Oil drilling wrecks the planet and makes us all poorer

Protesters from Fossil Free London demand that Andy Burnham says no to North Sea oil (Pic: @fossilfreeLDN)

It is a fallacy that North Sea oil will make our bills cheaper. That’s the conclusion of a new paper submitted to the consultation on whether drilling should go ahead at the Rosebank and Jackdaw oil and gas fields.

Research from Imperial College London’s Centre for Environmental Policy shows that the economic harm caused by Rosebank and Jackdaw would outweigh any economic benefit.

The research shows that future damages caused by the developments could be as high as £483 billion. Even the lowest estimate of £170 billion would be more than six times the projected economic value of the developments.

Fossil fuel company Adura’s own figures says the developments would boost the economy by £28.7 billion.

This comes after this summer’s heatwaves knocked an estimated £4.4 billion out of the British economy.

The report uses data released by oil companies themselves as part of planning applications, as well as past research on the social cost of carbon dioxide to paint a complete picture of the economic effects of the Rosebank and Jackdaw developments.

Its estimates don’t take into account the impact of climate-related deaths from sea level rises and extreme weather, which means the actual cost could be even higher.

The report also notes that by 2030, when Rosebank and Jackdaw are supposed to start operations, the estimates for the social cost of carbon could be out of date. The cumulative effect of carbon dioxide in the atmosphere will likely have raised the cost.

The report says that the worst damages will be felt by the poorest.

And who will reap the economic benefits? The report is clear. “In all cases, the returns from Jackdaw and Rosebank are likely to accrue to those already well-off by many measures,” it says.  

The developers of the Rosebank and Jackdaw sites are privately owned companies, mostly investment funds. Equinor—one of the developers of Rosebank—is mostly owned by the Norwegian state.

As the oil and gas obtained from these sites will be sold on the open market, it will have very little impact on British energy costs. And, as the North Sea is a “mature basin” with declining reserves, new oil and gas developments are only short-term ventures and not long-term investments in jobs and the economy.

Richard Sulley of the University of Sheffield said, “Expanding oil and gas production in the North Sea is not just an environmental crime but also economically illiterate.”

This report demolishes the fossil fuel industry’s lies about oil and gas. Granting new licences for drilling in the North Sea will contribute to the warming climate, worsen the extreme weather the world is already facing and worsen food shortages. And it won’t even have the economic benefits that the industry claims.

Andy Burnham should reject the applications for the Rosebank and Jackdaw developments—and trade unions should break from the oil industry’s propaganda and end their backing for North Sea oil.