Legal

Judge rejects case against oil and gas regulator

Three campaigners have lost their legal challenge to the UK’s oil and gas strategy.

Photo: DrillOrDrop

Former oil worker Jeremy Cox, 65, medical student Mikaela Loach, 23, and 54-year-old Kairin Van Sweeden, an SNP Common Wheal organiser, sought a judicial review against the Oil & Gas Authority (OGA) and the Department of Business, Energy and Industrial Strategy.

They are considering an appeal after Mrs Justice Cockerill dismissed their case in a written ruling today.

The three had argued at the High Court in December 2021 that the revision of The Maximising Economic Recovery Strategy for the UK was unlawful.

The strategy, required by the Petroleum Act 1998, defines what is meant by the legal duty to maximise economic recovery of oil from beneath UK waters.

The campaigners argued the strategy ignored tax breaks to oil and gas companies. As a result, the OGA could not lawfully conclude whether or not production was economic, they said. This put it in breach of the act, which required extraction of oil and gas to be cost -effective in the UK.

The three also claimed that the strategy was irrational because it would result in greater oil and gas production and higher greenhouse gas emissions. This, they said, conflicted with the UK government’s legal duty to achieve net zero emissions by 2050.

Judge Cockerill ruled that the definition of maximising economic recovery (MER) was up to the OGA, not the court. She also said the definition did not need to consider tax flows.

“I reject the contention that the strategy is unlawful because the definition of ‘economically recoverable’ was irrational. It follows that the claimants’ claim fails and is dismissed.”

Leigh Day, which represented the campaigners, said the ruling in effect allowed the OGA – when deciding on new North Sea developments – to ignore in law how payments from taxpayers encourage increased fossil fuel production.

After the ruling, Jeremy Cox said:

“This judgment exposes the absurdity of North Sea oil and gas, where those in government responsible for tackling climate change are able to ignore how taxpayer money is used to prop up the industry. 

“We still believe that, in doing so, the Oil & Gas Authority has acted unlawfully by ignoring tax subsidies when approving new fossil fuel projects and we are seeking legal advice on an appeal.”

Rowan Smith, solicitor at Leigh Day, said:

“We consider that the court’s conclusion that it is not its role to interpret the meaning of MER as a statutory term, runs contrary to established principle.

“We also consider that, in reaching its findings, the court appears to have misconstrued the claimants’ case. 

“It was not about how taxes are set, rather it was the OGA’s failure to consider the effects of taxation as part of its MER assessment, which rendered the strategy unlawful.  

“We are advising our clients on the potential for making an application to the Court of Appeal.”

The business secretary, Kwasi Kwarteng, tweeted in response to the ruling:

“I welcome today’s High Court judgement.

“Turning off North Sea oil and gas overnight would put energy security, jobs and industries at risk – and make us even more dependent on foreign imports. This has to be a transition, not extinction.”

16 replies »

  1. So, Mike, what you are indicating in your last sentence, is that you are aware of the costs of the antis to the public.

    Hmm. All those £ millions that could have been so much better spent-in one case trying to delay one project that if it had not been delayed would have shut down a lot earlier!

    However, if you wish to attempt to indicate people are happy and content with on shore wind turbines and solar farms despoiling and industrializing the countryside you are deluded. There are many who would like their moorland to be as it should be, with Cathy able to tramp around and be heard calling without the drone of machinery drowning her out, mincing any raptors who might also like their moorland habitat.

    Perhaps those who were gleefully shouting about how fossil fuels were all going to go bust when oil dropped to below $20/barrel should have realised what would happen as the world started up again, and how the price would rocket. Those who increased their household savings during the pandemic (many) will need to pay out some of that for a period. Others, who can’t, will get some help, but a cut in VAT is a nonsense. Why should those who have the largest houses end up with the biggest discount whilst those with small flats subsidise that? Some politicians come up with the most stupid suggestions, knowing the media is stupid enough to print them without scrutiny.

    In your second to last paragraph you simply ignore the overall costs. Renewables plus nuclear adds up to very expensive energy compared to the rest of the world. Bad enough for householders, but even worse when you add in the cost to industry that can not compete globally unless those same householders subsidise their energy costs through paying extra taxation. The “common sense” of certain politicians, who call for a cut of VAT on household energy bills, and then also call for more help for the steel industry to cover high energy costs, which would be out of the pockets of those tax payers!

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