Jobs in Scotland’s New Economy

– in the Scottish Parliament at on 20 January 2016.

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Photo of John Scott John Scott Conservative

The next item of business is a debate on motion S4M-15356, in the name of Patrick Harvie, on jobs in Scotland’s new economy.

Photo of Patrick Harvie Patrick Harvie Green

I am grateful for the opportunity to bring this debate to the chamber. I am sure that I can speak to my motion with confidence that the Parliament will respond to the debate with rather more seriousness than those in the media who have already, perhaps predictably, chosen to use absurd misquotes in an attempt to misrepresent the Green position on the issue.

Nobody treats job losses in the north-east trivially. It is a serious matter that impacts on communities in that region and on our wider economy. Even those of us who have long argued that we are overreliant on the fossil fuel industries would never argue that the impact of job losses on this scale is trivial. However, simply comparing one headline, “Oil sector ‘has lost 65,000 jobs’”, with another, “Oil and gas production rises for first time in 15 years”, is enough to demonstrate that the mantra of maximum economic extraction is not the same as securing maximum economic benefit for our society, nor does it guarantee the security and safety of jobs in that industry or the wider economy.

Many will recognise the context in which the current situation has arisen. Low oil prices bear a great connection with wider geopolitical factors such as the behaviour of Saudi Arabia and others, as well as the long-term decline in North Sea production, which I hope none of us is any longer in denial about. The notion that the North Sea will get back to the levels of production that it once had is not credible. There is overreliance on fossil fuels throughout our society and our economy, not just for energy but for a wide range of other economic and industrial activities.

However, there are additional aspects to that context that will, in my view, require us to face up to the long-term transition that is required and a necessary move towards embracing the change that that transition will bring about. The first aspect is the carbon bubble, the argument on which is set out in the Intergovernmental Panel on Climate Change’s fifth assessment report, which was the first to include an assessment of the overall carbon budget of the planet. By some estimates, it has to be kept to something like 1,000 billion tonnes of carbon emissions or equivalent to give us a likely chance of achieving the 2°C threshold—that is, not allowing climate change to exceed 2°C above pre-industrial levels.

It was estimated that more than half that budget had already been emitted by 2011, so, according to a variety of interpretations, there is somewhere between 446 billion and 616 billion tonnes left to emit if we want to have the reasonable likelihood of restraining climate change. However, other estimates put the position even more starkly and say that the additional warming factors from the way in which carbon dioxide is emitted mean that there is as little as 270 billion tonnes left in the global budget.

That situation is dramatically at odds with the level of fossil fuel reserves left on the planet. We already know that we have far more fossil fuels than we can afford to burn if we are remotely serious about achieving the likelihood of restraining climate change. That argument does not come only from the IPCC—I hope that the minister is still able to hear me—which is the global intergovernmental body that advises all of us, and it is certainly not an argument that comes only from environmentalists and campaigners. Just a few months ago, Mark Carney, the governor of the Bank of England, made much the same argument. Speaking not to campaigners or activists but to financiers in the City of London, he warned of the financial stability risk that this country faces because of our massive overexposure to the carbon bubble.

The fossil fuel industry is profoundly overvalued because its values are based on the assumption that all its reserves will be turned into economic resources, put on the global market and burned. Mark Carney said that the IPCC’s carbon budget

“amounts to between one-fifth and one-third of the world’s proven reserves of oil, gas and coal.

If that estimate is even approximately correct it would render the vast majority of reserves ‘stranded’” and

“literally unburnable ... which itself alters fossil fuel economics.”

I have put that case to the Scottish Government on a number of occasions, and the previous climate change minister appeared to understand. In October 2013, I asked him about the IPCC report and the growing consensus on the carbon bubble, and he answered:

“I do not have a figure to give Mr Harvie for the percentage of fossil fuels that I would like to see remain under the earth, but I accept the point that, if we were to burn all the fossil fuels in the world, we would be doing untold damage to our environment.”—[Official Report, 1 October 2013; c 23073.]

Sadly, Scotland’s energy minister has repeatedly failed to endorse that basic argument.

All of that came, of course, before the most recent development in this context, which is the Paris agreement. The carbon budget in the IPCC’s fifth assessment report is based on the 2°C target—the idea of keeping climate change to a limit of 2°C above pre-industrial levels. However, the Paris agreement goes further and

“Notes with concern that the estimated aggregate greenhouse gas emission levels in 2025 and 2030 resulting from the intended nationally determined contributions do not fall within least-cost 2 °C scenarios”.

The agreement states that there should be a goal of achieving a global temperature increase of well below 2°C and even a 1.5°C target. That will dramatically shrink even further the global carbon budget and pose a challenge to all fossil fuel-producing countries to recognise that those resources are not a value to the economy but a vulnerability.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Does Mr Harvie accept that carbon capture and storage is a technology that is necessary to achieve the objectives that he describes? Will he join us in condemning the United Kingdom Government’s decision to withdraw support for the Shell and SSE CCS project that we were all looking forward to going ahead at Peterhead and making a contribution to climate change?

Photo of Patrick Harvie Patrick Harvie Green

I have certainly condemned the decision to scrap the funding for the scheme. I have done so in debates when the minister was present. However, I do that in the context of recognising that research on CCS will tell us whether it is something that we can come to rely on in future. At the moment, it is not a technology that will work straight out of the box and it is not something that we can rely on. Even if funding was in place, we would still need to find out whether it could play a role.

There will be those who will pretend that the Greens and others do not care about job losses and the communities that are currently overdependent on fossil fuel industries, but nothing could be farther from the truth. We are the ones setting out the case for Scotland to move away from an agenda that is not only polluting, not only destructive to the environmental life-support system that we all depend on for our survival and not only incompatible with the IPCC’s budget but fundamentally short lived. The word “unsustainable” is not jargon; it means that it cannot last. Because it will not last, we need to be investing in the alternatives that will.

Photo of Chic Brodie Chic Brodie Scottish National Party

Does Mr Harvie accept that, as indicated in the University of Dundee report on climate change, Scotland is leading the way at the top of the European league for emission reductions? Based on 2011 data, emissions in Scotland fell by 29.6 per cent, whereas the European average is 17.1 per cent. What can we do to ensure that that kind of message is being given?

Photo of Patrick Harvie Patrick Harvie Green

A great deal has been done by Scottish ministers and many of us to welcome and congratulate the consensus on the setting of targets. Not enough has been done to reach those targets.

The point that I am making is not about our tailpipe emissions. It is about the carbon that we are digging out of the ground and pumping out from under the sea. Whether that ends up on Scotland’s emissions inventory or someone else’s, if that fossil carbon is taken out of the ground, it will end up in the atmosphere. That is the responsibility that fossil fuel-producing countries will have to acknowledge. I do not believe that any has yet.

We are setting out the case that the changes are not only desirable and inevitable but already upon us. Those countries that deny that reality will fail to realise the positive opportunities that that change brings about. Already, there are those bidding for oil and gas decommissioning jobs in Scotland, and they are up against competition from other countries. If we allow others to develop the global reputation and the skillset to undertake that decommissioning work, we will be left behind in the race to build that alternative industry.

Scotland has been here before. Let us not go there again. Let us not see an economic, industrial change coming down the line and fail to be ready to adapt to it, leaving communities stranded as a result.

