Will the approval of Jackdaw mean lower gas bills?published at 11:25 BST

11:25 BST

By Ben Chu, policy and analysis correspondent, and Tom Edgington

Jackdaw is one of the largest unexploited gas fields in the North Sea. However, most experts don’t expect the extra gas produced from it to translate into significantly cheaper bills for consumers.

That’s because it will be sold at European market prices rather than “reserved for British consumers at a discount”, Karl Matikonis, professor of taxation at University College Dublin, tells BBC Verify.

The additional gas extracted from Jackdaw won’t be enough to meaningfully reduce those prices, as it is a relatively small volume compared to the total amount used and produced by Europe.

However, it could result in more corporation tax revenues for the UK government, because any profits made by the owner of the gas field would be taxable.

The government has acknowledged the decision won't affect bills for this winter. Asked by BBC Radio Scotland if people would see reduced costs this year, energy secretary Miatta Fahnbulleh said "no, it won't", adding it is "important to say that upfront".

The government says it will use tax revenues from North Sea gas and oil to invest in green energy projects to “help get bills down for good in the long term”.

Harry Farley
Political correspondent

So far - and we should stress it is still early in the day - there is little pushback from Labour MPs about this decision.

Plenty are supportive. Henry Tufnell from the Industry First Group of MPs said the government "has seen sense."

"Opening up Jackdaw will protect British jobs, enhance energy security and boost tax revenue," he adds.

"The next logical step: approve Rosebank and cut carbon taxes on UK industry."

That call - to now approve the oil field Rosebank - will be much more controversial with Labour MPs than the one to approve the Jackdaw gas field has been.

A Labour MP who doesn’t much like the Jackdaw decision but admitted it "can make sense", told me "Rosebank is another story. That can’t happen," they said.

Charities have been reacting to the government’s decision to allow new gas to be extracted from Jackdaw in the North Sea.

Conservation group Oceana UK accuses the government of undermining “UK climate leadership for gas that won’t even lower our bills”.

Oxfam, meanwhile, says the government has “drilled straight through the UK’s climate commitments” and accuses Burnham of sending “the wrong signal as the impacts of climate change intensify”.

The charity says the government must commit to not approving any new oil and gas licences, including at Rosebank off the coast of Shetland.

ActionAid UK calls the move “appalling and indefensible” and says the government must reverse its decision and “act on its historic responsibility, not add to the problem".

• You can see reactions from business leaders here who are welcoming an energy security "boost", and from unions who celebrate the commitment to jobs

Justin Rowlatt
Climate editor

Image source, AFP

The timing is uncomfortable for the government.

Jackdaw was approved on the same day the UN Environment Programme (Unep) warned that the world will now breach the 1.5C (34.7F) global warming limit, at least temporarily, after "decades of insufficient climate action".

Unep’s annual Emissions Gap report measures how far off course the world is from cutting the greenhouse gas emissions that drive climate change.

This year’s report says that even in the best case, warming will peak at about 1.7 to 1.8C, by around mid-century.

The risks from climate change, such as intense heatwaves, rising sea-levels and loss of wildlife, would be much higher at 2C of warming than at 1.5C, according to scientists.

Bringing it back below 1.5C by 2100 would require global emissions to fall 18% by 2030, compared with 2025 levels.

Unep has said the pledges governments have made so far would deliver less than half the cut needed.

Image source, EPA

Protesters have gathered outside the Department for Energy Security and Net Zero in Westminster this morning to condemn the government's decision to approve gas extraction from the Jackdaw field in the North Sea.

Fossil Free London organised the demonstration. People could be seen holding placards that read "new oil is a death sentence" and "stop Jackdaw".

The group's founder says the approval "is an outrage and it's basically climate denial".

Robin Wells says governments make "promise after promise, it's been blah blah blah since the first COP".

Image source, EPA

Image source, Bloomberg via Getty Images

Unions are among those reacting to the Jackdaw decision.

Unite argued for the Jackdaw approval, and this morning general secretary Sharon Graham reiterates that the UK cannot have a "jobless transition" to renewable energy.

She also says that although the union supports net zero, it cannot "abandon its energy security or offshore our carbon responsibilities".

"This gives us a bit more time to create and fund a concrete plan for commensurate jobs for workers currently working in the North Sea," Graham adds.

GMB general secretary Gary Smith also welcomes the Jackdaw announcement, describing it as "great news". Vital decisions on gas supply have been put off "for too long", he says, which has risked the UK’s energy security "at a time of worrying international volatility".

Smith says GMB will now press for the government to grant permission for Rosebank, a contentious oil field that the government is yet to make its decision on.

Image source, Morgan Spence / BBC News

Business leaders in Aberdeen are describing the Jackdaw approval as "a major boost for energy security, jobs and investment in the North Sea".

Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, says the "hugely welcome decision" is "exactly the sort of pragmatic call the North Sea has been crying out for".

"Every molecule of gas we produce in the North Sea, under some of the world's highest environmental standards, is a molecule we don't have to import on a tanker from overseas. That's good for jobs, good for the supply chain, and good for the climate."

