understood to support approving the licence. Fahnbulleh is reportedly leaning towards rejection after allowing the smaller Jackdaw gasfield to proceed. Andy Burnham and Healey are also reported to have agreed to push Rosebank through, although No 10 said the matter was for the energy secretary.

The prime minister would be expected to make the final call if there were a conflict over the decision. Officials say Fahnbulleh has not yet decided. Her choice will therefore determine whether the licence is approved, unless the disagreement becomes a matter for the prime minister.

Fahnbulleh distinguishes the projects because they serve different purposes. Jackdaw is a gasfield intended to cater for the UK’s domestic market. Rosebank is an oilfield, and most of its output would be exported. She therefore argues that the reasoning supporting Jackdaw cannot simply be transferred to Rosebank.

Her key mechanism is the energy transition. Fahnbulleh says the UK will rely on gas while moving towards net zero, so obtaining gas from relatively low-carbon North Sea sources could be preferable to importing it. That argument is specific to domestic gas supply. It does not provide the same energy-security benefit when Rosebank’s oil is mainly sold abroad.

She says each application must be judged independently. Rosebank must fit the UK’s climate obligations, carbon budgets and planned energy transition. Officials also believe Rosebank would produce far more emissions and do less for UK energy security than Jackdaw.

The most striking comparison is Rosebank’s projected emissions. Officials say they would be about seven times greater than emissions from Jackdaw. This makes Rosebank a much larger climate concern, even though both projects involve North Sea fossil-fuel production.

The difference affects the approval test. Fahnbulleh must consider environmental assessments, climate obligations and carbon budgets. Rosebank’s greater emissions make it harder to show that the project is consistent with the UK’s route to net zero. Its mainly exported oil also offers less direct support for UK energy security.

The comparison is shaping the cabinet disagreement. Fahnbulleh is understood to believe Rosebank would do less for energy security and create substantially more emissions. Healey nevertheless supports approving the licence. The final decision will determine whether the government accepts those larger emissions while pursuing its wider energy transition.

Approval and rejection would carry sharply different political consequences. Rejection would be a blow for the North Sea energy industry, which views the field as an important project. It would also be a major victory for climate campaigners opposing its environmental impact and emissions.

Approval would expose Labour to internal opposition. MPs have warned of a big pushback, although many accept that Jackdaw may be necessary during the transition to net zero. Parliamentarians have discussed forcing or encouraging a vote on Rosebank if ministers approve it. Such a vote would let MPs publicly express dissent.

The dispute also reaches the cabinet. Healey supports approval, while Fahnbulleh is considering rejection. Andy Burnham and Healey are reported to support pushing the project through. If Fahnbulleh and other ministers conflict, the prime minister could make the final call. A decision is expected before year-end.

An energy wealth fund would use future tax revenues from the North Sea oil and gas industry to finance the shift to cleaner energy. The idea is to invest income from fossil fuels in projects that reduce reliance on them. Fahnbulleh says this would connect North Sea revenues with the transition the UK needs to make.

The fund could support renewable power, nuclear energy and other clean-energy schemes. Fahnbulleh said the budget would provide £2bn for it. The mechanism is straightforward: collect tax revenues from oil and gas, place some of them in the fund, then direct that money towards projects supporting clean power and the wider energy transition.

Important details remain unresolved. Fahnbulleh could not specify which tax revenues would qualify or how much they might generate. She said the chancellor would clarify those arrangements in the budget. The fund therefore has a stated purpose and initial funding, but not yet a complete revenue plan.

Net zero is a goal in which human-caused greenhouse-gas emissions are balanced by removals, so the overall addition to the atmosphere reaches zero. Carbon budgets are limits on the emissions allowed during set periods. They turn a long-term climate goal into nearer-term constraints for government policy and investment.

For a new oil or gasfield, the government must ask whether its production and use can fit those limits. A field that adds substantial emissions can consume room within future budgets. Officials must also consider whether the project supports the transition towards cleaner energy, rather than making that transition harder. The article links these tests directly to Rosebank’s approval.

Fahnbulleh says any decision must be consistent with climate obligations, carbon budgets and the destination of the energy transition. Rosebank’s emissions, estimated at seven times Jackdaw’s, make that assessment difficult. Net zero and budgets do not automatically decide the application, but they limit what can be approved consistently with climate policy.