Photo of Bruce Crawford Bruce Crawford Scottish National Party

Does Patrick Harvie agree that, if the decommissioning process accelerates too much, there is the potential that we will lose a lot of the skills that are involved in the North Sea and will not be able to re-engage when the oil price recovers and the time comes to exploit the 22 billion barrels that we have left in the North Sea?

Photo of Patrick Harvie Patrick Harvie Green

A recovery in the oil price does nothing to change the fundamental context of the world’s global carbon budget and the world’s overvaluation of the industry. We will still be overreliant on an industry that is overvalued. That is an economic bubble, not just an environmental problem. We all know what happens when economic bubbles burst. How reliant do we want to be on that industry when that moment comes?

I want to mention the Scottish Trades Union Congress’s warning, in its evidence to the Economy, Energy and Tourism Committee’s recent short inquiry into the oil and gas industry. We were told that, even if we took climate change right out of the equation and focused on the change in the economics of the oil industry, we would still have to be looking towards

“the transition happening much earlier than was previously anticipated”.

We were told that

“we have to be planning for the North Sea to have a shorter lifespan than previously thought”.—[Official Report, Economy, Energy and Tourism Committee, 25 November 2015; c 31, 32.]

The question is not whether we share the view that this is a desirable change. The change is upon us and we must be ready, prepared and investing in the alternative.

There is the opportunity for us to get back on track with our own carbon emissions, making up the lost ground of the 10 million extra tonnes of CO2 that we put into the atmosphere when we missed the targets. That is something that I hope we can do despite the reductions in funding in the current Scottish budget for climate change and energy efficiency of 10 per cent and 13 per cent respectively. If we reverse that in the budget, we have the opportunity to get back on track with the climate change agenda.

However, we must also open up the opportunity for transition, look at the opportunity for the new industries that will emerge, not only in energy production—clean, green, renewable energy production—not only in decommissioning but in other sustainable industries, whether that is the retrofit job that has to be done on our built environment and the huge number of jobs that can come out of that agenda or the development of new science. No one can tell me or convince me that Scotland does not have what it takes to put in some of the research effort that the world is going to have to undertake to find alternative chemical feedstocks when these hydrocarbons are no longer available. There will be a period when they will be too valuable to burn, but we are not going to be able to pretend that they will continue to flow for ever.

My argument is that ministers of any political party in this Parliament have been at their best when they have been put under pressure by a Parliament bold enough to push them further, whether that be on the fracking moratorium, which I am sure Mr Ewing was delighted to have to announce, community ownership, climate change or whatever. The Green Party has a strong track record of pushing the Government beyond its own comfort zone, but it is the only political party that is willing to acknowledge that Scotland requires this transition from an overreliance on fossil fuels and which has set out the opportunities for making such a transition beneficial and good for our society and economy and ensuring that it brings us into line with the ecological limits that the planet sets down.

The Deputy Presiding Officer:

You must close, please.

Photo of Patrick Harvie Patrick Harvie Green

With a bolder Parliament, Scotland can make this change—and make it a better change for everyone.

I move,

That the Parliament considers that recent North Sea job losses and dramatic oil price fluctuations demonstrate a compelling reason to plan the transition away from Scotland’s current over-reliance on fossil fuels; notes the STUC’s comments to the Economy, Energy and Tourism Committee that “we have to be planning for the North Sea to have a shorter lifespan than previously thought”; further notes the ambitious goals set out in the Paris climate change agreement and the warning issued by the Governor of the Bank of England that economic reliance on fossil fuels represents a risk to financial stability; believes that the Scottish Government knows that the scale of employment previously supported by North Sea oil and gas extraction cannot be sustained, but that it has failed to produce a plan for transition; recognises that transition can ensure that a managed decline in fossil fuels captures the skills, experience and dynamism of energy workers and can generate many more new jobs in sustainable industries; considers failure to plan such a transition to be reckless, and calls on the Scottish Government to collaborate with workers, trade unions, industry and other governments to build a just transition to a secure sustainable economy for workers of today and the future.

The Deputy Presiding Officer:

We are very tight for time today. I call Fergus Ewing to speak to and move amendment S4M-15356.2. Mr Ewing, you may have 10 minutes or thereby.

Photo of Patrick Harvie Patrick Harvie Green

The minister is quite right to say that there are skills that can be transferred into new industries, but my central question is this: for how long can the two industries operate hand in hand? Will the minister acknowledge the central argument that the world has far more fossil fuel reserves than we can afford to burn and tell us what proportion of them he thinks that it is responsible for a country such as Scotland to extract in the future?

Photo of Fergus Ewing Fergus Ewing Scottish National Party

The member asks several questions. If all of us do not support the work that companies in Scotland do right now in 2016 and for the foreseeable future, we will not see companies go into transition; we will see companies go into administration, because that is what will happen if the Green recipe is adopted.

The low oil price shows no sign of abating. Many people believe that the oil price will remain lower for longer, although most people believe that it will recover in due course. The question is what can be done. I am wholly convinced that political point scoring is not what is wanted. What the people who work in the industry and the people who are facing redundancy want from us—and what is required from us all—is a variety of different support.

First, they want us to support the work that they do in a clear and unqualified way, to value it and to recognise that it is of the highest order.

Secondly, they want us to recognise that the industry faces the primary challenge of reducing costs and increasing efficiency. The industry recognises that—if members ask any company, it will say so. It is necessary to heed and learn from the gains that have been made in the supply chain. Alfred Campbell of the oil and gas industry leadership group, which we co-chair, profoundly believes that the supply chain has an enormous amount to contribute but that it has perhaps not been properly heeded in the past. Progress has been made in cost reduction. The challenge is to make progress without jeopardising safety, which must remain paramount.

Thirdly, at the oil and gas day in London last December, which I attended with the industry, the Oil and Gas Authority and the UK Government, I asked specifically that the workforce be listened to and learned from. Nexen adopted the practice of going out to members of the workforce and asking what they thought could be done to improve matters. It came back with many measures, techniques and changes to working practices, many of which were adopted. They increased wrench time—that is, productive time—in a shift offshore enormously. By listening to the workforce, we can help to improve things together. The Scottish Trades Union Congress’s role is invaluable there.

Fourthly, the Scottish Government must continue to play its part. Last January, the First Minister announced the creation of the energy jobs task force. I could talk in detail about that work, but we are determined to carry on with it and ensure that it is supplemented, where necessary, in every possible way to bring practical benefit to individuals who face redundancy.

Photo of Murdo Fraser Murdo Fraser Conservative

I welcome the opportunity presented to us by the Green and Independent group for a debate on North Sea oil and gas. It is, indeed, a well-timed debate: it was only on Monday that the Economy, Energy and Tourism Committee produced its report “Future prospects for oil and gas in Scotland”.

Patrick Harvie sits on the Economy, Energy and Tourism Committee. To be fair to him, I should highlight that he dissented from four of the recommendations in the committee’s report. I noticed that he was in the press yesterday describing the report as “reckless”. That is rather unfortunate language to use about a report that was supported by all other members and parties on the committee—a report that is, in my view, measured and balanced and which has been warmly welcomed by those in the sector and those whose jobs depend on it.

The timeliness of the debate is probably the kindest thing that I can say about Mr Harvie’s motion, for it is a remarkably downbeat, depressing view of a sector that is still of great importance to the Scottish economy.

