Burnham to Back North Sea Oil and Take Control of Thames Water

Article content

(Bloomberg) — Within days of taking office incoming prime minister Andy Burnham is preparing to announce new drilling for oil and gas in the North Sea as well as taking public control of Thames Water.

Article content

Burnham’s team has asked the civil service to draw up plans for new energy and water policies that can be revealed as soon as next week, according to people familiar with the matter. He will succeed Keir Starmer as premier on Monday and is planning a series of public statements in his first days to mark a change from the previous administration.

Article content

Article content

Article content

Officials are working on a range of options, the people said. They include signaling a willingness to approve new drilling at the Jackdaw gas and Rosebank oil fields off the coast of Scotland, and an expansion of so-called tie-backs which allow further drilling on or near existing ones.

Article content

Article content

No final decision has been made on what form the North Sea announcement will take, but Burnham is likely to indicate that he is in favor of more drilling, the people said. A spokesperson for Burnham declined to comment. 

Article content

The future of North Sea oil and gas has become even more of a political flashpoint since the start of the Iran War, which has prompted countries to turn to homegrown energy sources. The current Energy Secretary Ed Miliband has resisted calls from some corners of business and politics to allow new drilling licenses, instead ramping up renewables. 

Article content

But he has faced powerful critics including US President Donald Trump and RenewableUK, a professional association with members from both the traditional energy sector and the newer, cleaner one. 

Article content

Government officials expect Burnham eventually to back at least the Jackdaw project, but public consultations have recently been launched on Jackdaw and Rosebank so his government may not be able to formally approve them before those have run their course — a constraint that has also bound the current energy secretary. 

Article content

Article content

Previous approvals for the fields were overturned by the courts. And the ultimate decision will rest with the person Burnham names to Miliband’s post, because such project approvals are not a cabinet decision.

Article content

Burnham has said he won’t name his new ministers until he takes office on Monday. Miliband, the incumbent energy secretary, has been a staunch supporter of net zero policies, although has expressed a willingness to be pragmatic on North Sea oil and gas.

Article content

New drilling would draw criticism from environmentalists and some on the left of the Labour Party who have opposed it on the grounds that it would damage Britain’s net zero commitments.

Article content

One official said approving Jackdaw and Rosebank wouldn’t breach Labour’s manifesto pledge to ban fresh licenses to explore new oil and gas fields, because the licenses were granted under the previous Conservative government.

Article content

Thames Water

Article content

Burnham’s aides have also tasked the civil service with preparing an announcement on the public control of Thames Water. They have told officials they want to make water a priority.

Article content

One of the options being drawn up is putting Thames Water into special administration, a form of temporary nationalization. Some officials working on the transition plans see it as likely Burnham will proceed with that outcome for the utility, which supplies 16 million customers in London and the surrounding areas.