Rosebank shows oil giants are the real winners from Sunak’s climate rollbacks

Behind the dust kicked up by the prime minister’s speech lies a much uglier reality - the government has given up on fixing the country’s problems and is pandering to the usual vested interests.


Last week, the prime minister wheeled out the stately lectern and national flags to announce a series of major climate and energy rollbacks, from home insulation to the phase-out of polluting cars. Under the improbable slogan of “Long-term decisions for a brighter future”, Rishi Sunak tried to persuade the public that this was all about being honest about the cost of net-zero and helping ordinary people struggling to make ends meet.

While the rightwing press lapped up his spiel, a raft of opinion polls suggested most people weren’t fooled by it. It may be because this outpouring of concern for the plight of everyday folks came from the UK’s wealthiest ever prime minister, who seems to be allergic to trains and never far from a private jet or helicopter. Or perhaps because it quickly turned out that many of the policies he claimed to have scrapped didn’t really exist in the first place. Or it could be that most people understand that things like home insulation and cleaner transport are useful not just to keep a safe climate but also to clean up air pollution and lower energy bills.

Indeed, a recent major Survation survey for Greenpeace UK shows that a majority of the public, including in the Conservatives’ heartlands, want more government actions to boost renewables, fix energy-wasting homes and improve clean transport. It’s not hard to see why. With the UK having some of the draughtiest housing in Europe, rowing back on insulation means keeping households hooked on volatile fossil fuels and high energy bills. Delaying the phase-out date for petrol and diesel cars means having more toxic pollution on our streets for longer, and missing an opportunity to bring down the price of electric cars as production expands. And making up long-term policies on the hoof also sends out the kind of mixed signals that will put off forward-looking businesses from investing in this country just as other leading economies are competing to attract them.

So who could possibly stand to benefit from Sunak’s attempt to keep the country stuck for longer in the fossil fuel economy? If there were any doubts left after last week’s speech, the decision by Sunak’s government to greenlight the Rosebank oil field should have swept them all away.

Rosebank is the largest undeveloped oil field in the North Sea, majority-owned by Norwegian energy giant Equinor. Over its lifetime, it’s expected to produce some 300 million barrels of oil and gas, which, if all burnt, will release the equivalent annual emissions of around 90 countries. Against the advice of leading scientists and energy experts, and after a summer that saw extreme weather records smashed all over the world, Sunak has given the all clear to pump yet another megadose of carbon dioxide into our atmosphere. Nothing to gain there for the Earth’s climate and all who depend on it (which, by the way, is everybody).

But what about energy bills? Have we stacked the odds against averting a climate disaster to save a few quid on our bills? Not even that. Any fossil fuels extracted by energy companies in the UK belong to those firms, who can do with them as they wish. In Equinor’s case, that means selling it on the global market where it’s unlikely to make a jot of difference to international gas and oil prices or to our energy bills. As one of Equinor’s bosses kindly clarified for us: “If the UK needs Rosebank oil, it will go to the UK through open market mechanisms.” No wonder most people are sceptical about the potential for more oil and gas drilling to cut energy bills. That myth is dead and buried.

If Rosebank is very bad for the climate and not at all good for bill payers, it’s definitely a sweet deal for the Norwegian oil giant. Thanks to a loophole in the windfall tax brought in by none other than Sunak himself when Chancellor, the UK public is expected to foot the bill for 91% of the development costs. That means UK taxpayers could effectively hand over £3.75 billion in subsidies to Equinor, while the oil giant pockets the huge profits from selling the oil and gas. Even including all the economic activity and wages that Rosebank generates in the UK, the taxpayer still loses out.

So much for helping ordinary people. Behind the dust cloud kicked up by the prime minister’s speech lies a much uglier reality – that of a government that’s given up on fixing the country’s problems and is pandering to the usual vested interests while dragging climate into the culture wars in the hope of chasing a few votes.

But if Sunak felt like having another go at coming clean with the public, here’s a suggestion. Standing over a more truthful slogan – “Short-term decisions to try and save our political future” would be about right – he could explain to people how David Cameron’s move to “cut the green crap” has added an extra £150 to their energy bills. Or how the Conservative de facto ban on onshore wind robbed the country of the benefits of our cheapest power source. Or how his government managed to botch an auction for new offshore wind so badly that not a single company turned up. Or how his weak windfall tax will keep putting billions in the pockets of oil giants already making a killing from the energy crisis.

Who knows, this is the kind of honesty the UK public may be willing to believe.

What's next?