The Economy, Energy and Tourism Committee’s overwhelming view was that, with the appropriate support from Governments and enhanced collaboration, a sustainable industry can emerge from the downturn.

Of course, it is not so long since we heard the Green Party banging on about peak oil. Our memories in this chamber do not need to be too long to remember Mr Harvie and his colleagues telling us that oil production was at record high levels, that the oil was going to run out soon, that oil prices were on an endlessly upwards trajectory and that oil would become an increasingly unaffordable commodity. Today, as we look at an oil price of just $28 a barrel, those predictions have as much validity as the prediction that the finances of an independent Scotland would be based on an oil price of a $110 a barrel or more.

Having got that spectacularly wrong, the Green Party has now changed its tune. It is now saying that the decline in oil price means that there must be a transition away from fossil fuels towards a new economy.

Photo of Murdo Fraser Murdo Fraser Conservative

Yes. Mr Harvie can remind us of everything that he said about peak oil, if he wants to.

Photo of Patrick Harvie Patrick Harvie Green

I am sure that Mr Fraser understands the reality of peak oil arguments, which bears no relationship to his words a few moments ago. Will he at least acknowledge that, whether oil prices are high or low, our key argument is that burning all that we have is simply incompatible with our own survival? Will he recognise that the context is one of geology and not geopolitics and economics?

Photo of Murdo Fraser Murdo Fraser Conservative

No, I need to make some progress, if Mr McDonald will forgive me. If he checks the evidence that was given to the Economy, Energy and Tourism Committee, he will see that the issue is covered in it.

Thirdly, there is the question of regulatory changes that are being driven through by the Oil and Gas Authority, which is still a relatively new body and one that is winning industry respect.

All those things are necessary to ensure that we have a viable industry for the foreseeable future. However, they do not change the fact that we have a downturn, which might last several years or more, and that those who have lost their jobs need support to find alternative employment. Here I have some sympathy for the notion of a transition to the new economy.

Our amendment makes specific reference to some of the opportunities that are available. The Beatrice offshore wind farm, a 588MW scheme in the Moray Firth, is expected to commence commercial operations in 2018-19, backed by an early investment deal under the UK Government’s contract for difference programme. That 110-turbine scheme could create up to 5,000 jobs. Along with other Mid Scotland and Fife members in the chamber, I have been backing Burntisland Fabrications as the bidder for the contracts from SSE to install those offshore turbines. BiFab is an important local employer in Fife, which has seen significant contraction recently, and the opportunity from the contract could be of considerable value in securing jobs, and creating new ones, in the local area.

Fergus Ewing rose—

The Deputy Presiding Officer:

Draw to a close, please, Mr Fraser.

Photo of Murdo Fraser Murdo Fraser Conservative

I am sorry that I do not have time for the minister.

It is not just in offshore wind that we have an opportunity for low-carbon energy. The new Hinkley Point C nuclear power station will provide some 20,000 jobs in the construction phase. Three Scottish companies—Doosan Babcock, SPX ClydeUnion Pumps and the Weir Group—are preferred bidders for contracts that are worth more than £1.3 billion. Those contracts could secure thousands of jobs in Scotland that utilise engineering skills—skills that are transferable from the oil and gas industry.

We cannot support the negative, backward-looking Green Party motion today. We are happy to support the Scottish Government’s forward-looking amendment, which argues for a balanced approach to energy provision and continued support for the oil and gas sector in the North Sea. I have pleasure in moving the even more forward-looking amendment in my name.

I move amendment S4M-15356.2.1, to insert at end:

“, and welcomes both the economic opportunities for Scottish businesses and the employment prospects from investment in new low-carbon energy projects, including the Beatrice Offshore Windfarm in the Moray Firth, which could create up to 5,000 new jobs, and the Hinkley Point C nuclear power station in Somerset, where three Scottish companies, Doosan Babcock, SPX ClydeUnion Pumps and the Weir Group, are preferred bidders for contracts worth more than £1.3 billion”.

The Deputy Presiding Officer:

I call Lewis Macdonald to speak to and move amendment S4M-15356.1. If members would confine themselves to six minutes, that would be a huge help.

Photo of Lewis Macdonald Lewis Macdonald Labour

Scotland faces an oil jobs crisis that demands an urgent and concerted response. Getting that response right should be the focus of our debate.

As we have heard, there are those who would abandon future production and rush to decommissioning in the North Sea. That would indeed increase the risk to the livelihoods of thousands of people in oil and gas and far beyond, and it would undermine the Scottish economy as a whole.

There are also those who have claimed that there is no crisis—only a downturn in the economic cycle—and that a modest increase in production means that all is well and that the industry can be sure of a bright future. That is equally misguided.

Neither collapse nor recovery is certain. What is certain is that those who understate the significance of the industry or the severity of the challenge are in danger of making the crisis worse.

The production of oil and gas from the North Sea has rightly been described as one of the most important episodes in our economic history since 1945, and the oil and gas sector is one of the pillars of the modern Scottish economy.

Before the current crisis, oil and gas accounted for 13 per cent of Scottish gross domestic product, business that was won by Scottish oil service companies around the world generated billions of pounds of income to the Scottish economy, and the industry supported, directly or indirectly, well over 200,000 Scottish jobs. Whatever the prospects of North Sea oil, it is not a bonus or an optional extra. It is of critical importance to us all.

Today, the industry is under threat. Thousands of jobs have already gone. In September, the industry’s estimate was that 65,000 jobs had been lost across the UK economy. I am sad to say that the tally of jobs lost continues to rise. In the few days since BP announced 600 job losses in the North Sea, another 500 redundancies have been announced or confirmed by Sparrows Offshore Group, ConocoPhillips, EnerMech and Petrofac. Wood Group has said that it is moving office jobs from Aberdeen to India, and Amec has announced that it will cut the pay of offshore and onshore contractors by 7.5 per cent.

Every job cut or pay cut in the oil and gas sector in and around Aberdeen has a knock-on effect. Every part of the local economy takes a hit, from the travel agents who announced redundancies in the city yesterday to the fast-food vans that sell to workers at the factory gate. The people who are still in jobs are affected, too. It is bad enough for workers onshore when fewer people have to do more work; workers offshore worry about fatigue and stress when they are asked to go from two weeks on the platform to three, and they wonder whether the cost pressures on employers will affect the safe operation of the platform.

The impact on the wider economy reaches far beyond the north-east, from island communities where earnings from working offshore are combined with part-time agriculture to steel plants and engineering firms in west central Scotland that face the threat of closure. This week, the Federation of Small Businesses reported:

“Scottish small business confidence has fallen to its lowest level” in three years, and the gap between Scotland and the rest of the UK is “widening”.

We therefore cannot discuss the oil jobs crisis or a transition to a low-carbon economy as if they were abstract issues. This is about working people who have lost their jobs, communities that are under pressure and businesses that are facing closure. The oil jobs crisis is a reality right now for thousands of people throughout Scotland. Claudia Beamish and others will say more from the Labour benches about how to achieve a just transition to a low-carbon future, but members must recognise that a transition that was driven by crisis and dislocation would be anything but just.

