Andy Burnham is planning to defy Foreign Secretary Ed Miliband by giving the green light to drill the North Sea’s Rosebank oil field.
Whitehall sources revealed that the Prime Minister and Chancellor John Healey are plotting to override the opposition of Mr Miliband and Energy Secretary Miatta Fahnbulleh by pumping Rosebank’s 500 million barrels of oil.
Mr Miliband has previously referred to proposals for the oil field as ‘climate vandalism’.
The decision is understood to have been reached during tense preparations for Wednesday’s Budget, which have highlighted the fragile state of the nation’s finances, the lack of growth in the economy and the destabilising effect of high energy prices.
Mr Healey is struggling to put together a package of support for low-income families and suffering businesses against a backdrop of high Government borrowing costs and shrinking ‘fiscal headroom’ – the cushion of extra money kept by the Treasury as an insurance against unforeseen hits to the economy.
Drilling Rosebank would be a further blow for those environmentalists and Labour MPs who objected to a decision last week to approve the exploitation of the Jackdaw gas field.
They say Rosebank, which lies 80 miles west of the Shetlands and is the UK’s largest undeveloped oil and gas field, would emit seven times the carbon dioxide of Jackdaw.
More than 90 per cent of its reserves are oil, the majority of which is likely to be exported to the global market.
The Prime Minister and Chancellor John Healey will override Ed Miliband and give the green light to drill the North Sea’s Rosebank oil field
Drilling Rosebank would be a blow for Labour MPs who recently objected to a decision to approve the exploitation of the Jackdaw gas field
The news comes despite briefings last week from aides to Ms Fahnbulleh that she was ‘minded’ to reject Rosebank drilling.
In an attempt to mollify Mr Miliband and Ms Fahnbulleh, a proportion of the proceeds of the drilling would be funnelled into the Energy Wealth Fund, which was set up to invest in renewable and low-carbon technology.
The tax revenues will be backed with an initial £2 billion into the fund. Last night a minister said: ‘Both Andy and John have decided Rosebank needs to go ahead. The economic and energy security case is so strong, and the Energy Wealth Fund will help mitigate concerns around the environment.
‘The unions are strongly behind the decision and so are the bulk of the PLP [Parliamentary Labour Party]. It’s the only sensible decision.’
The unions have lobbied the Government to approve the drilling to preserve jobs in the industry. In March, Unite general secretary Sharon Graham said: ‘The Government’s position on oil and gas is putting jobs and national security at risk. Blocking oil and gas production in the North Sea, especially now, is simply an act of monumental political self-harm.
‘Domestic gas from Jackdaw and oil from Rosebank are essential for jobs and for energy security.’
Voters are also supportive of new oil drilling, according to polling conducted by Lord Ashcroft, the former Conservative deputy chairman. He found that 48 per cent wanted the ban on North Sea oil exploration lifted, compared with 32 per cent who wanted it to remain.
In addition, a majority – 53 per cent – did not think Mr Miliband’s Net Zero ambitions were worth it if the price to pay was higher household bills.
Voters are also cynical about the impact of Britain’s environmental measures on the global climate, with only 32 per cent thinking it makes any difference. They place climate change fourth on the list of national priorities, behind the cost of living, immigration and
the NHS. The decision comes after Baroness Harman, a former deputy party leader, yesterday urged ministers to ‘make the green argument’ for supporting Rosebank.
She said: ‘I think they should approve it, and I think they should strongly make the green argument for doing it by investing the proceeds into turbocharging our homegrown renewable energy.’
The move will be welcomed by Donald Trump, who popularised the phrase ‘drill baby drill’ in his 2024 election campaign. The US President said after the Jackdaw announcement: ‘I’ve been after them [Britain] to do that for two years… It’s going to make the UK a very wealthy country.’
