Chamber report pushes North Sea to centre of General Election campaign


THE FUTURE of the North Sea is front and centre of the General Election campaign this morning amid concerns the next UK Government has just 100 days to save 100,000 oil and gas jobs.

The 39th Energy Transition report – which is produced by Aberdeen & Grampian Chamber of Commerce (AGCC), in partnership with KPMG and ETZ Ltd – warned that up to £30billion of investment could be lost under plans to remove investment allowances and ban future exploration.

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The story led the BBC’s Good Morning Scotland show this morning, where the findings were put to the leaders of the UK’s four major political parties in set piece interviews.

Speaking to Radio Scotland, AGCC Policy Director Ryan Crighton warned there is a direct correlation between investment and jobs, and that “if we see a flight of capital, then job losses will follow”.

“We have been surveying energy companies and supply chain companies for 20 years now and the latest edition of this report shows that industry confidence in the UK is at an all-time low,” he added.

“It’s lower than in the pandemic, when oil slipped to $16 a barrel, and lower even than the 2008 financial crash which crippled demand. The difference this time is the damage is entirely self-inflicted. For nearly three years our energy sector and transition has been hindered by poor policy decisions.

“The SNP/Green’s presumption against oil and gas harmed confidence, the Conservative’s twice extended windfall tax has diverted resource away from our energy transition, and we have a front runner in this election which wants to make things even worse by removing investment allowances and banning future exploration.

“As a result, companies are now stalling investment, waiting to see what the outcome of the election and the policies which emerge when the heat dies down. If they don’t like what they see, then they will take their capital elsewhere.”

Labour response

North-east Labour MSP Michael Marra acknowledged the concerns of industry, but said his party was committed to increasing jobs in the sector.

He said: “We do know there is concern across the industry – and it is a massive industry not just for the North-east, but for the whole of Scotland and the UK.

“We have been absolutely clear that there will be no cliff edge and we have set out plans for tens of thousands more jobs across the energy sector through the transition.

“We will create 53,000 new clean energy jobs in Scotland – 69,000 when you take into account the retrofitting programme we have put in place. All of that is fully-costed, partly funded by the windfall tax.”

SNP response

Stephen Flynn, the SNP’s leader at Westminster, later accused Mr Marra of trying to “pull the wool over people’s eyes”.

“Labour has walked away from their £28billion commitment to net zero, which they told us would create 50,000 jobs – now they say they are only going to spend £5billion, but somehow create 69,000 jobs.

“They are trying to pull the wool over the people of Scotland’s eyes and say they will create jobs, when the reality is – as outlined by industry experts – that their plans would put 100,000 jobs at risk. If the public are not outraged by that, then they are not paying attention.”

Mr Flynn also suggested he wants the ‘presumption against’ oil and gas removed from the Scottish Government’s energy strategy when it is published this summer.

“I am very much looking forward to the energy strategy being published in its final form. We all need to recognise the importance of the oil and gas sector to Scotland’s economy, and that those 100,000 individuals that we are talking about are absolutely crucial in our journey to net zero.”

Conservative response

Scottish Conservative leader Douglas Ross backed future North Sea exploration and made the case for increasing domestic production over imports.

“It is an excellent report by Aberdeen & Grampian Chamber of Commerce,” he said.

“The North Sea Transition Authority has said that there is still demand for gas from the North Sea, and domestically produced natural gas is almost four-times cleaner than importing it.

“The policies of the Labour Party and the SNP would see us importing more oil and gas from foreign countries at a higher cost and a greater carbon footprint, turning their back on the hard working skilled workers of the North Sea.

“If we go down the route proposed by Labour and the SNP, we will lose skilled workers to other parts of the world, where there is still exploration, and we wont have their skills to take us to net zero.”

Liberal Democrat response

Liberal Democrat Alistair Carmichael said the Chamber’s report “has to be taken seriously” and urged the Scottish and UK governments to work together on a cohesive energy strategy.

“The Chamber of Commerce is absolutely right about the need for this overarching strategy here – something which looks at the whole energy picture. The danger is we just pick a fight and set renewables up against oil and gas. It’s not like that in the real world,” he said.

“We need to find a way of looking at energy as a whole. That is where the two governments working together can really make a difference. But until then, there is a balancing act which involves all sorts of considerations about climate change, human rights and energy security. There’s no sexy big headline in that, but it is the reality of what we need to do here.”

He added: “We have to be sensible and pragmatic about future licenses. We need to understand that for the moment oil and gas is an important part of our economic profile in Scotland. It is in decline, but there are still opportunities there.

“It’s important to remember that if we are not producing oil and gas from our own continental shelf, then we are buying it from Vladimir Putin or Saudi Arabia, and I don’t think that is something people want to see in this country.”

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