That is all the more reason why the Scottish Government must carry out an urgent and detailed assessment of the impact of the current low oil price on the strength and stability of the Scottish economy, as we call for it to do in our amendment. The setting up of a task force to help workers who are made redundant is welcome, of course, but on its own it is not enough. When one of the pillars of the Scottish economy is trembling, the first thing that Scotland’s devolved Government should do is assess the nature and scale of the risk that we face. Either ministers have not yet done that or they have carried out such an assessment but chosen not to publish the results. Ministers surely have a duty to measure and report on the scale of the challenge, so that their enterprise agencies, local councils and other partners have information on which to act.

Photo of Chic Brodie Chic Brodie Scottish National Party

I think that the member and I share concern about the industry in the short term. Will Mr Macdonald give a view on why production of North Sea oil rose last year?

Photo of Lewis Macdonald Lewis Macdonald Labour

The short and simple answer is that under the immense pressure of the oil price, companies have finally begun to address issues of efficiency that they failed to address in past years.

I hope that the Scottish Government will support the Oil and Gas Authority, as the regulator that is charged with changing the culture of the UK oil and gas industry towards greater co-operation, encouraging it to continue to share risk and to extend the life of key infrastructure offshore, as happened through investment in exploration over the past few months.

Ministers should support the transfer of knowledge, skills and technologies from production to decommissioning and the big new opportunities such as offshore wind, but they should do so in the context of maximising the economic recovery of oil, rather than closing the industry down. They should carry forward the work of planning where jobs in Scotland will come from in future generations, without throwing away the jobs and businesses that we have here today.

I move amendment S4M-15356.1, to leave out from first “considers” to end and insert:

“notes that, while production of oil and gas from the UK Continental Shelf (UKCS) is in long-term decline, the sector remains critical to the success of the Scottish economy, not least in providing the skills, technology and experience required to enable the development of infrastructure for the low-carbon economy of the future; calls on the Scottish Government to undertake an urgent and detailed assessment of the impact of the current low oil price on the strength and stability of the Scottish economy; agrees with the conclusion of the Economy, Energy and Tourism Committee that ‘it is vital for the Scottish economy that Governments, the industry and the trade unions continue to work ever more closely together in order to ensure that the objective of maximising economic recovery of oil and gas from the UKCS is fulfilled’ and calls for further development of the role of the Oil and Gas Authority toward that end; recognises that early action is required to enable Scotland’s energy sector to take future opportunities, including the deployment of offshore wind and marine energy and the decommissioning of offshore oil and gas, and calls on the Scottish Government to develop a coherent economic strategy to support renewable energy, the creation of new low-carbon jobs and the use of low-carbon technology in infrastructure development as part of a just transition toward a new low-carbon economy in the future.”

The Deputy Presiding Officer:

We move to the open debate. There is no time in hand at all, so members have up to six minutes.

Photo of Mark McDonald Mark McDonald Scottish National Party

The debate is of extreme importance to the constituency in Aberdeen that I represent; many of my constituents face an uncertain future as a result of the oil price downturn.

We face the political challenge of addressing the seriousness of the issue while avoiding talking down the industry’s prospects. A number of commentators have said that the industry still has a long-term future, in terms of both exploration and production. The question is how the industry is supported during the current period—it is not a question of casting it adrift. That is the balancing act that we must perform.

I will deal with the issue that Patrick Harvie and the Greens have brought to the chamber today, which is the transition. From listening to what has been said and to some of the previous commentary, it would be easy to assume that support for renewables is not in place, that work is not being done and that leadership is not being shown by the Scottish Government. However, in its briefing for members, Scottish Renewables says:

“Scottish Government leadership and cross-party political support has helped set strong objectives for the renewables sector, led to thousands of jobs and attracted finance from across the globe.”

Patrick Harvie rose—

I will take an intervention from Patrick Harvie in a second.

Scottish Renewables says that renewables are now our largest generator of power. Renewable heat has quadrupled between 2009 and 2014. To me, that demonstrates a strong performance. Indeed, in 2014 renewables overtook nuclear as Scotland’s largest source of electricity. In September 2015, we reached the target of 500MW of community and locally owned renewables. That target was set for 2020, not 2015, so we hit it five years early. There is leadership and support. Work is being done to ensure that the renewables sector can thrive, but there are impediments, to which I will come after I take Patrick Harvie’s intervention.

Photo of Patrick Harvie Patrick Harvie Green

I welcome the progress that has been made on renewable electricity, although there has been much less progress on other forms of renewable energy. However, it is clear that generating more renewable electricity does not cut emissions unless it displaces fossil fuels. If we continue to extract fossil fuels—whether they are used in Scotland or anywhere else—the fossil carbon will end up in the atmosphere.

Photo of Mark McDonald Mark McDonald Scottish National Party

Patrick Harvie and I part ways when he creates the either/or situation that he is trying to create here. We must have appropriate management of our resources, because we will require those hydrocarbons in the near future. We cannot get to the stage that Mr Harvie seeks to get to by switching off support and allowing the industry to decline further.

There are impediments to renewables, and the Scottish Renewables briefing goes into them in some detail. They exist as a result of the energy policy approaches that Westminster is taking, which are making it harder for renewable companies to invest, attract finance and operate. Changes must be made if we want the welcome support for the renewables sector to continue to increase in Scotland.

Support is also required for the oil and gas sector. Murdo Fraser said that support was not in place regarding tax changes. It is quite clear that there is a requirement for tax changes to stimulate and boost exploration activity, which would have two effects. First, it would safeguard jobs, increase activity and allow support to go into the supply chain. Recently I spoke to a supply chain company in the north-east that said that if its rigs were actively exploring they would be worth around £250,000 per rig. Four exploration rigs would equate to £1 million for that company, which is a stark contrast to the zero that it gets while those rigs sit idle. Boosting exploration activity has a direct effect not just on employees and companies that carry out that activity, but further down the supply chain. It would support those who are being affected by the downturn.

The other reason why stimulation of exploration activity is important is because it allows the industry to hit the ground running when price recovers, rather than having to then undertake that activity to reap the yield that comes from it. Exploration tax credits in Norway in the mid-2000s proved to be a significant success and led to substantial discoveries, which meant that, when the oil price recovered in the mid to late-2000s, Norway was able to capitalise on that very early on. I believe that the same opportunities could be realised for the oil and gas industry here were such tax credits to be put in place. Many in the industry, as well as experts and, I believe, the Scottish Government are making that plea. We should unite to make that plea to the chancellor to effect those changes in the budget.

The Deputy Presiding Officer:

I call Lesley Brennan. Members will wish to note that this is her first speech in our Parliament.

Photo of Lesley Brennan Lesley Brennan Labour

I thank you, Presiding Officer, other members from across the parties and parliamentary staff for the warm welcome that I have received since coming here rather unexpectedly. I thank the Green and Independent group for the opportunity to discuss jobs and Scotland’s new economy, especially as my first academic job was in the field of environmental economics at Abertay University in Dundee. I also taught ecological economics during my time at the University of Dundee, so I am really interested in the issue.

Before discussing the topic, I pay tribute to my predecessor, Richard Baker, who worked hard for the people of the north-east and was known across the chamber as a sincere and compassionate person. He was a strong voice and a willing and active participant in the chamber. Those attributes of his will stand Age Scotland in good stead, as he is a really good guy to have back on the team. [Applause.]

