Aviation: Half price oil, cheaper tickets - report sees flaws in case for third Heathrow runway

The following correction was printed in the Guardian's Corrections and clarifications column, Friday July 25 2008

The sub-heading to this story was wrong to suggest that there was a call for an independent study after BAA was accused of an "economic sleight of hand". As the article made clear, that criticism, made by Friends of the Earth's aviation campaigner, was directed at the government. The SEI report, commissioned by Friends of the Earth, challenges the government's economic arguments for airport expansion and recommends that the case for a third runway be re-examined by disinterested researchers. This error has been corrected.

The economic case for expanding Heathrow is flawed because the argument for building a third runway at Britain's largest airport relies on optimistic assumptions including a low oil price and escalating passenger demand for flights, a new report argues.

The government consultation on a third runway ignores the potential impact of new railway lines on passenger demand, presumes that air fares will continue to fall and is based on questionable forecasts that oil will cost $53 a barrel in 2030 - less than half the current price - said the Stockholm Environment Institute.

The SEI, which has worked for the British government and the Intergovernmental Panel on Climate Change, said the case for a third runway should be re-examined by "disinterested researchers" who are not for or against. "Considering the size of the project and the irreversibility of its consequences, a full and accurate accounting of impacts is essential before any decision-making process can go forward," said the report by SEI's US centre.

The Heathrow consultation has been attacked as biased by local residents, environmentalists and opposition politicians, who have also raised concerns about the close cooperation between the government and BAA, Heathrow's owner, during the process.

BAA batted back claims about impartiality yesterday, noting that the report was commissioned by Friends of the Earth, a leading light in the anti-runway lobby. "This is not a serious or impartial piece of academic research," said BAA. "It is a report which completely misunderstands or misrepresents the economic value of Heathrow airport and the way it operates."