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Shell’s decision to abandon Cambo oil field does nothing to aid the transition to green energy

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Shell’s decision to abandon Cambo oil field does nothing to aid the transition to green energy

Sky’s Ian King argues that environmental campaigners and other critics have scored an own goal by opposing the project and will only force us to buy in more energy from abroad.

Shell’s decision not to proceed with its interest in the Cambo oil field may not necessarily be the triumph for environmental campaigners that they seem to think.

It does not, for example, guarantee that Cambo’s oil – some 170 million barrels worth over 25 years – will stay in the ground.

Shell only had a 30% interest in the project and its partner, the private equity-backed Siccar Point, which owns the majority 70% interest, has already made clear it hopes to find a new partner.

Moreover, even if Cambo were to be abandoned as a project, it would make little or no difference to the UK’s likely oil and gas consumption into the middle of the century.

For while the UK government has made clear its desire to transition away from fossil fuels, oil and gas still supply more than three-quarters of the UK’s energy needs and that is likely to be the case for some time to come.

Oil & Gas UK, the industry body, recently pointed out that, during the first six months of this year, the UK paid £11.3bn for Norwegian oil and gas, £3.7bn for Russian oil and gas and £675m for liquefied natural gas from Qatar.

Nor, it must be said, would abandoning Cambo make much difference in the wider context of UK oil production.

The projected output of 170 million barrels a day over 25 years works out at just over 18,360 barrels per day. Some 1.6 million barrels per day were extracted from British waters last year.

Shell’s decision not to go ahead with Cambo, which lies 75 miles to the north and west of the Shetland Islands, also has no bearing on its wider involvement in the UK oil and gas sector.

As the company said: “We believe the North Sea – and Shell in it – has a critical role to play in the UK’s energy mix, supporting the jobs and skills to enable a smooth transition to Britain’s low-carbon future.”

The chances are that Shell’s decision has been borne out of frustration at the failure of the government’s Oil and Gas Authority to give the project the green light.

Boris Johnson was unwilling to give the project his blessing in the build up to the COP26 summit in Glasgow and particularly after a letter signed by 80,000 people, opposing the project, was handed in at 10 Downing Street earlier this year.

The PM has also been reluctant to hand a chance to Nicola Sturgeon, Scotland’s first minister, to make political capital from the issue.

Ms Sturgeon – ironically, in view of the fact that the Scottish National Party’s earliest political gains were forged on the slogan ‘It’s Scotland’s oil’ – said last month she believed the project should not go ahead, hardening her previous stance of merely demanding environmental impact assessments.

Her stance has been controversial in the wider Scottish nationalist movement, however, with Fergus Mutch, the former head of press and research at the SNP, warning earlier this year that opposing Cambo would result in jobs being “flung on the scrapheap”.

Workers within the oil and gas industry have also been eager for the project to be given the go-ahead.

Louise Gilmour, Scotland secretary for the GMB union, has criticised Ms Sturgeon’s opposition to the project and has accused her of not coming up with a plan to support the transition of oil and gas workers into jobs in the renewable energy sector.

She said: “The first minister is clear about what she is against, but most people haven’t a clue about what she is for when it comes to our energy future.”

Mr Johnson’s stance is an echo of his prevaricating, again ahead of COP26, over the opening of a new coal mine in Cumbria – which he eventually came down against.

On that occasion, the arguments were very similar to the debate around Cambo – the prospect of new, well-paid jobs in a part of the world that needs them and the fact that cancelling the project would leave the UK more dependent on imported fuel, against the optics of supporting the fossil fuel sector at a time when the UK is seeking to transition to net zero carbon and parade its environmental credentials.

For longer-term watchers of Shell, meanwhile, this episode has echoes of a decision further back in time.

In May 1995, activists from Greenpeace – which has campaigned against Cambo – occupied Brent Spar, a redundant oil storage buoy that Shell proposed to dump at the bottom of the North Sea. The campaign spread across Europe and led to violent attacks on some of the company’s petrol stations and a consumer boycott in Germany.

Shell changed its mind six weeks later – event though its original proposal had been approved by the UK government on the grounds that, of the various options the company looked at, it would have the least harmful impact on the environment.

Greenpeace subsequently admitted some of the information it had put out during the campaign had been wrong.

By then, Brent Spar had been towed to a Norwegian fjord, where it was eventually broken up and turned into a quay extension. The UK’s natural environment research council later said there was little difference between that and the original proposal in terms of the environmental impact.

But a precedent had been set for Shell backing down in the face of an environmental campaign.

The company may protest that this decision has been taken on purely economic grounds, but it feels very much as though history is repeating itself.


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