At the heart of the motion is the economy. No one would disagree that the Scottish economy is currently weak. The Scottish Government’s latest figure for growth is 0.1 per cent. Research that has been published today by the Resolution Foundation reinforces the point about the fragility in the labour market. If we look ahead, there are few glimmers of hope on the horizon, given the massive cuts to local authority budgets because of the settlement from the Scottish Government and given the devastation in the oil and gas industry.

The sharp contraction in the oil and gas sector is devastating for the thousands of workers in the sector and their families, particularly in Aberdeen and the rest of the north-east. With another hat on, I am a councillor in Dundee, where skilled workers in the oil and gas sector who have been made redundant have become taxi drivers. I know from colleagues in Aberdeen that the same thing is happening there. The difference in income for those people is obviously having a huge impact on them, their families and their communities.

On top of that contraction in the economy, the Convention of Scottish Local Authorities is forecasting 15,000 job losses because of the local government settlement. The full effect of that on local businesses in Scotland should not be underestimated. There is a risk of contagion spreading throughout the Scottish economy, so action is needed now.

The other component of the debate that needs urgent attention is the environment. Our environment is a precious system that is full of linkages and interdependencies, and it cannot be replaced when lost. The scientific evidence on climate change and the role of humans in speeding up changes is overwhelming. The pace of climate change needs to reduce and, where possible, that change must be reversed.

All organisations need to implement changes. We in the Scottish Parliament have a role, as does the Scottish Government, in ensuring that households and private businesses implement changes. It was therefore disappointing to read today that a survey by PricewaterhouseCoopers of 1,400 chief executive officers from around the world suggests that climate change fails to top the list of threats for business leaders at Davos. At least, however, 50 per cent of those CEOs say that climate change is a key threat to their business.

Some businesses can reduce their carbon footprint and their costs, and improve the work-life balance for their employees, by encouraging working from home. I was previously a home worker and I know the benefits that that can bring. That is also about networks; I worked on one project that involved virtual meetings at which I was in Dundee while colleagues were in London, in Baltimore in America and in Santiago in Chile. The carbon footprint would have been massive if we had all met in one location to connect up. That is one of the benefits of diversifying our economy and looking at the knowledge economy.

To go back to thinking about the climate, we need to change our behaviour and be mindful that small changes can have a positive impact, whether that is through reusing, recycling or reducing our consumption. Scotland is making improvements on recycling rates, cutting emissions and making our air cleaner, but the official targets have been repeatedly missed.

I believe that the Labour movement and the environmental movement are natural allies. Our goal is the same: we want a society that is run in our collective interests and in the interests of protecting our planet. There has been a lot of talk about creating a vibrant low-carbon economy that has green enterprise at its heart. Especially now, following the agreement that was secured in Paris, the pace of change needs to increase in order to tackle climate change and grow the economy.

As Lord Stern stated, tackling climate change and growing the economy are not mutually exclusive—they are mutually dependent. I could not agree more. We need to ensure that action to tackle climate change is fully implemented and that it delivers jobs and the skills to do those new jobs. That is why we want to make sure that there is enough capacity in the college sector.

Jobs that are associated with tackling climate change range from those in flood prevention—recently, it has been obvious that we need to make sure that we invest in that—to those in improving the energy efficiency of homes and buildings and those in generating knowledge to improve renewable energy technologies.

New jobs are needed and they need to be delivered to boost our sluggish local and national economies. Mr Salmond promised 700 renewable energy jobs for Dundee following the signing of a memorandum of understanding in December 2011 but, sadly, they never appeared.

The people of Scotland want us to work together to find and implement solutions. I look forward to working with members across the chamber over the next nine weeks to meet those challenges. [Applause.]

Photo of Chic Brodie Chic Brodie Scottish National Party

I congratulate Lesley Brennan on her first contribution; I am sure that there will be many others.

I welcome the debate and I fully appreciate the intent, feelings and principles behind the Green Party’s motion. I have to say that it is a bit reckless, but it takes those who are in a rush to invent a new narrative—time and patience are required to make that credible. The motion sets ultimately laudable aspirations, although it may seem to be devoid of meaningful analytical facts. It is in danger of propelling its aims and objectives to create an immediate fear as it pursues those aspirations, no matter how well meant they may be.

The Government is building a low-carbon economy that is sustainable economically and environmentally. The position is clear—although current times are difficult, the oil industry will recover. I will come to that later.

We are already three quarters of the way towards meeting our carbon emissions targets, and we want over time to develop a structured balance between our obligations on the environment, the economy and jobs, and to the planet. We recognise that an achievable balance of natural resources and fossil fuels is required not just in meeting the needs of the Scottish economy and jobs but in our contribution to the global economy on both those fronts.

Photo of Chic Brodie Chic Brodie Scottish National Party

No. Time is very limited.

I welcome the Paris initiative, because we cannot plan a transition away from Scotland’s reliance on fossil fuels in the short term or in a period of huge global political volatility. Oil, petrochemicals and hydrocarbons are a major ingredient of day-to-day products and therefore involve downstream jobs. Not just transport and domestic or industrial energy but medical equipment, many drugs, domestic and industrial appliances and industries such as retail depend on input from hydrocarbons.

Let us analyse the Greens’ view of the oil industry in Scotland without fear or favour. The motion talks of

“job losses and dramatic oil price fluctuations”.

I accept that these are difficult times for the industry, but let us see what the Economy, Energy and Tourism Committee, of which Mr Harvie is a member, said in its recent short inquiry report on the oil and gas industry. It said:

“Our report is a snapshot in time.”

I will come back to that point. It also said:

“No one can predict with any certainty what the oil price will be 12 months from now”.

We know that, because of overproduction and sluggish demand in this very volatile global economy, there is downward pressure on the oil market. However, we have been here before. The price per barrel is higher today than it was in 2005 or indeed in parts of 2009. Only last week, in its comprehensive oil price outlook report, the International Energy Agency considered all the current and future international and global political and economic scenarios. In its current economic scenario, it said that the price of oil would grow progressively to $150 a barrel by 2040 and, in the low scenario, it said that the price might progressively rise to $95 a barrel by 2040. In addition to that input, during our committee inquiry, the STUC recognised that oil prices will rebound to a level where investment and therefore jobs in the continental shelf will look much more attractive.

It is right, however, to raise the concern in the motion that in the short term the skills base might be undermined, which would lead to constraints when higher investment returns. That has to be part of the overall equation. When the motion says that the STUC commented that

“we have to be planning for the North Sea to have a shorter lifespan than previously thought”,—[Official Report, Economy, Energy and Tourism Committee, 25 November 2015; c 32.]

my riposte is that we have not even considered, as the Oil and Gas Authority said to the committee, oil and gas off the west of Shetland, Rockall, the Atlantic margins and indeed the inner Clyde—and I would say that, wouldn’t I? Currently, the scale of employment is threatened, but I believe that it will recover quite substantially.

Am I too cavalier about oil and gas production? No. Do I dismiss the absolute need to consider all appropriate actions—I repeat, all appropriate actions—to support the Paris objective? No. However, I do ask that we take proper and not unreasonable approaches to seek a balance of resources and our environmental objectives. Within that balance, oil in the North Sea and the west has and will have a significant part to play in the future. As I have mentioned, oil and gas production on the UK continental shelf has increased for the first time in the past year. We want to secure a sustainable environment and economy for the workers of today and the future, but such facts have to be considered in any long-term plan.

