Speculation that Energy Secretary Ed Miliband will approve the controversial Jackdaw oil and gas field is “unfounded”, the minister’s department said.
The Times reported that Mr Miliband, the key proponent of Labour’s net zero plans, is set to give the project the green light.
Jackdaw was previously approved under the Conservatives, before being put on ice when a court appeal forced a new environmental assessment.
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Labour was elected on a manifesto that promised not to approve new oil and gas licences.
However, the government considers this not to apply to Jackdaw due to the prior consent, leaving the door open for Jackdaw to be approved.
Mr Miliband’s efforts to sprint towards green energy have faced new challenges following the outbreak of war in the Middle East, and rising energy prices.
Chancellor Rachel Reeves said earlier this week she was “very happy” to back Jackdaw, and the linked Rosebank project.
Both are located in the North Sea, with Jackdaw – off Aberdeen – mainly containing gas, and Rosebank – near the Shetland Islands – having both gas and oil.
In Labour’s 2024 manifesto, Sir Keir Starmer promise his government would “not issue new licences to explore new fields”.
A government source pointed Sky News to the fact nothing was said about previously granted consents in the policy platform.
Another said it was noted that Mr Miliband’s decision will be made in a quasi-judicial fashion, based on the law, rather than government or Labour Party policy.
In opposition, Mr Miliband branded Rosebank a “colossal waste of taxpayer money and climate vandalism”.
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And a war of words erupted on social media between Labour backbenchers – including a recently departed minister calling for more drilling.
Josh Simons said Ms Reeves’ backing of more drilling was “excellent news”.
However, Labour colleague Uma Kumaran replied “disagree”, stating “the climate crisis is very real, as is the energy crisis. We can’t keep going back to oil and gas.”
She said the war showed the UK was too reliant on fossil fuels, with Green Party leader Zack Polanski also criticised Mr Simons.
The ex-minister said he was not convinced that new drilling wouldn’t lower bills, bring energy independence or protect the UK from price shocks.
Instead, his argument was that it would create jobs, provide tax revenue and reduce global carbon emissions by reducing the amount of imported fuel.
“Yes, double down on renewables, insulate homes, lower bills. AND green light those two fields,” Mr Simons said.
Approval of the field would see Labour adopting a position shared by the Conservatives and Reform UK, who want more drilling.
The SNP has recently changed its position to back drilling too, having previously called for a ban on new projects.
One of the leading private sector figures involved in the Jackdaw project said it could start pumping fuel in time for next winter.
Neil McCulloch, the chief executive of Adura, added that his company is ready to start providing energy from Jackdaw by this October, if they get a decision by the expected deadline around August.
“We do not recognise this unfounded speculation,” a Department for Energy Security and Net Zero spokesperson said.
“We cannot comment on live planning decisions, and these decisions will be made in an appropriate and timely manner, after the last government’s plans were found to be unlawful.”
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The rise in energy prices has led to many to call for more government action.
Lord Richard Walker, the executive chairman of Iceland and Sir Keir Starmer’s cost of living tsar, suggested the 5p cut on fuel duty should be extended past September, or even expanded.
