(Adds reaction from government minister)
By Shadia Nasralla
LONDON, Jan 18 (Reuters) - A UK High Court on Tuesday threw
out a case brought by climate activists against the country's
oil and gas regulator OGA, rejecting their argument that the
OGA's actions amount to a type of unlawful subsidy of the fossil
fuel sector.
The ruling, seen by Reuters, is a setback for climate
activists who are increasingly taking to the courts to force a
reduction in oil and gas production in order to control global
warming. In particular, activists won a landmark Dutch case in
May requiring Shell to deepen emission cuts https://www.reuters.com/business/sustainable-business/dutch-court-orders-shell-set-tougher-climate-targets-2021-05-26.
In the UK case, activists including a former oil refinery
worker targeted the OGA's assessment of applications for oil and
gas field developments on a pre-tax basis, noting in some years
if oil and gas prices were low the government actually returned
money to producers rather than benefiting from tax receipts.
This, they argue, is in conflict with both the government's
long-standing policy of "maximising economic recovery" of oil
and gas in the British North Sea, meaning that oil and gas
extraction there should make commercial sense, and with
Britain's 2050 net zero emissions goal.
"I reject the contention that the strategy is unlawful
because the definition of 'economically recoverable' was
irrational. It follows that 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 oil and gas production in 2020/21, a drop of 71%
on the previous year, according to official data, due to a
plunge in oil and gas prices during the pandemic.
In a joint statement, the claimants Mikaela Loach, Kairin
van Sweeden and Jeremy Cox said they would decide whether to
appeal within the next few days.
"Regardless of what we decide, the billions that the UK
government has wasted propping up the oil and gas industry have
finally been made public. There is no going back. The fight to
stop the flow of public money to oil and gas companies is just
getting started," they said.
The Paid to Pollute campaigners highlight tax years such as
2016/17 when an oil price slump meant the government returned
400 million pounds to oil producers.
British energy and business secretary Kwasi Kwarteng and the
OGA said they welcomed the ruling.
"Turning off North Sea oil and gas overnight would put
energy security, jobs and industries at risk - and make us even
more dependent on foreign imports. This has to be a transition,
not extinction," Kwarteng said on Twitter.
OGA lawyer Kate Gallafent had told the court in December the
benefits of oil and gas extractions were "a lot wider" than tax
revenues, pointing to energy security and jobs.
($1 = 0.7356 pounds)
(Reporting by Shadia Nasralla
Editing by Kirsten Donovan Alexandra Hudson and Mark Potter)