Action is being taken. I have no doubt that part of it has been achieved because of pressures from the Greens—I recognise that—on the renewables targets and emissions. There is already a focus on what the Greens seek, but that is part of an inherent strategy—some might say that it is part of an unwritten plan.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

I welcome this debate as an opportunity to highlight the energy sector’s importance to Scotland. It is important that we realise that Scotland has an abundance of energy resources including oil, gas, wind, hydro, wave and tidal, and that that affords us the opportunity to develop a rich and diverse energy mix that is both resilient and secure. The twin Scottish Government objectives of developing a low-carbon economy and ensuring good stewardship of our oil and gas resources are extremely important to our nation’s economic wellbeing.

The oil and gas industry in Scotland has achieved great things in its first half century, and we need to recognise the enormous asset that the industry has been to Scotland and the huge contribution of its workers. However, it is no exaggeration to say that in January 2016 the industry faces the most severe challenges, and what is required from us all in this place, and everyone in any position of power or responsibility, is to respond positively and do everything of practical benefit that we can to help the industry through these difficult times. That applies to the Scottish Government, every MSP, the UK Government, local government, banks, industry, the workforce and trade unions—in other words, to us all.

Just last week, Sir Ian Wood said that we must not panic. There are a huge number of successes that we can point to. Production is, in fact, rising. Projects, contracts and developments are being progressed well—we read of them each day in the Press and Journal and publications such as Scottish Energy News. Many new or newly refurbished fields are coming into production, including BP’s Clair field and its Quad204 and eastern trough area projects; Statoil’s Mariner field; Maersk’s Culzean field; EnQuest’s Kraken field; and many more besides. Merchants of doom peddle false wares.

Equally, we have a unique opportunity in Scotland, where the expertise gained from half a century of exploitation of oil and gas in the waters around our country gives us a particular advantage in the development of renewables technology. Countries such as Norway, Sweden and Denmark show that there is no contradiction between making use of—as in the case of Denmark—substantial gas reserves while leading the transition to a low-carbon economy.

The energy expertise from oil and gas can often help in renewables, as is evidenced by many companies working in Scotland that are involved in both sectors. I believe that a good example is Statoil, which is developing not only the new Mariner field but the world’s largest floating offshore wind development. That is, in my view, very exciting, and it has been enabled by decisions taken by the Scottish Government.

I have just returned from a two-day visit to Caithness, where I visited Scrabster harbour. I heard how its new facilities, which were part funded by Highlands and Islands Enterprise, have served the oil industry with half a million tonnes of goods over the year, as well as serving the renewables industry. Scrabster is well placed to serve west-of-Shetland fields such as the Clair field, the Total fields of Laggan and Tormore, and Premier Oil’s new Solan field, which will come on stream shortly, but it also plays a part in the renewables industry, because it is just along the coast from the MeyGen project, which is going to be the world’s largest commercial tidal array.

I also visited JGC Engineering and Technical Services, which is in Janetstown, just up the road from Scrabster. It is a quality growing engineering company whose work spans oil and gas and renewables. The company has just produced a large number of 200-tonne ballast blocks for the MeyGen project, whose onshore facility I visited on Monday.

The point that I am making is a very simple one: many companies, many ports and harbours and many people are engaged in work in which oil and gas and renewables go hand in hand. Expertise in one area lends itself to gaining success in the other.

I am sorry—I have little time left.

Fifthly, we need to ensure that we defer cessation of production and extend late-life assets fields. I believe that there are some practical measures that the UK Government must take. Principally, it must sort out the lack of clarity on liability for decommissioning costs. The major point that several companies and operators raised with me in my most recent visit to Aberdeen a couple of weeks ago was that that lack of clarity is stalling and preventing deals that would bring new investment to the North Sea.

We must have measures from the UK Government that address and improve the tax deal for the industry; we need more support for exploration; we need the UK Government to look again at tax rates; we need to look at extending the investment allowance to enable late-life fields to continue their work; and we need to continue our good work on decommissioning. We in the Scottish Government, through our economic development agencies, have worked closely with many players, and we have done a great amount of work on decomissioning—I cite as one example the work that is taking place in Lerwick with the partnership between the Lerwick Port Authority and Peterson, which is a major company in the field.

It is in all our interests to have a thriving and successful oil and gas industry that navigates these most severe challenges, just as it is to have a thriving and successful renewables sector. As the energy minister over the past five years, I know that we have made considerable efforts to achieve both objectives; we will certainly continue to do so.

I move amendment S4M-15356.2, to leave out from first “considers” to end and insert:

“recognises the challenges faced by the oil and gas industry; notes that the sector is still a major employer supporting a substantial number of jobs across Scotland; understands that Scotland needs a diverse and balanced energy portfolio to provide secure and affordable heat and electricity for decades to come; notes that Scotland has ambitious renewables and climate change targets and is making good progress toward them; further notes that Scotland’s policies on electricity generation, renewable heat and energy efficiency are progressively reducing use of fossil fuels and will help Scotland in its ambitions to decarbonise electricity generation; believes that a successful oil and gas sector will assist with diversification of Scotland’s energy supplies and that the skills and expertise employed in Scotland’s oil and gas industry will be crucial in the future success of the sector, mobilising low-carbon technologies and maximising the economic benefits from decommissioning, and believes that it is vital that Scotland continues to ensure good stewardship of all of this country’s huge energy resources, with management of offshore resources being complementary with decarbonising the Scottish energy system over the long term.”

Photo of Murdo Fraser Murdo Fraser Conservative

The fundamental problem with Mr Harvie’s argument is that he assumes that the only use to which we put hydrocarbons is to burn them. We put hydrocarbons to many other uses. If he visits the Ineos plant in Grangemouth, he will see that they are used as the raw material in the production of a whole range of products. There is hardly anything that we use in the modern world that does not include some element of hydrocarbons as a source material. Therefore, we have an industry that produces material not just to burn, but to provide essential components in virtually every area of modern life.

Not unlike other members of the Economy, Energy and Tourism Committee, I am well aware of the decline in the sector, with some 65,000 jobs thought to have been lost so far and new job losses being announced almost on a weekly basis. However, we also know that the industry is cyclical in nature. If we look back at changes in the oil price over the past 40 years, we see that prices go up and down. Although none of us can accurately predict the future, we can expect that there will be a recovery sooner or later and that there will be an industry to support in the coming decades. Our role today is to ensure that the industry gets the support that it needs in the interim.

There are three areas where action is required. The first is in driving out cost inefficiencies, on which the industry is already taking action. Undoubtedly the low oil price is a driver in making that happen more quickly than otherwise would be the case.

The second is relates to tax. The industry was very pleased with the changes that were brought in by the chancellor in the budget last year. Although there is always room for more changes to be considered—I know that the chancellor will be considering the issue in the run-up to this year’s budget—the evidence suggests that further tax changes are not high on the list of industry demands at the present time.

Photo of Elaine Smith Elaine Smith Labour

I advise the chamber that we are incredibly tight for time.

Photo of Liam McArthur Liam McArthur Liberal Democrat

I, too, warmly congratulate Lesley Brennan on her maiden speech. Becoming an MSP is difficult enough but, when it comes out of the blue, as it did in this case, it must be all the more difficult. I wish Richard Baker all the best in his new post.

