LONDON - A UK High Court on Tuesday threw out a case brought by climate activists against the country's oil and gas regulator OGA, rejecting their argument that the OGA's actions amount to a type of unlawful subsidy of the fossil fuel sector.
The ruling, seen by , is a setback for climate activists who are increasingly taking to the courts to force a reduction in oil and gas production in order to control global warming.
In the case, activists including a former oil refinery worker targeted the OGA's assessment of applications for oil and gas field developments on a pre-tax basis, noting in some years if oil and gas prices were low the government actually returned money to producers rather than benefiting from tax receipts.
This, they argue, is in conflict with both the government's long-standing policy of "maximising economic recovery" of oil and gas in the British North Sea, meaning that oil and gas extraction there should make commercial sense, and with Britain's 2050 net zero emissions goal.
"I reject the contention that the strategy is unlawful because the definition of 'economically recoverable' was irrational. It follows that the claimants' claim fails and is dismissed," Judge Sara Cockerill said in the ruling document.
Britain's treasury received around 248 million pounds from oil and gas production in 2020/21, a drop of 71% on the previous year, according to official data, due to a plunge in oil and gas prices during the pandemic.
The Paid to Pollute campaigners highlight tax years such as 2016/17 when an oil price slump meant the government returned 400 million pounds to oil producers, rather than benefiting from any net receipts.
"We welcome the judgment. We remain firmly focused on regulating and influencing the oil, gas and carbon storage industries to both secure energy supply and support the transition to net zero," an OGA spokesman said in a statement.
OGA lawyer Kate Gallafent had told the court in December the benefits of oil and gas extractions were "a lot wider" than tax revenues, pointing to energy security and jobs.
The climate campaigners had no immediate comment on the ruling.
(Reporting by Shadia Nasralla; Editing by Alexandra Hudson)