Shiona McCallum
Senior technology reporter, reporting from Aberdeen

Energy Secretary Miatta Fahnbulleh is here in Aberdeen.

Speaking at a very wet and windy Port of Aberdeen earlier, she delivered a clear message: homegrown gas still has a role to play as the government pursues its climate ambitions and its drive towards net zero.

Image source, POOL

She acknowledged that the government has been grappling with the transition to cleaner energy, but said that, after careful consideration, Jackdaw can be part of that picture.

Today's decision is significant because it signals the government's wider approach to Britain's energy future. That will be one that seeks to balance continued domestic oil and gas production with the transition to cleaner energy.

And that balancing act is reflected in the reaction from the wider energy industry.

Greg Jackson, the chief executive of Octopus Energy, tells the BBC: "Of course, this will help maintain jobs here for longer, and it will pay taxes here.

"But in the long run, we need to get off gas, which is why electrification, moving to heat pumps are so important to escape this dependence on prices set in geopolitically unstable regions and by dictators for good."

And that perhaps sums up the challenge facing the government, balancing the need to protect jobs and maintain energy security today, while moving towards a future where Britain is less reliant on fossil fuels.

Image source, Getty Images

Scotland's First Minister John Swinney has now also weighed in, saying that he hopes the announcement on Jackdaw will provide some certainty for the north east of Scotland, after "many years of difficulty thanks to UK Government policy".

"It must also kickstart a renewed drive to deliver our long-standing clean energy ambitions," he writes on X.

He says any income from oil and gas must be protected and used to support Scottish communities.

"It is vital that the economic benefits of our energy are felt here in Scotland and used to bring energy bills down, rather than flowing to the Treasury to plug more short term spending gaps," he adds.

Swinney adds that the climate compatibility tests ordered for the project must've formed the basis for the approval, "alongside a recognition that carbon emissions from this field would have been lower than imports".

Political reaction continues to pour in after the UK government's announcement on the Jackdaw gas field.

Scottish Labour leader Michael Marra says approving Jackdaw"is the right decision for Scotland’s energy security, our industrial base and the skilled workers who have powered our economy for generations".

He adds: "This is about putting industry and pragmatism before narrow ideology - the next step for Scotland should be new nuclear and renewable projects built by Scottish workers."

Douglas Lumsden, Tory MP for Aberdeen South where the owner of Jackdaw is headquartered, says today's decision is a "victory" for locals.

"But the ridiculous wait for a decision has crippled the industry, and we must never forget the damage caused by Labour’s reluctance to support this project," he adds.

The Scottish Greens say the PM has "continued to devastate our climate".

The party's co-leader Ross Greer says Andy Burnham's government could have focused instead on lowering bills and investing in clean, green renewable energy.

The Scottish Liberal Democrats say the announcement will be a relief for North Sea workers but insist promises of a just transition to renewables continue to fall short.

Party energy spokesperson Sanne Dijkstra-Downie says receiving approval during a climate crisis proves the Scottish and UK governments "haven't moved nearly fast enough" to reduce the need and demand for oil and gas.

Image source, EPA

Shell, energy giant and one of the joint owners of Jackdaw operator Adura, has welcomed the government's approval.

"This is an important step in ensuring the UK North Sea can continue to contribute to the country’s energy security and economy," Shell UK chief of staff Tony Nunan says.

“We will continue to work constructively with government and Adura to support secure energy, investment and growth in the UK," Nunan adds.

Angus Cochrane
BBC Scotland senior political reporter

The Jackdaw gas field, initially approved in 2022, has been subject to years of debates with strong pushback from environmental groups.

Environmentalists insist that more drilling would hamper efforts to cut planet-warming carbon emissions as deadly heatwaves and extreme weather affect billions across the globe.

They also say starting production would not protect energy security and that transitioning sooner to greener technologies would be better for supporting jobs.

The Court of Session in Edinburgh ruled last year that Jackdaw had been unlawfully approved because the government had failed to take into account the climate impact of burning extracted oil and gas from the sites.

A judge ruled that more detailed climate assessments had to be published.

Operater Adura said the climate effects would be "minor" because the UK has a "well-regulated industry" aligned with the Paris Agreement, a legally binding commitment to limit global warming to between 1.5 and 2C.

However, Greenpeace UK chief scientist Doug Parr said opening a new field was "wholly incompatible" with the Paris Agreement.

Greenpeace co-executive director Areeba Hamid has condemned the government's decision to extract gas from Jackdaw in the North Sea.

Greenpeace led legal action against the Conservative government's approval of Jackdaw in 2022, ultimately leading to the project getting blocked by a judge in 2025.

Hamid tells BBC Radio 4's Today programme it's "the wrong decision" in terms of lowering energy bills, providing energy security and addressing climate change.

"The answer is not to choose between gas and gas, given where we are on climate impacts, the answer is to choose between gas and renewable energy," she says, adding that we need a transition plan away from planet-warming fossil fuels.