I welcome the opportunity to make a brief contribution and congratulate Patrick Harvie and his colleagues on bringing the debate to the chamber. It is unfortunate, however, that the first debate on oil and gas in almost a year is based on a premise that is unambiguous in calling for an acceleration of the sector’s demise.

Those who work in the sector across Scotland, those who might have recently lost their jobs and the wider public, who realise the continued importance of oil and gas production to our economy, will form their own views on the Green Party’s motion. They will also ask—rightly—why the Scottish Government appears to have been so reluctant for so long to debate the issues that the sector faces. One statement last September is scant reflection of the sector’s importance or of the scale of the challenges that it faces.

Those who face the threat of losing their jobs, and those who have already lost them, need to hear ministers and the Parliament voicing our support for and our confidence in the future of the sector—as members have done this afternoon. Fergus Ewing deserves genuine credit for his efforts, but it seems at times as if he has been ploughing a lonely ministerial furrow.

When the oil price started plummeting, it was striking how long it took the newly installed First Minister to visit Aberdeen to meet industry representatives. That reticence did not go unnoticed, and comparisons were inevitably made with the likely reaction of her predecessor. In the face of what no one now disputes is a crisis facing the oil and gas sector, the First Minister’s failure to meet the head of her energy jobs task force for more than six months is astonishing—all the more so given what has happened to oil prices, jobs and confidence over that period. In his more private moments, I suspect that the Minister for Business, Energy and Tourism agrees.

That is part of a pattern. Just over a year ago, there was a similar reluctance from the Scottish Government to give the Parliament a chance to properly debate the future of the wave energy sector amidst an almost existential crisis. That approach is not good enough. Opposition parties can lodge motions on the subject, but parliamentary time is dominated by the Government.

There is no lack of issues to debate. We need to develop a strategy for how we transition to a low-carbon economy. Oil and gas are finite resources, and I have no difficulty in acknowledging that some of the resource will need to be left in the ground.

I agree with Scottish Renewables that our chances of achieving our goals are not helped by a UK Tory Government that is apparently hell-bent on dismantling much of the good work that was done under the previous coalition Government, including the work on carbon capture readiness. Moreover, I firmly believe that many of the technical and engineering solutions that are being sought by the marine energy sector are to be found in the oil and gas supply chain.

I also firmly believe that Sir Ian Wood is right when he cautions against panic reactions or premature decisions to decommission assets. Whatever our renewables future is—I am still confident that it is bright—oil and gas will remain an integral part of our energy mix for decades to come. Rather than heed the counsel of those who are intent on shutting down the sector forthwith, we need to consider seriously what can be done to support the sector and those who work in it at this difficult time.

The tax regime appears now to be more broadly supportive, and recent investment allowances are viewed positively by those with whom I have spoken in the sector. Questions about removing the supplementary charge, for example, remain, and that should be kept under consideration.

The Energy Bill that is going through Westminster presents an opportunity to invest the Oil and Gas Authority with the powers and resources that it needs to continue making a positive difference. I am sure that Fergus Ewing would agree that my Liberal Democrat colleague and former Secretary of State for Energy and Climate Change, Ed Davey, deserves credit for that.

Fergus Ewing rose—

The Deputy Presiding Officer:

You are in your final minute, Mr McArthur.

Photo of Liam McArthur Liam McArthur Liberal Democrat

Ed Davey’s foresight in paving the way for the OGA by establishing Sir Ian Wood’s review is worthy of acknowledgement. No one could have predicted back then what would happen to oil prices but, without that preparatory work, the situation would be immeasurably worse.

Even before the passing of the Energy Bill, the OGA is having an effect. It is improving the evidence on which Government decisions are based. It has already invested in seismic studies, to the sector’s benefit. If we look ahead, the OGA will help to ensure that companies are not sitting on licences that they are not using.

The Deputy Presiding Officer:

I apologise to Mr McArthur, as that was not the start of his final minute. I have not cut speeches to five minutes yet.

Photo of Liam McArthur Liam McArthur Liberal Democrat


With new sanctions and powers to access company data, the OGA will have scope to challenge individual businesses on performance, which will help to improve the sector’s overall efficiency. Many of the solutions can come only from within the sector. Each business will be examining its cost structures carefully and seriously and seeing where efficiencies can be made. That, of course, absolutely must not come at the expense of safety.

The Deputy Presiding Officer:

You are entering your final minute now.

Photo of Liam McArthur Liam McArthur Liberal Democrat

More joint learning is essential, and the Scottish Government can do more to help with that. With the energy skills task force having been set up, that work needs to move ahead with some urgency. Its conclusions will undoubtedly be helpful in feeding into the coherent economic and energy strategy that Lewis Macdonald’s amendment refers to.

I conclude where I started: the First Minister needs to be more fully and actively engaged. Symbolically, as well as at a practical level, that matters. Oil and gas is a sector that touches most parts of the country in terms of jobs and its contribution to our economy. It is a sector that will remain a key part of our energy mix over the coming decades, and it is a sector whose future—for the foreseeable future—we need to help safeguard, not sabotage.

For those reasons—and notwithstanding the overly self-congratulatory tone on meeting climate change targets—we will support the Government’s amendment at decision time.

The Deputy Presiding Officer:

Speeches of less than six minutes would be helpful.

Photo of Sandra White Sandra White Scottish National Party

First, I apologise for my mobile phone going off earlier. I assure members that it will not happen again.

I congratulate Lesley Brennan on her maiden speech and I look forward to working with her.

I welcome the motion that has been lodged by the Greens and the Independents. It certainly gives us an opportunity to discuss jobs in Scotland’s new economy. However, we have to be realistic—I say this in the best way possible—and accept that those jobs will not materialise overnight. We must ensure that people in the workforce are behind us—we must speak to them and work alongside them. When we plan and implement our concentrated vision for a new, renewable energy system that is fit for the future, we must speak to and meet the workforce of the oil and gas industry in particular, so that we retain the skills that will deliver that system and end our reliance on fossil fuels.

Photo of John Finnie John Finnie Independent

Perhaps the member is thinking about the unwritten plan that Chic Brodie referred to. What timeframe does she consider to be appropriate for the just transition to a low-carbon economy?

Photo of Sandra White Sandra White Scottish National Party

I have not seen the plan that Chic Brodie talked about. Perhaps Mr Finnie could answer the question that he asked me.

As I said, we need to speak to the workforce and ensure that people are trained in the skills that they need to work in renewable energy. Although I do not have a crystal ball and I cannot see into the future, I think that the transition will take place in the not-too-distant future. However, we need to be realistic and ensure that people work together in a sustainable way. We must look to the future, but we must also be realistic.

Many have mentioned the economic argument but, as far as I am concerned, there is also an argument about building a more sustainable future and combating the effects of global warming. I believe that Scotland is making great progress towards that. My colleague Mark McDonald cited many projects that are going ahead. Like him, I think that we have taken positive steps in recognising and combating climate change in recent years.

More needs to be done, but I think that the recent Paris climate change agreement, which the motion mentions, gives us hope for the future. It was a monumental task to get so many nations to sign up to the agreement. I hope that that will be just the start of those efforts. I also hope that Scotland can lead the way in demonstrating what is possible and how to achieve it.

