British government on Wednesday approved the controversial Jackdaw gas field in the North Sea, ending years of legal and political quarreling as the Labour government seeks to balance its climate goals with energy security concerns.
Energy secretary Miatta Fahnbulleh said the project would begin supplying gas to British homes and businesses by the end of this month, helping ease energy costs that have surged during the Iran war.
Higher energy prices have weighed on households and businesses, dragging on Britain's economy and prompting U.S. President Donald Trump to repeatedly urge Prime Minister Andy Burnham to expand North Sea drilling to help lower costs.
The government said Jackdaw would raise domestic gas production by about 6% at peak output and operate for up to 11 years, calling it "a source of national strength" during a period of global instability.
"At a time when people are really struggling, it's right that we look in a responsible way at maximizing the existing energy reserves we have in Britain that could help," Burnham said.
New energy wealth fund
Burnham, who took office in July, has sought to balance pressure to tackle rising bills with demands from some Labour lawmakers to reduce fossil fuel use.
North Sea oil and gas fields have generated tens of billions of pounds for Britain over several decades and were a pillar of Margaret Thatcher's government during their heyday in the 1980s.
Alongside approving Jackdaw, the government announced a new Energy Wealth Fund with an initial 2 billion-pound ($2.7 billion) investment to channel oil and gas revenues into the transition to cleaner energy.
The move aims to demonstrate that Britain remains committed to its climate targets despite backing a new gas project, following the country's hottest summer on record.
The Green Party called the approval "climate vandalism."
Fahnbulleh said bringing Jackdaw into production was compatible with Britain's legally binding target of reaching net zero emissions by 2050 and reiterated her commitment to legislation banning new North Sea licences.
Asked about the Rosebank oilfield, which, along with Jackdaw, has been in limbo for years after a court ruling temporarily blocked both developments, Fahnbulleh said she had yet to make a decision.
"Jackdaw is a gas field that essentially caters for the U.K. market, so it's gas that goes into our homes and businesses here. Rosebank is an oil field that is predominantly about exports," she told Sky News.
North Sea fossil fuel production has dropped sharply since peaking in the late 1990s. Even if both Jackdaw and Rosebank come on stream, their output would be small on a global scale and do little to slow the basin's long-term decline.
Jackdaw is run by Adura, a joint venture between Shell and Norway's Equinor. Shell welcomed the government's decision.
"Long-term energy projects depend on a competitive and stable investment environment, alongside timely and predictable regulatory decisions," Shell said.