Another contentious subject is Rosebank oil field off Shetland. Greenpeace also launched a campaign against this project, which was blocked alongside Jackdaw.

Hamid points out that while "Jackdaw is a bad decision, but Rosebank is a far worse decision, [as] 90% of that oil will be traded on the international market, we don't get to decide how much we pay for that".

Simon Jack
Business editor

As part of the Jackdaw approval announcement, the government said it will allow for some new oil and gas production in areas that are near existing sites.

These so called "tie backs" can extend the life of existing fields to keep them viable for longer while still preventing exploration in new unlicensed areas.

The government has raised this prospect before but this is a firmer commitment and some may see this as an unwelcome expansion of the scope of new drilling in the North Sea.

Faisal Islam
Economics editor

The chancellor has announced alongside the approval of the Jackdaw gas development that a new Energy Wealth Fund will be established from North Sea oil and gas revenues to invest in clean energy.

It will invest in renewable and low carbon energy projects and is starting with a £2bn funding injection from government.

Revenues are currently £4bn a year, but had been projected to fall sharply over the coming years by the official forecasters the OBR, amid dwindling production and prices.

The announcement of Jackdaw, and the possible expansion of existing fields under “tie backs”, as well as the rising energy prices, will increase likely future revenues.

The UK has some catching up to do with its North Sea neighbour Norway. Norway established a petroleum fund with the tax receipts and dividends from its still state controlled oil sector in the 1970s.

The fund was invested in shares across the world and is now worth $2.4 trillion, the biggest sovereign fund in the world.

Harry Farley
Political correspondent

We’ve heard a series of interviews from the Energy Secretary Miatta Fahnbulleh and can get a sense of how the government is wanting to frame this decision.

This is not about lowering energy prices. As Fahnbulleh said, this decision "won’t lower energy bills this winter".

Instead the government is making an explicit link between the tax it will raise from this gas field, and funding renewable energy projects.

The chancellor will later today commit £2 billion into a new Energy Wealth Fund. That pot of cash will be used to fund low carbon and renewable energy projects.

Using the tax from Jackdaw specifically to fund the transition to green energy is something some Labour MPs have called for. It could help ease any discomfort on Labour’s backbenches about this decision.

Energy Secretary Miatta Fahnbulleh is asked whether the UK's target of reaching net zero by 2050 has to be reconsidered.

"That's not my view," Fahnbulleh replies.

Fahnbulleh is then asked about Rosebank, an oil field the government is yet to make its decision on.

The energy secretary says she will make decisions on a "case by case" basis, and she'll be going through all the information on Rosebank before making a decision "in due course".

Radio 4 presenter Justin Webb mentions her colleague Ed Miliband's comments on Rosebank when it was approved in 2023, calling it a "colossal waste of taxpayer money and climate vandalism".

"Was he wrong?" Fahnbulleh is asked.

She says the government will not make any decision that is "incompatible" with its climate commitments, including getting to net zero by 2050.

Energy Secretary Miatta Fahnbulleh is asked on the Today programme whether she has changed her tune on fossil fuels.

When Fahnbulleh was chief executive of the New Economics Foundation, the think tank put out a statement saying it would be harder and harder to keep global temperatures steady each time a fossil fuel project is approved.

Fahnbulleh says she still agrees with this take, saying "we have to move away from fossil fuels, the science is very clear".

However, as the UK transitions to renewable energy, it has to "be realistic about the world we're in", she says.

Fahnbulleh adds that the UK is "going to need gas" as part of the energy mix during this transition, and it is preferable for this gas to be "homegrown".

Energy Secretary Miatta Fahnbulleh is now speaking to the BBC Radio 4's Today programme.

You can watch live at the top of this page, and we'll bring you the key lines.

Just before 07:00 BST, the government issued a press release, saying production from Jackdaw gas field in the North Sea had been approved.

It comes four years after a licence was first granted, and almost two years after a court ruled that process was unlawful. Here's a recap of a busy morning:

• The announcement says Jackdaw "will start to supply gas to British homes and businesses from the end of this month" - but it won't lower your bills this winter, Energy Secretary Miatta Fahnbulleh tells the BBC
• Jackdaw "is expected to increase domestic gas production by around 6% at its peak", the government says, "supporting the UK’s gas supply over its lifespan of up to 11 years"

• Chancellor John Healey says a new "Energy Wealth Fund" - using tax revenue from oil and gas - will help pay for "green transition"
• But Zack Polanski, Green Party leader for England and Wales, calls the Jackdaw decision "climate vandalism", adding: "This is a victory for Shell over the people"
• Polanski says Jackdaw will only create 27 jobs - but the boss of the site's operators, Neil McCulloch, says it will support hundreds more
• Prime Minister Andy Burnham says the government remains committed to net zero by 2050, but says it's right to "maximise" the UK's "existing energy reserves"
• Conservative leader Kemi Badenoch backs the Jackdaw decision - but accuses the government of "faffing about"