Dismay in North-east as Scottish Government ditches oil and gas

11/01/2023

THE Scottish Government’s newly-published energy strategy has been branded a “breathtaking betrayal” of the oil and gas sector.

Chief executive of Aberdeen and Grampian Chamber of Commerce, Russell Borthwick, said the Scottish Government’s presumption against new North Sea oil and gas exploration has been met with “complete disbelief” in the region.

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Cabinet secretary for net zero, energy and transport, Michael Matheson, presented the Scottish Government’s latest energy plan in Holyrood yesterday.

Its overarching aim is to set a course for Scotland’s energy transition, setting out how government intends to ensure a just transition from oil and gas to renewables.

Addressing the Scottish Parliament on Tuesday, Mr Matheson said “unlimited extraction of fossil fuels is not consistent” with efforts to decarbonise, reinforcing that ‘maximum economic recovery’ is no longer government policy.

The published strategy document declares “there should be a presumption against new exploration for oil and gas” in the North Sea.

It also takes aim at the UK Government’s climate compatibility checkpoint – a new feature that applies to the ongoing licensing round – describing the criteria as “not rigorous enough” and calling for them to be strengthened.

Responding to the strategy, Mr Borthwick said: “This move towards a presumption against exploration for North Sea oil and gas has been met with compete disbelief in the North-east of Scotland.

“While the Scottish Government’s position is largely symbolic, as these matters are reserved to the Westminster parliament, this is still a breathtaking betrayal of one of Scotland’s biggest industries.

“We welcome the strategy’s backing for the Acorn Project and its ambition to increase investment in lower carbon technologies, including hydrogen. However, the energy transition is going to take 25 years or more and there is quite clearly a sustained period of time where oil and gas will remain a crucial part of our energy mix.

“So, we have two options; to produce more 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.

“The position set-out today suggests a fundamental misunderstanding of the energy transition, and the requirement for oil and gas to fuel it. Drilling and production are still very much needed in the short, medium, and long term to bridge, and in many cases, fund, the transition.

“Furthermore, it suggests that ministers have learned nothing from the energy crisis of 2022 – a crisis which has been exacerbated by our reliance on energy imports due, in part, to a lack of new North Sea exploration and production over the last decade.

“There is an acceptance in the public at large that leaving Scotland’s oil in the ground while importing increasing amounts of it from other parts of the world is environmentally illiterate. The Scottish Government needs to reflect upon this and reverse this damaging, job-destroying position before it is too late.”

Sir Ian Wood, the billionaire businessman who is the chairman of ETZ in Aberdeen, confirmed his organisation would be making “strong representations” to Sturgeon’s government about how damaging her stance will be to the economy and energy security. 

He said: “It is absolutely clear that it makes no sense to prematurely reduce our domestic oil and gas production only to increase carbon-heavy imports from overseas.

Offshore Energies UK (OEUK) welcomed proposals to create a “hydrogen economy” in Scotland.

The organisation said it “strongly” supports plans to develop the Acorn Project, a carbon capture storage and production facility at St Fergus in Aberdeenshire. However, the organisation expressed concerns about plans to wind down oil and gas production.

What’s in the plan?

The draft ‘Energy Strategy and Just Transition Plan’ sets out a plan for Scotland’s renewables revolution to be accelerated as North Sea basin resources decline.

This, according to the Scottish Government, would result in a net jobs gain across the energy production sector, with the potential to increase renewable energy exports and reduce exposure to future global energy market fluctuations.

Key policy proposals published for consultation include:

  • substantially increasing the current level of 13.4 Gigawatts (GW) of renewable electricity generation capacity, with an additional 20 GW by 2030, which could produce the equivalent of nearly 50% of current demand
  • an ambition for 5 GW of renewable and low-carbon hydrogen power by 2030, and 25 GW by 2045
  • increasing contributions of solar, hydro power and marine energy to the energy mix
  • generation of surplus electricity enabling export of electricity and renewable hydrogen to support decarbonisation across Europe
  • accelerated decarbonisation of domestic industry, transport and heat in buildings
  • increasing access to affordable energy by urging the UK Government to take stronger, more targeted action for fair energy market reform
  • maximising household, business and community benefit from energy projects, including through shared ownership of renewables

Published as part of the draft Energy Strategy is a Just Transition Plan for the energy sector. 

This details the support being provided to grow Scotland’s highly skilled energy workforce, increase jobs in energy generation and the supply chain, while enabling communities and businesses, particularly in the North East, to prosper.

You can read the full strategy document here.

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