Oil projects must take the full climate impact into account, a British court rules

Britain’s highest court has ruled that local councils and planning groups must consider the full environmental impact of new fossil fuel projects when deciding whether to approve them. A decision that could have far-reaching consequences and that climate activists will welcome as a major victory.

In particular, the ruling will make it harder for Britain to move forward with plans to develop major offshore oil fields in the North Sea, including Rosebank, one of the country’s largest undeveloped oil fields. Rosebank, located off the coast of Scotland, contains an estimated 300 million barrels of recoverable oil.

“This is of great importance, not just in Britain but in the world,” said Annalisa Savaresi, professor of climate change law at the University of Stirling in Scotland, of the British Supreme Court ruling on Thursday. “It is not the end of oil production, but it is certainly an important procedural step that is long overdue.”

Previously, councils and planning groups in the UK were required to consider only the planet-warming emissions from their own operations. Now they must also estimate and disclose the emissions produced by their suppliers or consumers, such as from oil being refined or burned as fuel. These emissions, produced along what is known as a company’s “value chain”, account for the bulk of the greenhouse gas emissions associated with oil production.

The cases are among a growing number of climate change-related cases being decided by international tribunals, national courts and in U.S. states. In January, a court in Norway ruled that three permits issued by the government for the development of new oil and gas fields were invalid because the environmental consequences had not been sufficiently assessed. And in April, the European Court of Human Rights ruled that Switzerland had failed to meet its carbon emissions reduction targets and must take action to address that failure.

The ruling in Britain, a 3-to-2 decision by Supreme Court justicesconcerned a case brought against Surrey County Council, south-west of London, by an environmentalist who argued that a proposal for new oil wells should take into account the impact of emissions from the use of extracted oil. Judge George Leggatt, delivering the majority opinion, wrote that it was “unavoidable” that oil from the site would be burned and therefore had to be taken into account.

Stephen Sanderson, the CEO of UK Oil and Gas, which co-owns the Surrey project, said on Thursday the decision was “baffling” but added the company would work with local planning authorities to address the change in requirements.

Jorge Viñuales, professor of law and environmental policy at the University of Cambridge, said the ruling was particularly significant, even outside the country, because the UK Supreme Court is not known as an activist court.

That dynamic, said Nikki Reisch, director of climate and energy at the Center for International Environmental Law in Washington, “gives so much more weight to the conclusions drawn.”

In the United States, the Securities and Exchange Commission unveiled a watered-down proposal in March that would not require companies to disclose emissions produced by their suppliers or consumers. Companies had argued that disclosing the full climate impact of their projects would be too complicated and expensive. But Ms. Reisch said Thursday’s ruling adds weight to arguments that U.S. agencies must also consider the full life cycle of greenhouse gas emissions.

Climate disasters, exacerbated by the use of fossil fuels, are taking an increasing toll worldwide, with people facing extreme heat, floods and fires.

In the past two months alone, dozens of cities in Mexico have broken heat records, killing more than 100 people. Greece is bracing for wildfires, and India has seen temperatures as high as 126 degrees Fahrenheit. In the United States, nearly 100 million people are facing scorching temperatures that are expected to last through the weekend.

The International Energy Agency, the world’s largest energy agency, said in 2021 that oil and gas extraction projects had to be stopped to control global warming by 2050, but oil companies and countries around the world continue to do so.

In Britain, Prime Minister Rishi Sunak has encouraged more oil and gas licenses in the North Sea and scaled back his Conservative Party’s climate pledges ahead of the general election scheduled for July 4.

The opposition Labour Party, which is expected to secure the most seats in parliament in that vote, has also scaled back its ambitious climate policies and pledged not to revoke existing permits for oil and gas projects.

The British government last year gave the green light to the development of Rosebank, which would boost the British oil and gas industry and is expected to generate 8.1 billion pounds, or about $10.2 billion, in direct investment and about Would support 1,600 jobs in the construction phase. Climate activists have taken legal action against the government’s plans, saying the Rosebank development breaches the UK’s climate pledges.

Courts hearing high-profile cases like Rosebank “will now have to take this into account, which is a big change for them,” said Thomas Hale, professor of environmental studies at Oxford University’s Blavatnik School of Government.

Dr Hale added that as more courts and governments in Europe declare that comprehensive emissions must be taken into account, the narrower approach used by oil companies, where their calculations exclude emissions from the products they sell, appears less viable.

“For investors, that’s a big concern,” Dr. Hale said. “When you think about the regulatory pressure that a company might face, that’s another kind of warning that the approach they’re taking is not legally sustainable.”

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