High Court Rejects Climate Change Based Challenge To Oil And Gas Licensing

• Jurisdiction: European Union
• Law Firm: Herbert Smith Freehills
• Subject Matter: Environment, Energy and Natural Resources, Energy Law, Environmental Law, Oil, Gas & Electricity, Climate Change
• Author: Mr Andrew Lidbetter, Nusrat Zar and Jasveer Randhawa
• Published date: 24 October 2023

The High Court has rejected the highly publicised judicial reviews by Greenpeace and Uplift to the Government's 33^rd licensing round for offshore oil and gas exploration and production, emphasising that its compatibility with net zero is a matter of judgment for the Government rather than a matter for the courts: R. (on the application of Greenpeace Limited) v Secretary of State for Energy Security and Net Zero, Oil and Gas Authority [2023] EWHC 2608 (Admin).

Key Points

• Whether the grant of further licences for oil and gas exploration and production is compatible with achieving the net zero target is a matter of judgment and not law
• The court will generally defer to the judgment of the democratically accountable decision maker in relation to issues concerning climate change
• At present there is no obligation to assess scope 3 downstream or end use emissions as part of the environmental assessment process for exploration and production of hydrocarbons

Background

The challenge centred on various decisions of the Secretary of State for Energy Security and Net Zero ("SoS") and the Oil and Gas Authority ("OGA") in connection with the further licensing round, and in particular the environmental assessment involved in the process which did not include scope 3 emissions, ie downstream emissions of greenhouse gases ("GHGs") from the end use by consumers of oil and gas as fuel. The policy for further licensing was contained in the non-statutory Offshore Energy Plan (the "Plan").

The licensing process allows for initial exploration for petroleum in specified areas, but then further consent is required before developing infrastructure or extracting oil and gas commercially, which itself cannot be given unless any necessary Environmental Impact Assessment ("EIA") is completed.

The claimants pointed to the UK's commitments under the Paris Agreement and the statutory net zero target for 2050 in the Climate Change Act 2008, together with the potential scale of the 33^rd licensing round which could lead to the grant of over 100 licences.

The SoS explained to the court that the UK contributes less than 1% of global GHG emissions and that UK supply projections are substantially lower than demand, meaning the UK expects to remain a net importer of oil and gas. The SoS also considered that even with continued exploration and development, the decline in UK North Sea production is expected to be faster than the global average decline required to keep to the 1.5 degrees celsius...