Energy Secretary Miatta Fahnbulleh has given the go-ahead for gas to be produced at the Jackdaw field in the North Sea, with supplies to British homes and businesses expected from as early as the end of this month, as Chancellor John Healey announced a new Energy Wealth Fund to reinvest oil and gas revenues in the green transition.
The Energy Secretary agreed that the North Sea Transition Authority can grant consent for production at the already-licensed field. Jackdaw is expected to raise domestic gas production by around 6% at its peak, protect hundreds of jobs and add an estimated £2.9 billion to the economy over a lifespan of up to 11 years.
The decision comes after conflict in the Middle East triggered global energy shocks that have pushed up bills for families across the country.
Miatta Fahnbulleh: 'Compatible with our climate commitments'
"Following careful consideration of all relevant factors I have agreed that the regulator can grant consent for gas to be produced at Jackdaw, which will begin to supply the UK with gas from this winter thanks to the highly skilled and vital North Sea workers," Miatta Fahnbulleh said.
"This decision will support the country's energy security with homegrown gas this winter and help minimise the UK's use of imported higher emission fuels as we continue our transition to renewables and nuclear. The decision is compatible with our legally binding climate commitments, and we remain resolute in ending new licences for oil and gas and achieving net zero by 2050."
The government says the decision is consistent with Labour's manifesto commitment not to issue new licences to explore new fields while managing existing fields for their entire lifespan. Following the Supreme Court's Finch ruling in 2024, the Energy Secretary also had to weigh the impact of burning the extracted gas under a new environmental framework.
Andy Burnham: 'A pragmatic approach to the North Sea'
Prime Minister Andy Burnham welcomed the decision, saying it would protect hundreds of jobs and help keep millions of homes warm this winter. "At a time when people are really struggling, it's right that we look in a responsible way at maximising the existing energy reserves we have in Britain that could help," he said.
"We're committed to moving towards renewable energy and reaching net zero by 2050. But even on our ambitious climate path, we'll still require oil and gas as part of our energy needs for decades to come. That's why we're taking a pragmatic approach to the North Sea."
John Healey: £2bn Energy Wealth Fund
The new Energy Wealth Fund will use tax revenues from North Sea oil and gas to invest in renewable and low carbon energy projects, starting with an initial £2 billion, with future North Sea revenues flowing into the fund over time. The government says the investment will help substantially delink gas and electricity prices by the end of this Parliament.
"I want Britain's energy wealth to spark a new wave of clean power to work for the British people," John Healey said. "Through our new Energy Wealth Fund, we will invest in the clean energy industries of the future, creating jobs, driving growth and strengthening Britain's energy security."
Douglas Alexander: 'A win for Aberdeen'
Scotland Secretary Douglas Alexander, who welcomed the Energy Secretary and the Chancellor to the North East of Scotland this morning, said: "This decision to approve Jackdaw is a win for Aberdeen, a win for Scottish workers and a win for Britain's energy security. The North East has helped power the country for half a century, and will continue to do so for decades to come."
The announcement comes ahead of the Budget, which the government says will set out its plan to deliver good growth in every postcode.
