The UK Government has refused to commit to stopping the development of the Rosebank oil and gas field north of the Shetland Islands.
It is the largest such field in the North Sea area, capable of producing 69,000 barrels of oil and 44 million cubic feet of gas per day, according to Equinor, which has the operating rights.
When asked by Labour’s Richard Burgon whether the Conservatives would use their powers to halt development, Climate Change Minister Graham Stuart said fossil fuels will still be required for decades to come and that it is better to produce gas on the UK Continental Shelf than import it from other countries.
He said: “The honourable gentleman is saying to his constituents, let’s pay billions to foreign, sometimes hostile states, rather than producing our own.
“It’s economic madness, the gas we bring in on tankers has two and a half times the emissions of our domestically produced gas.
“On what planet would any rational and reasonable constituency MP want to propose that as a proposal, unless they have some strange affinity with somewhere like Russia?”
Critics of the Rosebank development have said that Equinor, a Norwegian oil giant, is under no obligation to sell its oil and gas to the UK and will do so to the highest bidder.
Because of allowances in the windfall tax which mean fossil fuel companies can offset their tax contributions if they invest in new oil and gas projects, Equinor would pay only 10% of the development costs.
Government support would amount to £3.75bn if Rosebank is approved, while Equinor would pay only £350m.
Scientists have warned that approving Rosebank would make it much more challenging to limit the global average temperature to 1.5C above pre-industrial levels.
In a letter signed by 700 UK experts urging Westminster to block all new oil and gas licences, they said “continued use of fossil fuels is a threat to us, our children and their children”.
Shadow climate change secretary Ed Miliband has said Labour would end new oil and gas licences, which the International Energy Agency has said must happen if the world is to reach net zero by 2050.
During a speech on Tuesday outlining his party’s green economy ideas, he said: “Government is putting up 90% of the cost of this field; 80% of the oil exported; the equivalent of 56 coal-fired power stations running for a year in the UK; half of our annual emissions.
“Why is that a good use of taxpayers’ money? The UN Secretary-General [Antonio Guterres] has described this approach as moral madness.”
Addressing the House of Commons on Thursday, he called the government’s Powering Up Britain energy security plan a “Groundhog Day of re-announcements”, adding: “The documents are most notable for their glaring omissions: there is no removal of the onshore wind ban, which is costing families hundreds of pounds on bills a year.”
Stuart said the UK must “diversify, decarbonise and domesticate” energy suppliers to secure cheap, clean power.
As part of the new plans, he said, the government is launching Great British Nuclear to “put clean nuclear power at the heart of Britain’s energy security and spearhead a busy programme of new nuclear projects starting with a competitive down election this year to choose the best small modular reactor technologies”.
He also said the government would be launching the floating offshore wind manufacturing investment scheme, a shortlist and funding for the first round of electrolytic hydrogen allocation and upgrades through the new Great British Insulation scheme.
Separately, First Minister Humza Yousaf hit out at the UK Government as he claimed its new energy strategy had “relegated” a planned carbon capture and storage project in the north east of Scotland.
He contrasted the approach of the Scottish Government with that of the Conservatives at Westminster – saying he had appointed a Net Zero and Just Transition Secretary to “unlock our green potential”.
Yousaf was speaking after the Acorn project in the north-east was included in Track-2 of the UK’s capture usage and storage (CCUS) cluster sequencing process, which aims to identify the next two projects that will contribute to the Government’s ambition to capture and successfully store some 20 to 30 megatonnes of CO2 emissions a year by 2030.
It said that, at this stage, it considers the Acorn Transport and Storage System in Aberdeenshire one of the two best placed to deliver its objectives.
Scottish Social Justice Secretary Shirley-Anne Somerville branded the decision not to award the Scottish cluster Track-1 status “frankly illogical”.
She said while the UK Government strategy did have “some welcome announcements”, ministers had failed to “provide a clear content and a strategy to decarbonise the energy economy”.
Somerville said: “While we welcome the UK finally setting out the Scottish cluster is eligible for Track-2, they have failed to provide any certainty for when that funding will be awarded.
“This government will continue to support the north east and ensure we are supporting our highly skilled workforce. It is disappointing that the UK Government has once again failed to do so.”
Her comments came after Westminster’s net zero minister had insisted Scotland would be “at the heart” of UK Government plans to power up Britain – with a pledge that jobs and investment will come north as a result of its strategy to boost affordable, clean, home-grown power and build green industries.
Scotland is also said to be central to the UK Government’s goal of achieving 10GW of hydrogen production by 2030.
Four of the first 15 projects to be given a share of the £240m Net Zero Hydrogen Fund (NZHF) to develop new low-carbon hydrogen production plants are in Scotland, it was announced on Thursday.
Scotland’s winning NZHF projects are Statera, based in Kintore, which plans to develop a 3GW, grid-connected, electrolytic hydrogen project that aims to use excess wind power to produce low-carbon, green hydrogen and supply it to the UK’s most carbon-intensive industrial clusters through existing gas transmission pipelines.
Octopus Energy’s Lanarkshire Green Hydrogen project plans to deploy 15MW of electrolysis directly connected to an onshore wind farm to produce more than 3.5 tonnes per day of green hydrogen.
The other winning projects are Falck Renewables, which plans to develop its Knockshinnoch Green Hydrogen Hub Project in Ayrshire, and Getech, which aims to build a major green hydrogen hub in Inverness that will produce, store and dispense green hydrogen – upwards of 10 tonnes a day over time.
UK Energy Security Secretary Grant Shapps has also launched a £160m fund for projects to build the port infrastructure needed to support further floating offshore wind power.
Prime Minister Rishi Sunak said: “Thanks to our unique geography and strong expertise in clean technology, the UK is well placed to create thriving new industries in carbon capture, hydrogen and floating offshore wind across the country.
“By investing in new ways to power Britain from Britain, we will not only strengthen our long-term energy security, but also deliver on our promise to grow the economy with well-paid jobs and opportunities for businesses to export their expertise around the world.”
Scotland Office minister John Lamont said Scotland’s green energy potential is “at the heart” of the UK Government’s plans to deliver energy security, drive investment and grow the economy by developing clean domestic power sources.
He added: “From the carbon capture sector, where we are progressing at pace and investing up to £20bn to help decarbonise our industries, to offshore wind, funding for low-carbon hydrogen projects and making the Contracts for Difference round an annual event, Scotland is a key part of the UK’s net zero plans and helping to boost economic growth through green jobs.”
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