June 20, 2023 | S&P Global Commodity Insights | 2 minute read

In a June 20 briefing, Bracewell’s Robert Meade and John Gilbert discussed with S&P Global Commodity Insights how a UK judicial review into oil drilling by UK Oil & Gas (UKOG) in Surrey could have wider significance for the country’s fossil fuel extraction plans, as well as the general rise in litigation relating to corporate net zero commitments.

On June 21-22 the Supreme Court is to consider whether it was unlawful for Surrey County Council not to require UKOG to provide an assessment of downstream (scope 3) greenhouse gas emissions from products resulting from the developer’s approved plans to drill four new oil wells at Horse Hill, Surrey.

“It could be a really important decision because it’s the first time the Supreme Court will look at this issue and it comes ahead of separate judicial reviews in respect of the government’s 33rd oil and gas licensing round and its approval of West Cumbria Mining’s coal mine,” explained Meade.

A successful challenge over Horse Hill could also encourage challenges to be brought in respect of future approvals of other fossil fuel production and storage projects, Meade said.

In addition to the Supreme Court review of UKOG drilling activities, Gilbert noted the general rise in litigation relating to corporate net zero commitments.

In May this year the High Court of England refused permission for Client Earth’s lawsuit against Shell’s net zero strategy to proceed, saying its evidence did not support a prima facie case “that there is a universally accepted methodology as to the means by which Shell might be able to achieve the targeted reduction referred to in the ETS [Shell’s energy transition strategy]”.

“It is possible that, with different evidence, the court could have reached a different decision. But that seems unlikely at this stage,” Gilbert said.

While the prospect for bringing derivative actions in the UK seemed limited for now, this could change over time “if greater consensus emerges over committing to science-based targets and the methodology for achieving them,” added Gilbert.