BUSINESS leaders across the UK have joined forces to warn UK and Scottish politicians against creating a hostile investment environment in the energy sector.
In a joint open letter to political party leaders, Aberdeen & Grampian Chamber of Commerce, supported by The British Chambers of Commerce and Scottish Chambers of Commerce has called for a “more reasoned debate” around the future role of oil and gas in Britain’s energy mix.
The intervention follows remarks calling for an end to oil and gas exploration in the North Sea, which threatens future investment.
The letter says: “Statements calling for an end to new exploration and production have shaken investor confidence and placed tens of thousands of jobs – together with the economic wellbeing of whole communities across the UK – at risk.
“They also threaten the very basis of a fair and inclusive transition at the most crucial point in our collective journey to a net-zero society.
“A transition, by definition, is a change of state over time. This is one of the most complex challenges we have faced in our history and it doesn’t lend itself to a simple, ‘Who’s good, who’s bad? Who’s green, who’s not?’ approach. To characterise it in this way is overly simplistic.
“We must now pause and allow for a reasoned debate about our energy future to take place. At the same time, we urge politicians to reflect carefully on their public statements on oil and gas and the impact they have on investment in the industry. We must not create an adverse policy environment at this crucial moment in our energy transition journey.”
The letter, which is also been signed by 58 leading figures from business and civic life in Aberdeen, highlights energy security concerns and the additional carbon footprint that importing more energy from abroad would bring.
It adds: “By 2050, the International Energy Agency projects that global oil and gas demand will fall by 80%, but even then 20million barrels per day will be required to meet our needs.
“Therefore, there is no current future scenario where there is not a requirement for some oil and gas. Meantime, it continues to be required for people to travel, heat and power their homes and for the manufacture of many everyday goods.
“This leaves us with two options; to produce this domestically, with full control over the regulatory environment in which it is extracted; or to import an increasing amount of our energy, with the heavier carbon toll that shipping it from other parts of the world carries. The latter makes little economic sense, and even less environmental sense.”
Russell Borthwick, Chief Executive of Aberdeen & Grampian Chamber of Commerce, said: “This is a large cross-section of British business – companies and groups which collectively employ more than six million people – speaking as one to send a clear message to our political leaders that it is time for an honest and frank debate about the role that oil and gas plays, and will continue to play, in our society.
“We have a shared interest in getting to net zero as quickly as possible, but over recent months our region has been portrayed as part of the problem rather than part of the solution. The reality is that the skills, people, and experience embedded in the north-east of Scotland have quietly been leading the way in moving the UK towards its net-zero targets, without any intervention from COP26.
“This is a region bold about the pioneering role it will play in developing the technologies which will light our path to net zero. However, turning the North Sea into a hostile investment environment today does nothing to support that transition. In fact, it does the opposite, driving investment and tens of thousands of jobs away to other regions of the world.
“To meet out ambitious targets, we must harness the expertise, knowledge, financial capital and infrastructure of our world-class oil and gas industry and supply chain. Doing so will allow us to move to net zero through developing carbon capture utilisation and storage, offshore wind and hydrogen technologies powered by UK businesses.
“The energy-transition opportunity for Aberdeen could in fact be bigger than the oil and gas industry – but to get there, we need strong leaders, ones who are willing to cut through the noise, see the big picture and get our transition steps in the right order to protect jobs, provide retraining opportunities and create new ones.”
In his response to the letter, Sir Ian Wood, Chairman of ETZ Ltd, said: “It is very encouraging to see so many businesses supporting the oil and gas industry which reflects its huge contribution to meeting the UK’s energy requirements, boosting economic productivity and sustaining jobs over the last 50 years.
“It has been very clear for some time we cannot put ourselves in the position of reducing domestic production only to increase carbon heavy imports from overseas. This would be entirely counter productive, both environmentally and economically. The conversion of gas to hydrogen driven by offshore wind and the huge carbon capture and storage availability will ensure we can get to net zero by 2045.
“Additionally the skills, experience and infrastructure of a world class oil and gas industry will play a crucial role in accelerating energy transition. We must support oil and gas in meeting this ambition and it is essential that the Scottish and UK Governments do too.”
