Rosebank and Jackdaw: A Better Deal for Britain

Britain has got itself into a daft argument over Rosebank and Jackdaw. One side says drill, baby, drill. The other says leave it all in the ground. But there’s a third way that could cut bills, reduce unnecessary emissions and manage the decline of the North Sea properly.

Here’s the thing… if Rosebank and Jackdaw are going to happen, they should work for Britain.

Right now, they don’t.

Oil and gas extracted from the North Sea belongs to the companies producing it and is sold into international markets at international prices. So the idea that drilling more automatically gives us cheaper energy or “energy security” is nonsense. We learned that the hard way when Russia invaded Ukraine. Britain produced plenty of gas, but British households still got hammered by global gas prices.

We’ve been here before. And we don’t have to do it again.

The answer is something we already use very successfully for green energy: Contracts for Difference, or CfDs.

A CfD is basically a long-term deal around price. Producers get certainty over what they will receive, while consumers get protection from global price spikes. When market prices soar above the agreed level, the excess comes back. When they fall below it, the mechanism works the other way.

We’ve used CfDs to help build Britain’s renewable energy industry, giving investors the certainty needed to put billions into wind and solar. In fact, Energy UK estimates CfDs enabled £89 billion of renewable investment between 2014 and 2024. So why not use the same principle to manage the North Sea as it declines?

Our research on a fair deal for North Sea energy shows just how big the opportunity is. Had this approach been in place during the energy crisis, Britain could have saved £43 billion on energy bills in 2022 alone, while holding inflation 1.5% lower.

That matters because energy bills don’t just determine what households have left at the end of the month. They feed into the price of almost everything.

Energy is the economy.

We’ve already argued that Britain needs to break the link between fossil fuels and renewable electricity prices. A North Sea CfD tackles another part of the same broken system. It stops us pretending that an international fossil fuel market will somehow put British consumers first. It won’t. Markets don’t do patriotism.

There’s a climate argument here too, although we need to be clear about it. The long-term answer is not more fossil fuels. It’s green energy. Wind, solar, storage and genuinely renewable gas give us the route to energy independence, lower bills and ultimately zero fossil fuels.

But we aren’t there yet.

Britain will still use some fossil gas while we make that transition. Meanwhile, 92% of the oil and 34% of the gas produced in the North Sea in 2024 was exported. Our current system therefore does a pretty rubbish job of turning “our oil and gas” into energy security.

And importing the stuff carries an additional climate cost. The North Sea Transition Authority says domestically produced gas has less than a quarter of the production emissions intensity of imported LNG. Shipping fossil fuels around the planet while claiming that makes us greener would be a pretty strange form of climate policy.

The goal should be to manage North Sea decline rather than pretend it isn’t happening. Protect workers and consumers while replacing fossil energy as fast as possible with homegrown green energy. That’s the wider argument in our plan to cut energy bills and fix Britain’s broken market.

And the idea that CfDs can only ever be used in one narrow way doesn’t really stack up. The government has already shown that energy price mechanisms can be extended when circumstances demand it. Legislation introduced during the energy crisis created arrangements for existing low-carbon generators.

Rosebank and Jackdaw have become symbols in a much bigger political fight, but symbols don’t keep the lights on or pay the bills.

If these fields proceed, the government has a choice. Allow another round of North Sea production on the same old terms, leaving households exposed to global markets while producers take the upside. Or rewrite the rules.

Use CfDs. Give producers certainty, give consumers protection and manage the North Sea down while we build the green energy system that replaces it.

The fossil fuel age is ending. The trick is to make sure the way we leave it behind works for all of us…:)