{"id":2083,"date":"2026-10-21T10:51:51","date_gmt":"2026-10-21T10:51:51","guid":{"rendered":"https:\/\/redzine.co.uk\/index.php\/2026\/10\/21\/jackdaw-approval-what-a-new-north-sea-gasfield-means-for-uk-energy-security-bills-and-tax\/"},"modified":"2026-10-21T10:51:51","modified_gmt":"2026-10-21T10:51:51","slug":"jackdaw-approval-what-a-new-north-sea-gasfield-means-for-uk-energy-security-bills-and-tax","status":"publish","type":"post","link":"https:\/\/redzine.co.uk\/index.php\/2026\/10\/21\/jackdaw-approval-what-a-new-north-sea-gasfield-means-for-uk-energy-security-bills-and-tax\/","title":{"rendered":"Jackdaw approval: what a new North Sea gasfield means for UK energy security, bills and tax"},"content":{"rendered":"
<\/span> Stock1987\/Shutterstock<\/a><\/span><\/figcaption><\/figure>\n

The UK government has just approved the Jackdaw gasfield in the North Sea, clearing the way for production to begin as early as this winter. <\/p>\n

Jackdaw, around 150 miles east of Aberdeen, could account for roughly 6.5% of UK North Sea<\/a> gas production<\/a> at its peak and will connect to existing infrastructure at the Shearwater platform.<\/p>\n

But what will this actually mean for households and public finances? Will Jackdaw<\/a> lower energy bills? Probably not by any noticeable amount.<\/p>\n

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\n Read more:
\n Granting a new gasfield licence does not guarantee energy security<\/a>
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Producing more British gas may sound as though it should lower prices. But North Sea gas is not reserved for British consumers at a special domestic price. It is sold into a market connected to Europe and influenced by international gas prices.
\nThis was clear following Russia\u2019s invasion of Ukraine. Britain continued producing gas domestically, yet consumers were still exposed to soaring international wholesale prices<\/a>.<\/p>\n

According to one analysis, even if Britain maximised North Sea production and returned all resulting government revenues to households, the average annual saving would be no more than \u00a382<\/a>. Jackdaw is one field, so its effect would be small.<\/p>\n

Will this new gas field licence improve energy security? Here the case is stronger.<\/p>\n

Britain consumes more gas than it produces and increasingly depends on imports<\/a> as older North Sea fields decline. Jackdaw will not make Britain energy independent, but additional domestic production can reduce imports.<\/p>\n

There is an important distinction between security of supply and protection from high prices. Jackdaw can contribute to the first, but not the second while consumers remain exposed to international gas prices.<\/p>\n

In terms of how much tax Jackdaw will generate, North Sea taxes are currently charged on profits, not total sales. Investment reliefs<\/a> (tax breaks that allow companies to deduct certain investment costs) can reduce those taxable profits. <\/p>\n

Companies can generally deduct day-to-day operating costs when calculating taxable profits. They can also claim tax relief for certain development costs, investments to reduce emissions and, eventually, the costs of dismantling the field.<\/p>\n

For Jackdaw, development investment will be in the region of \u00a32.1 billion<\/a> according to Adura, the UK North Sea\u2019s largest independent oil and gas producer. Yet using the developer\u2019s production forecast<\/a> which estimates of how much gas and other products Jackdaw will produce each year, and the UK government\u2019s Office for Budget Responsibility\u2019s March 2026 oil and gas price assumptions<\/a>, we estimate Jackdaw would generate only around \u00a31.5 billion to \u00a31.6 billion in gross sales by the end of 2029. Around \u00a31 billion would come from gas, with the remainder from condensate and natural gas liquids (these are the liquid products extracted alongside natural gas that are sold separately).<\/p>\n

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\n A new gasfield won\u2019t guarantee cheaper energy prices.<\/span>
\n Kub The Shadow Simple Man\/Shutterstock<\/a><\/span>
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Based on this simple comparison, gross sales through 2029 would still be below the project\u2019s implied development investment, even before operating costs are taken into account.<\/p>\n

This does not mean Jackdaw will pay no tax. Public information does not reveal how much investment qualifies for tax relief, when allowances will be used or how Jackdaw fits into the operator\u2019s wider North Sea tax position. Adura estimates that Jackdaw and the much larger Rosebank project together could generate around \u00a31.4 billion<\/a> in tax by mid-2029 but does not say how much of that would come from Jackdaw.<\/p>\n

There is another complication. The energy profits levy (a temporary 38% tax on oil and gas profits) is due to end by March 2030. It will be replaced by the oil and gas revenue levy, a new tax that would apply when oil and gas prices rise above specified levels. Unlike the current windfall tax, this would charge 35% on revenues above specified price thresholds, regardless of a field\u2019s costs. My research<\/a> suggests the same revenue threshold can affect high- and low-cost fields very differently.<\/p>\n

What Jackdaw really changes<\/h2>\n

Jackdaw will not give Britain cheap gas or make the country energy independent. Its significance is more limited: it can replace some imported gas and support economic activity, but Britain will remain exposed to international gas prices.<\/p>\n

The financial picture is similarly complicated. A 78% headline tax rate<\/a> does not mean 78% of Jackdaw\u2019s revenues will reach the Treasury. Investment reliefs can reduce tax in a field\u2019s early years, while jobs and supply-chain activity generate other tax revenues and eventual decommissioning costs can also qualify for tax relief.<\/p>\n

These benefits must be weighed against the emissions and environmental costs of further fossil-fuel production, and against investing instead in renewables, storage and other ways of reducing dependence on gas.<\/p>\n

By producing a little more of its own gas, Britain can marginally improve its security of energy supply, but this won\u2019t lower prices or guarantee an immediate tax windfall.<\/p>\n

\"The<\/p>\n

The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.<\/span><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Stock1987\/Shutterstock The UK government has just approved the Jackdaw gasfield in the North Sea, clearing the way for production to begin as early as this winter. Jackdaw, around 150 miles east of Aberdeen, could account for roughly 6.5% of UK North Sea gas production at its peak and will connect to existing infrastructure at the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2083","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/2083","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/comments?post=2083"}],"version-history":[{"count":0,"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/2083\/revisions"}],"wp:attachment":[{"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/media?parent=2083"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/categories?post=2083"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/redzine.co.uk\/index.php\/wp-json\/wp\/v2\/tags?post=2083"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}