Three campaigners have lost their legal challenge to the UK’s oil and gas strategy.
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.”
DRILL OR DROP? 
This is a bit like some years ago when Aston Villa were termed Aston Vanilla, as every team that played them, licked them!
Yet, along came another game and articles were produced in advance to suggest it was now all going to be different. Then, usually on the Sunday, articles were produced to say it had not been the case, but “we wus robbed”. (Sorry, Villa supporters, to remind you.)
The reality was the same but some obtained employment from suggesting it wasn’t.
However, a nice phrase to emerge:
TRANSITION NOT EXTINCTION.
That’s worth shouting about.
This is a silly case, and appears to be brought for the purpose publicity. It is obvious the we cannot reduce or stop our dependence upon oil and gas overnight. The effect to stopping UK development simply throws people out of work here, and employs people elsewhere in the world to produce the oil for us. Moreover, a super tanker can burn up to 300 tons of oil per day in its engines just to get the cargo to us and of course it burns a large amount to return empty . The Court case was irresponsible. May will add something for the global warming lobby. Let me point the finger at wind turbines . These are extracting billions of kilowatts from natural flow of global air currents it will not come for nothing, It will come at a cost, it will most certainly have an effect upon the climate, if has to does enyone know if this will be for the better or the worse. Where is the research ?
I’m confused. Who mentioned “Turning off North Sea oil and gas overnight” Doesn’t that imply that North Sea O&G is knowingly already being uneconomically exploited without the tax breaks? If Kwarteng knows that, why haven’t a range of renewables been strongly supported and developed over the last decade (other than offshore wind) to develop UK energy security? That would have also protected us from world O&G price fluctuations. Oh well, too late now.
I wonder, Mike, if Kwarteng is simply drawing attention to the possibility that, had the claimants’ case been upheld, then licences/permissions already granted might have to be revisited and possibly withdrawn. This might have the effect that Kwarteng voices. Seems a bit far- fetched and injudicious a comment for a lawyer, I grant you, but I can see no other explanation. “Transition not extinction” is also a bit puzzling. The longer drawn out the transition, of course, the more sure the extinction.
I wonder why Ruth included this.
I rather suspect Kwarteng is just scaremongering to his usual gallery and won’t be wanting to expand his tweet to anything more rational or evidence based. Clearly, neither will his usual gallery. Perhaps Ruth included the quote as it was the only official one and she realised it was somewhat vaccuous and consequently worth highlighting. There’s always a case in any article to report accurately exactly what’s happened and what’s been said, then give credit to the intelligence of some readers to draw sensible conclusions themselves.
A retired oil worker?, Doh! (Slap in the face)
Is he going to hand back his oil and gas company pension?? Haha, I thought not!!
Some activist he and his wife are!! , living off the Oil & Gas pension proceeds he is now dispelling!! You couldn’t make this up..,
I can see why you are confused Mike.
If you haven’t noticed the range of renewables strongly supported and developed over the last decade, then perhaps you are off grid. For the vast majority on grid they notice the green levies every time they receive their energy bills.
Strange protection. It is possible to sign up with a green energy supplier now. So, that would be so much cheaper? Nope.
Subsidies removed from PV, hydro likewise. Onshore wind all but banned. No apparent support for wave or tidal. Mostly private investment in geothermal. Doesn’t leave a lot other than offshore wind. Anyway, back to the key point of North Sea O&G being uneconomic without tax breaks, aka subsidy. I’m still confused by Kwarteng’s comment. Any rational comments?
Mike, the latest government support scheme for renewables, with solar and onshore wind included for first time since 2015
https://www.gov.uk/government/news/biggest-ever-renewable-energy-support-scheme-opens
Tax regimes on UK oil/gas exploration, production and decommissioning
https://www.ogauthority.co.uk/exploration-production/taxation/
I suggest you do a bit more research, Mike.
Onshore wind? You mean you are okay with industrializing the countryside, when there are much better options available?
Can’t agree with that.
Isn’t onshore wind currently the cheapest for of energy generation? Or perhaps it would be if it hadn’t been kicked into touch. Govt decides energy policy, irrespective of whether you or I agree.
Yes, your last sentence was correct, Mike.
So, why are the Courts being clogged up with such silly challenges?
And, no, onshore wind is not the cheapest form of energy generation, if a user is looking for reliable, constant energy provision. Then, the cost of nuclear needs to be added. Which, is being added, although you seemed to have missed that on 19th at 11.15am. It will be interesting to see the cost of that, probably Sizewell C, in comparison to Hinkley Point.
Then there are the SMRs being developed where funding has been provided. Will they produce a cheaper generation cost? I hope so, but there is no guarantee.
Courts are where illegal acts are tried and decided on. Sometimes that means challenging govt decisions that will potentially have huge implications in terms of both cost to us taxpayers and adverse impacts thereof. Rather crass to describe them as being clogged up with silly challenges. The case wouldn’t have been accepted for JR unless it was found to have some merit.
As you well know, energy provision needs a sensible mix of generation methods based on cost, practicality, reliability and environmental impact, That spread (similar to a range of financial investments) should result in good energy security, security of supply and affordability. Fossil fuels aren’t doing too well in terms of affordability currently, or environmental damage. I thought you were most concerned about fuel poverty, or is that just when it suits your argument?
Try telling that to those who receive an energy bill and notice the very large SURCHARGE to pay for green levies, Mike, who are in fuel poverty currently. Trying to hide those levies in general taxation would just mean the money comes out of a different pocket.
So, the premise of your argument is currently incorrect.
It is claimed that the situation will improve for renewables, with them becoming cheaper. Well, will that be the case when the cost of security is added in? I really hope so, but there is very little sign of that at the moment. I suspect investment in hydrogen will be a step forward yet campaigners are already attempting to increase the cost to fit their ideals.
Meanwhile, I noted on TV last night a feature about gas shipments arriving in UK from USA, who appear to be drilling more wells week on week.
Around 85% of the massively increased fuel cost is due to the soaring world gas price. Isn’t the green levy surcharge a fixed amount rather than a percentage? The 5% VAT is an increasingly large amount of the bill too when price spirals. How much of the ‘green’ surcharge is paying for nuclear?
Genuine renewables ARE becoming significantly cheaper, so the greater the proportion of overall UK supply, the less the prices will be affected by world gas prices and geopolitics.
You’re obviously right about the cost of security for renewables if it’s added in though. When the govt order dozens of front line police officers to travel hundreds of miles to stand guard around people’s rooftop solar panels and start patrolling moorland wind farms it will cost us all a fortune.