(Reuters) – A U.K. High Court threw out a case brought by climate activists from the country’s oil and gas regulator OGA, rejecting their argument that the OGA’s actions amount to a kind of unlawful subsidy from the fossil fuel sector.
The ruling, seen by Reuters, is really a setback for climate activists who're increasingly taking to the courts to make a reduction in oil and gas production in order to control climatic change. Particularly, activists won a landmark Dutch case in May requiring Shell to deepen emission cuts.
In the U.K. case, activists including a former oil refinery worker targeted the OGA’s assessment of applications for gas and oil field developments on the pre-tax basis, noting in certain years if oil and gas prices were low the government actually returned money to producers instead of benefiting from tax receipts.
This, they argue, is in conflict with both the government’s long-standing policy of “maximizing economic recovery” of oil and gas within the British North Sea, meaning that gas and oil extraction there should make commercial sense, and with Britain’s 2050 net-zero emissions goal.
“I reject the contention that the strategy is unlawful since the meaning of ‘economically recoverable’ was irrational. The result is the claimants’ claim fails and is dismissed,” Judge Sara Cockerill said in the ruling document.
Britain’s treasury received around 248 million pounds ($337 million) from gas and oil production in 2022-21, a drop of 71% around the previous year, based on official data, as a result of plunge in oil and gas prices during the pandemic.
In some pot statement, the claimants Mikaela Loach, Kairin van Sweeden and Jeremy Cox said they'd decide whether or not to appeal within the next few days.
“It doesn't matter what we decide, the billions the U.K. government has wasted propping in the oil and gas industry have finally been made public. There isn't any going back. The fight to stop the flow of public money to oil and gas companies is just starting out,” they said.
The Paid to Pollute campaigners highlight tax years for example 2022-17 when an oil price slump meant the government returned 400 million pounds to oil producers.
British energy and business secretary Kwasi Kwarteng and also the OGA said they welcomed the ruling.
