Furious Labour MPs have been lobbying the prime minister and chancellor not to overrule the energy secretary should she decide to block the Rosebank oilfield.
MPs say they are alarmed at the cabinet splits that have emerged over the issue after sources told the Guardian that Miatta Fahnbulleh was minded to refuse environmental permission for the field.
Sources close to the chancellor, John Healey, have since made it clear he is in favour of the scheme, while some in government believe the prime minister, Andy Burnham, also wants it to go ahead.
Backbenchers worried about the environmental impact of the project are now urging their whips and Downing Street not to allow other ministers to intervene in Fahnbulleh’s decision.
Catherine Fookes, a Labour member of the energy select committee, said: “Approving Rosebank will blow a hole in our green credentials. A group of us is making it clear to leadership that this should be Miatta’s decision and I hope they listen.
“Labour MPs are really, really concerned about it – it would go against the thrust of our manifesto.”
Another MP said: “If Healey pushes through Rosebank, there will be blood. It’s economically shortsighted as well as politically explosive – they aren’t listening at all to the discomfort on the backbenches.”
Another commented: “Lots of us have raised this. I think the position Miatta has been put in by these briefings is intolerable.” Concerns are understood to also have been raised with Healey directly in budget meetings with MPs.
Fahnbulleh’s parliamentary aides have circulated a memo to MPs insisting she would have the final say on the proposals, after a number of MPs contacted them to raise concerns that she would be overruled.
“No decision has been made on Rosebank,” the memo said. “The energy secretary will consider all relevant factors in a case before reaching a decision.
“The energy secretary is the only decision maker and will consider all relevant factors as part of the quasi-judicial process. No other cabinet member or minister has any role in this decision and does not see the advice on it,” it added.
Burnham has promised to take a “pragmatic” approach to North Sea oil drilling, calling the Jackdaw gasfield, which the government approved last week, “a bridge to the future”.
The prime minister insists the decision over Rosebank will be for Fahnbulleh alone to make.
But he prompted speculation about his support for the project on Wednesday, when he told the Commons: “Use of our reserves can support and accelerate a clean energy future, and that was very much the logic behind the decision that the government announced on Jackdaw last week.”
Many in government believe Fahnbulleh can approve the bigger Rosebank scheme without breaching the UK’s carbon commitments, in part because most of its oil would be exported.
The Guardian also revealed on Tuesday that the Treasury had already factored in tax revenues from the scheme, which are expected to hit about £500m by the end of this parliament.
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Treasury officials said on Wednesday the money had been included in forecasts from the Office for Budget Responsibility (OBR) since 2019, and that doing so would not prevent the energy secretary from blocking it.
The OBR said in its budget forecast on Wednesday: “The projection includes production from currently producing fields (including Jackdaw), and the North Sea Transition Authority’s estimate of production from development of new fields, which includes Rosebank, and from future discoveries.
“The forecast annual pace of decline [in oil and gas production] would be around 14% a year if there were no production from any new fields.”
The memo from Fahnbulleh’s aides added that decisions to score Rosebank as part of the forecast would be a decision for the OBR.
However, some Labour MPs believe the Treasury has been using aggressive tactics to strong-arm the energy department, with one describing the approach of No 11 as “macho bullshit”.
Clive Lewis, another Labour MP, said: “You cannot claim global climate leadership while approving new oilfields simply because you’ve already pencilled in the tax receipts. Tax ‘receipts’, as I understand it, that will be the operator’s estimate and not actual Treasury revenue.”
Analysis by Uplift, a campaign group, found that on the government’s and industry’s estimates, the tax take from Rosebank would probably be limited and could be outweighed by the tax breaks and incentives likely to be offered for the development and decommissioning of the fields.
Areeba Hamid, a co-executive director of Greenpeace UK, said: “Any tax revenues from this far-off field in a rapidly declining basin don’t just leave our public services at the hostage of future oil prices, they also leave taxpayers on the hook for the costs of decommissioning for decades to come. The truth is that approving new oil drilling in the North Sea will only add to the costs of climate impacts, costs not fully factored into forecasts such as those from the OBR. Any economist should be able to see that.”
MPs said there would be a significant parliamentary rebellion on Rosebank, unlike Jackdaw, where they were prepared to accept the argument to allow gas to be extracted for domestic consumption.
Fookes said: “The case was made for Jackdaw to some degree and we remained quite quiet over that. Rosebank, however, is a different issue.”
