Now that the Prime Minister is back from his trip to see Donald Trump and has enjoyed the emotional warm bath of his party conference, he rejoins the world of hard choices. The budget looms. A more immediate question is to decide on whether to proceed with drilling for gas and oil in the Jackdaw and Rosebank fields in the North Sea.

The politics are awful. Environmentalists regard the issue as central to the government’s credibility on climate change. The Labour v Green battle in Camden provides context. On the other hand, rejection of the developments will send a negative signal to those, including bond traders, who are looking for signs of commitment to economic growth and those who worry about energy security. Both sets of voices have been loudly heard at Labour conference not least from the new Scottish Labour leader, Michael Marra, who wants to press ahead with both developments. For her part, Kemi Badenoch has made this a signature issue for the Tories and will be shouting ‘Drill baby drill’ next week. President Trump will undoubtedly provide his own, loud backing for fossil fuel exploitation: if he can tear himself away from his plans to construct a giant ballroom and a triumphal age honouring his rule

In fact, the serious arguments are complex and allow for a nuanced approach. I took to the airwaves last week to defend Ed Davey’s decision to back the Jackdaw field on its own separate merits. Jackdaw is a Shell development (spoiler alert: I used to work for them 30 years ago). The gas field, east of Aberdeen, is already underway but was paused by a Greenpeace injunction seeking a climate change assessment. The field should provide around 5% of gas demand in the UK and that gas would be otherwise imported. Gas will remain a transitional fuel while renewables are developed and there are good reasons for producing it in Britain rather than importing it (Norway is the major and uncontroversial source; the USA and Qatar more subject to political intrusion). Ed was right on this issue and his experience as Energy Secretary gives credibility to his assessment. (I confess that I had more difficulty defending the proposed subsidy on motor fuel). 

The Rosebank field is a different matter. It is a large oil field, west of Shetland. The developer, Equinor, is in effect, the Norwegian government. The economics/environment ‘trade off’ is however much less favourable than for Jackdaw. The oil it produces would not have a market in the UK and would have to be exported; its production would have no bearing on UK domestic energy prices or on energy security. The long-term budget benefit for the budget through tax revenues would be offset by a large upfront payment from the government under the complexities of windfall taxation. The argument for proceeding with Jackdaw but not Rosebank has been made by one of Britain’s leading authorities on climate change policy and energy systems: Professor Michael Grubb at UCL as well as Ed Davey.

The climate change issue is as relevant as ever and the recent experience of weather extremes – including heatwaves in the Highlands of Scotland – is a reminder of the urgency. The fact that the UK only accounts for 1% of global emissions is seen , however, by some – Reform and the Tories- as an excuse for Britain opting out of global responsibilities and taking a narrow, short term, self-interested position, maximising use of the remaining deposits in the North Sea, regardless of the economic or environmental impact.  But it doesn’t help to counter this growing climate-scepticism by adopting an extreme, ideological position which disregards legitimate concerns around energy security which have been heightened by the wars in Ukraine and the Gulf and by Trump’s erratic and damaging presidency.

People on both extremes of the debate will be infuriated by such a compromise based on the evidence rather than dogma. But it may provide the Prime Minister with an elegant and responsible way out of a dangerous political trap.

* Sir Vince Cable is the former MP for Twickenham and was leader of the Liberal Democrats from 2017 until 2019. He also served in the Cabinet as Secretary of State for Business, Innovation and Skills from 2010 to 2015.