AS the Scottish Government is set to unveil its updated Energy Strategy and Just Transition Plan in the near future, leaders from businesses in the North-east are urging for the language around a “presumption against” new oil and gas to be scrapped.
This strategy was first introduced in January 2023 and has undergone extensive consultation and strong feedback from the industry and various stakeholders.
Subscribe to our daily newsletter
Why? Free to subscribe, no paywall, daily business news digest.
Although the policy regarding oil and gas is primarily handled by the UK government, the energy sector has been critical of the approach taken by Nicola Sturgeon’s administration when the strategy was first presented – which led to a loss of confidence and deterred investment in the UK Continental Shelf.
The Scottish Government, now under new leadership, has suggested a more practical stance that would support the exploration of new areas for oil and gas if certain environmental and energy security criteria are satisfied.
Aberdeen & Grampian Chamber of Commerce, which represents numerous energy and supply chain companies and around 100,000 individuals employed in the North-east economy, has highlighted the closure of the Grangemouth refinery and a recent report from analysts Wood Mackenzie as reasons for the Scottish Government to pay close attention to these issues.
Grangemouth is scheduled to shut down in 2025, as the cost of extracting oil from the North Sea becomes unprofitable – leaving Scotland without essential refining facilities and a strategic economic resource at a time when global energy security is a major concern.
A new report byWood Mackenzie, released on Thursday, presents a grim outlook on the consequences of the new UK Labour government’s plans to expand and increase the Energy Profits Levy – warning that the industry could be ‘fatally wounded’ if the government does not adjust its approach.
Commenting, Aberdeen & Grampian Chamber of Commerce Chief Executive Russell Borthwick said: “While industry makes the case for a commonsense fiscal approach to restore confidence in the North Sea, the Scottish Government also has a major part to play.
“Although the main levers over energy sit with Westminster, the tone set by Holyrood matters to investors.
“There is no doubt that the wrong-headed ‘presumption against’ new oil and gas contained in the draft version of Scotland’s Energy Strategy only served to create more uncertainty while windfall taxes cut the sector off at its knees.
“A Scottish Government under new leadership has a real opportunity in the coming days as it publishes its revised strategy – to back our energy sector to the hilt, to show the world Scotland’s door is open to investment and to protect jobs through the energy transition.
“This week’s news about Grangemouth should focus minds at Holyrood. The loss of those jobs, while significant, is just a tiny fraction of what’s to come if governments across the UK don’t change course in relation to oil and gas.
“Our message is clear: ditch the presumption against new oil and gas, follow Norway’s lead on energy security and economic stability, and unlock Scotland’s huge potential.”
