Cassandra Etter-Wenzel , DPhil candidate in the School of Geography and the Environment and researcher with the Environmental Change Institute and the Smith School of Enterprise and the Environment , and Dr Anupama Sen , Head of Policy Engagement at the Smith School, argue that the debate over the Jackdaw gas field focused on the wrong questions, and that its gas would have been worth more to the UK held in reserve for future generations.
Today, the Government approved Jackdaw, a gas field 150 miles east of Aberdeen. The case for had been made loudly: 1.4million homes heated and 6% of British gas , a platform already standing in the water and almost ready, tax revenue and jobs for the Treasury and the unions (Offshore Energies UK, Unite, GMB). And from both Nigel Farage and the PM -the suggestion that it will bring down bills.
The case for no had been made just as loudly: Lord Stern says it is bad for growth, Oxfam and Greenpeace say it breaks the carbon budget, Fatih Birol at the International Energy Agency say it will not move the price of gas, and Nicola Sturgeon says the jobs are illusory. Both sides were arguing about the wrong thing.
Jackdaw's gas will be sold at the international price, so it will not reduce household bills. Its 6% of supply lasts about eleven years and then stops. Its emissions are real and so are its jobs, but both are relatively small in the bigger picture. What Jackdaw is, when the rhetoric is stripped away, is one of the UK's last remaining options for a strategic reserve: between 120 and 250 million barrels of oil equivalent , the last deposit of that size in a basin that is otherwise spent. The real question was not whether to use it, but who should get the option to use it when it might be most critical.
"On the other side is the generation that will inherit a country which has focused more on producing gas than expanding the grid and renewables plus batteries, in an increasingly geopolitically difficult environment with no reserve of its own with which to bargain."
Consider first the claim about bills, because it is the nearest thing to an argument the Prime Minister has offered. Asked in July about his call with President Trump, he said "There is a resource there. When people are struggling, we can't ignore that." People are struggling with energy bills, and they are only expected to climb over the winter period leaving more families in arrears, cold homes, or arbitraging heating, eating, and other essential services to a healthy life.
But research from Oxford's Smith School of Enterprise and Environment showed that even if every last drop of oil and gas was extracted from the North Sea, it would only marginally reduce bills. The lever that moves bills is the structure of electricity pricing, which the Prime Minister already controls and on which Jackdaw has no bearing whatsoever.
"The lever that moves bills is the structure of electricity pricing, which the Prime Minister already controls and on which Jackdaw has no bearing whatsoever."
Security was the more serious claim. It is not one Mr. Burnham has made himself, but it has been made for him daily, by industry, the Aberdeen chamber of commerce and the leader of the opposition, who told the commons that approval would have meant British gas warming British homes this winter . It deserves a serious answer, because the underlying numbers are alarming: in the first quarter of this year Britain produced 82 terawatt-hours (TWh) of gas and imported, net, 149 TWh. 69% of last year's gas imports arrived via Norwegian pipe . The remaining 39% came via Liquified Natural Gas (LNG) is even more precarious due to America's war with Iran. All of this means that domestic production is incredibly valuable from a security perspective.
Jackdaw developers, Adura, estimate it would meet, at most, 6% of national demand this winter, and only produce for eleven years, after which it would be fully depleted and supply Britain nothing. It is not much, and it is one of the last contributions of its kind that the basin can offer: Rosebank, the other field awaiting consent, is oil.
The question then was not whether Jackdaw adds to security but when its addition is worth most, and here the case for today's decision weakens. Jackdaw's 18 to 38 billion cubic meters amount to between 90 and 190 days of national consumption at the roughly 72 billion cubic meters Britain uses a year, as much as ten times the amount the country has in storage .
Extracted now, Jackdaw's gas will supply a modest fraction of demand through a decade in which Norwegian output remains ample and the alternatives are being built. But if held in reserve, it would have remained the only domestic buffer the country may possess, and could have been far more valuable as Norway's own fields declined.
The cost of waiting has been estimated by the operator, in the operator's interest. The value of waiting and providing security for future generations has not. This is important. A private owner like Shell or Adura working at a 15% hurdle rate values the future less than a social planner like HM Treasury's Green Book 3% social discount rate. The government has not asked whether this project should go ahead based on its own estimate of how we should value the future.
So why make this decision today? Presumably because Treasury would like the revenue this parliament, a Prime Minister would like the headline for this winter, and the gas from Jackdaw is lower emissions than LNG from the US, making the climate picture look better for meeting the UK's Climate Change Act legally binding commitments. This leads both the government and the operator to be aligned on producing now, as both Mr. Burnham and the field itself will be gone, retired or re-elected on other grounds long before the field runs dry.
On the other side is the generation that will inherit a country which has focused more on producing gas than expanding the grid and renewables plus batteries, in an increasingly geopolitically difficult environment with no reserve of its own with which to bargain. That generation could not respond to the consultation that the Offshore Petroleum Regulator for Environment and Decommissioning closed on 10 August .
Mr. Burnham promises pragmatism. There is nothing pragmatic about spending the one asset that grows more valuable the longer it is held, before we really need it. Jackdaw should have stayed in the ground, saved in reserve for a time of genuine need.
