An economic and policy case for development of the controversial Cambo field in the UK Continental Shelf

Abstract

A raging debate currently persists regarding the future political economy of the UK Continental Shelf (UKCS) in relation to the prudence of new field developments in the province. Leading up to the COP26 global summit in November 2021, this debate had sharply centred on the pending application for consent to develop the Cambo field in the West of Shetland region of the province. Opposers of the field have called for a rejection of the application for consent to develop the field, citing the recent IEA and UN IPCC reports urging significant reductions in petroleum developments globally. Proponents of the field however argue that oil and gas remain vital to UK energy security as it transitions to net-zero; an argument that has been bolstered by the dynamics of the energy industry since the commencement of the Russia-Ukraine war and the resulting geopolitical fallouts and supply chain disruptions. This paper examines the commercial viability of the Cambo field to make an economic and policy case for its development. I recommend that owing to its high economic viability and low carbon intensity, the UK Government should consider approving the application for consent to develop the field, contingent on a stringent carbon emissions reduction programme for the field being implemented. This recommendation is consistent with a ‘just’ approach to energy transition, as well as the UK's policy of maximising economic recovery (MER) from the wider UKCS sector.