Legal

Campaigners take government to court over oil and gas subsidies

Three campaigners begin a legal challenge this morning to government support for the oil and gas industry.

Mikaela Loach, Jeremy Cox and Mairin van Sweeden, 8 December 2021. Photo: Paid to Pollute

Medical student Mikaela Loach, Jeremy Cox, a former oil refinery worker, and Kairin van Sweeden, the daughter of a Scottish oil worker, will argue at the High Court in London that continued production from the North Sea is in conflict with the UK’s goal to reach net zero emissions by 2050.

Their case centres on the new Oil & Gas Authority strategy which was implemented in February 2021.

The claimants say this is unlawful because it redefines the meaning of maximising economic recovery to exclude consideration of tax breaks given to the industry.

They will argue that this definition fails to take account of public money supporting the industry in tax breaks and decommissioning refunds. Their case is that while some fossil fuel production may be economic to operators it is not economic for the UK as a whole.

The legal challenge, supported by the campaign group, Paid to Pollute, will argue that the strategy is incompatible with the legal obligation to reach net zero emissions by 2050. More oil and gas will be extracted than would be the case if uneconomic fossil fuels were left in the ground, causing more greenhouse gas emissions, the claimants will say.

The case coincides with another legal challenge at the High Court. Friends of the Earth is challenging government funding for a liquified natural gas project in Mozambique.

13 replies »

  1. Might be interesting when tax income is considered.

    When has it ever been different that Governments encourage local industry with tax incentives, if the income in tax revenue justifies it? Well, apart from some renewable energy schemes.

  2. No more public money for oil and gas???
    It is interesting all those who are opposed to oil and gas drilling, are people who are not going to suffer the consequences with fuel poverty!! The activist lawyers opposing Cambo etc are lining their own pockets, “don’t be fooled they are doing this for the environment”!

    But lets throw plenty of money at EIS tax incentive’s schemes for renewable’s in the UK, which do not employ the necessary population, support jobs creation or the manufacturing and engineering graduates of the future, which will not touch the surface of the amount of energy required UK wide… I am just waiting for the day the UK lights go out and people are seriously ill in bed due to fuel poverty!! Then we are reliant on the most expensive energy going which will be Norwegian, Russian and Middle East Oil and Gas, this in turn will be more costly, less emissions based due to the transportation cost, and less efficient and then we are found to have been misled, We are being bent over a barrel for, as we are and have been betrayed by the green agenda in their own power as we have, given up on our own resources!!

    • MK: The UK North Sea oil and gas industry has contributed well over £500 Billion to the UK Treasury over the 50 years since it first began, we have use, benefited and developed our country on the back of this wealth. Benefited schools, healthcare, roads etc from this much needed money. The rebates are what the oil companies are due in tax rebates, probably because during development and exploration costs early in an oil and gas fields cost these where outlays by the earliest risk takers in the North Sea. In perpetuity these field weren’t going to last for ever, but had an economic date, way beyond the date they they will stop producing. The Forties field for example, has been producing for over 45 years, way longer than its proposed cessation of production. Do you every get a rebate from the tax man for over paid tax, which you are due??? and can i add the 45 years of production had employed over 100,000’s of job security in oil and gas workers, vessel operators, helicopter transportation companies, catering, innovation technology which even surpasses NASA space programs innovation in most instances.

      So i ask you this, you the new statesman posts an article on Oil and Gas tax rebates: Next will there be a tax rebate article on the many Starbucks, Costa’s, Cafe Nero’s, Microsoft’s, Google’s, Amazons and Facebook (Meta), who alleged legal loopholes in order to reduce their fair share of tax or do you think Oil and Gas companies are easier prey???

  3. Hmm, Malcolm.

    Maybe someone will not notice that the taxes applied to the oil such as fuel duty are not payed by the North Sea oil companies, but the majority will already know that as most pay it every week.

    A good one to try but I suspect during any Court hearing it would be difficult to get away with that. Companies outside of the ff industry who employ lots of people know that the income and the subsequent tax take from those employees are a major consideration for Governments to try and secure their investment. The whole equation is what is important, not just a selected slice.

    • Interesting point Martin: The other point is that the UK government always knew that they would be on the hook for the decommissioning liabilities for these many oil and gas fields which have been contributing over £500 Billion to the UK coffers, so we have if we are legally obliged to return the UK Continental Shelf back to the way it was prior to the Oil and Gas industry era. Or we may ask the government what did you do with all that money???

      I would like a rebate, as i believe i am due one… But i know that i haven’t put in anything like the investment in to the north sea any of the above oil and gas companies have.

      The same is being done at the moment with the Renewable Industry, why do you think BP are snapping up all the wind licenses?, As the tax breaks are there to be utilized.

    • Dare I ask you laith1720: every time you need to heat your home, cook your food, enjoy a meal in a restaurant, wear out door clothing, go under the knive in surgery, fly, sail, drive and travel, you do understand the price of groceries / parcels from Amazon (china by ship), shopping etc relates to the price the supply chain can reasonably change, when the price goes up that’s because the commodities that be cannot cope with the manufacture and shipping costs!
      Thank your lucky stars you haven’t had to work in the under developed world, a world who are striving for a fraction of the life you take for granted, and maybe, just maybe oil and gas exports is all they have to trade with the rest of the world in which to work in and fed, cloth, house their families!!

      • You may indeed ask me, Eli-Goth, and, if I understand your question correctly, I have to admit that I do not think of these things as I undertake every action of my life although I am very aware of the plight of those people most affected by injustice and inequality, as my MP will testify.
        I do so thank my lucky stars and regret that the world you and I both take for granted has subjected the under-developed world to the poverty in which these countries find themselves, has plundered their wealth and their resources making it difficult for them to trade as equals, has consciously landed them with debts they will never be able to repay, has refused to cancel these debts, has rendered them totally dependent upon us – (their benefactors according to some of those who share your opinions), has subjected them to slavery and continues so to do in a modern form, has taken possession of the territories they occupy, has destroyed in part or in whole their languages and cultures, has inflicted violence upon them, has fed them with the armaments and resources they will need if they are to fight the battles which we have chosen for them, has hypocritically passed off all this exploitation as our “civilizing” mission intended as gratuitous and disinterested aid, has sought and continues to seek to reduce the debt we owe them, by means foul, never fair. I could go on but suspect you might tire.
        I do not think however Eli-Goth that I can redeem myself by assenting to the activities of those agencies which, as the heirs of the perpetrators of these enormities, seek to continue to subjugate the suffering under-developed world and indeed the earth to their nefarious plans to enrich themselves and complete their quest for control.
        ‘Thanking my lucky stars’ does not really fit the bill. More of a ‘mea culpa!’ which much of my time is spent trying (inadequately – the debt is too great) to atone for.
        It’s good that you are aware of the problems we have caused, Eli-Goth. I think it’s just that we differ on how best to solve them.

        • And yet, when a country asks for a loan to self help and improve the well being of it’s population that has previously been subjected to such inequities, that is something else to protest about.

          I just find it preferable for those who want to improve their population well being to be the ones who are empowered to make their own decisions, not a few who think they know better because they have plonked a nest box in some tree thousands of miles away.

    • They produce and sell plastic to enable activists to operate, 1720. Surprised you still need to wonder about that.

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