When the First Minister attended the 21st conference of the parties global climate summit in Paris, she spoke at the largest business-focused event of the summit, at which Scotland was praised by the head of the United Nations climate body, Christiana Figueres. The First Minister also spoke to the Climate Group, which Scotland became a member of. The Climate Group’s compact of states and regions is an international reporting platform that represents 12.5 per cent of global gross domestic product and more than 325 million people worldwide. That demonstrates the collective impact that devolved states and regional Governments can have on tackling climate change.

All of that clearly demonstrates the Scottish Government’s ambitions. Although, like others, I believe that more needs to be done, we should welcome those initiatives and build on them, because it is only through those initiatives and through international and collective action that we will move forward together to a sustainable global future.

Also highlighted at the summit was the fact that world records are being broken. Denmark set a new world record for wind energy production in 2013 as 39.1 per cent of its overall electricity came from a clean energy source. Scotland was also mentioned as having had a massive year for renewables. Wind turbines alone in Scotland provided 1,279 megawatt hours of electricity to the national grid. That is enough to fulfil the electrical needs of 164 per cent of Scottish households or 3.96 million homes. We should be proud of that.

The Deputy Presiding Officer:

You are in your final minute.

Photo of Sandra White Sandra White Scottish National Party

An important part of the Scottish Government’s approach that nobody has mentioned so far is its pioneering climate justice approach, which puts people and human rights at the heart of our action on climate change and supports fair and sustainable global development.

I thought that I had more time. I had hoped to look solely at the positives today, because Scotland is a world leader in many new and innovative technologies and we have abundant national resources. However, we are being held back from doing more. I was disappointed that the carbon capture plant proposal was rejected and that funding for renewables has been cut. All that is a strong argument for energy policy to be devolved to Scotland. I hope that we all agree on that and that the Opposition parties will join us in petitioning the UK Government to support the carbon capture plant and the devolution of energy policy. We should be looking at that.

The Deputy Presiding Officer:

I am afraid that we are already over time for the debate, so I ask members who wish to speak later to review their speech notes for timings.

Photo of John Wilson John Wilson Independent

I declare an interest as a member of Unite the union. I also welcome Lesley Brennan to Parliament and look forward to her contributions at committee and in the chamber.

I thank the members who have taken the time to read the motion and discuss the issues that it raises—particularly those about the future of Scotland and the planet. The motion highlights our commitment and need to tackle our growing dependence on fossil fuels. As a country and a planet, we cannot continue to burn fossil fuels at the current rate.

There are two concerns about that. First, climate change and global warming are happening around us. Across the UK, we have recently seen drastic weather and flooding on a massive scale, which has caused incredible and lasting damage to hundreds of homes. Flooding is the greatest threat from climate change that faces the UK. It is a real and present danger and we need only look at the recent weather to see the scale of the damage and disruption that it can cause to people’s lives and livelihoods. I doubt that anyone in the chamber would deny that climate change is real, that it presents a threat to our livelihoods and that we as a nation have a responsibility to tackle it however we can.

Secondly, fossil fuels are finite. They cannot and will not last for ever; that is a simple fact that must be addressed. To not address it and to continue our dependence on fossil fuels is dangerous and irresponsible. Those are important points and I hope that members agree that our consistent use of fossil fuels is harmful to the environment and unsustainable because of the damage that it causes and the fact that fossil fuels will not last.

The motion highlights the need for an immediate transition from work that depends on our dwindling oil and gas to work in renewables and other progressive industries. We have heard today and in the report from the Economy, Energy and Tourism Committee that 6,000 jobs lost from the platforms equate to almost 30,000 jobs lost in communities around Scotland. To quote the First Minister, the North Sea oil industry is “in crisis”. Oil prices have fallen to below $30 a barrel and Petrofac has just announced 100 job losses, alongside BP’s 600.

All those job losses will impact on workers who are employed in the North Sea oil industry and, as Lesley Brennan said, they will have a knock-on effect on the families and communities of those workers. In my region, I have seen the devastation that the closure of steelworks caused to families and communities. The Scottish Government has a responsibility to ensure that such wide-scale job losses and industry closures are handled effectively in the future and that there is a just transition for workers and resources.

At its annual congress, the Scottish Trades Union Congress highlighted its expectation that 35,000 jobs that relate to North Sea oil could be lost over the next five years. The motion calls on the Scottish Government to work with the trade unions on planning and implementing the transition from a society that is fossil-fuel dependent to one that is fossil-fuel free. The STUC further highlighted the need for a just transition, with a framework created by various trade union organisations that highlights the need for and importance of a transition towards a low-carbon, climate-resilient economy that maximises the benefits of climate action while minimising the hardship for workers and their communities.

The role of the trade unions in that transition is vital. We in the Scottish Parliament have a responsibility to listen to those whom we represent, and I do not mean just geographically. When we discuss such transitions and the workforce of the future, we have a responsibility to listen to the workers and the trade unions and to hear their voices. The people who are best placed to discuss what is best for Scottish workers and the Scottish workforce are the workers themselves.

Photo of Mark McDonald Mark McDonald Scottish National Party

Will the member acknowledge the voice of Jake Molloy of the RMT union, who has called for specific measures to support the oil and gas industry, including taxation support from Westminster?

Photo of John Wilson John Wilson Independent

Jake Molloy and people from other unions have supported the just transition policy. They support a move away from the current dependence on the oil and gas industry and they support the creation of sustainable economic policies that take us away from the threat of ever-fluctuating job security in the oil and gas industry.

Photo of John Wilson John Wilson Independent

The redundancies that we have heard about and the actions that are being taken clearly show that the workforce that depends on the oil and gas industry is in flux. Those people do not know what is happening from one week to the next. We heard from Lewis Macdonald that terms and conditions are being eroded and wages are being cut.

I do not deny that North Sea oil plays an important part in our economy. It is for that reason that a just transition is needed. It is crucial that we secure our economy and the rights and welfare of workers, their families and communities in a future that is unpredictable but which will clearly not be fossil-fuel dependent.

I urge my colleagues in the chamber to join me in supporting the motion and rejecting the amendments that have been lodged. The motion supports workers in Scotland and highlights the need for a just transition to alternative work, greater training and skills education funding to support workers in a future fossil-free Scottish economy.

Photo of John Wilson John Wilson Independent

We have an opportunity to lead the way to a transition strategy that benefits the workforce and communities in Scotland. We need to put that in place as quickly as possible.

The Deputy Presiding Officer:

I am afraid that I can give the next two members only up to six minutes. Thereafter, I will have to reduce the time for speeches to five minutes. I apologise for that.

Photo of John Mason John Mason Scottish National Party

I am pleased to speak in this debate, and I am glad that the Green and Independent group has brought it to the chamber. I also congratulate Lesley Brennan on her maiden speech and welcome her to both the Finance Committee and the Delegated Powers and Law Reform Committee. We will see whether she is still smiling quite as much once she has been at the two of them.

I hope that we all agree that encouraging renewable energy is absolutely the right way to go. If there is a difference between us, it is probably that the Greens and Independents want us to go further and faster than we are going at present.

Photo of Jamie McGrigor Jamie McGrigor Conservative

On that point, I note that the Scottish Government announces on page 83 of the draft budget for 2016-17 that it intends to end business rates relief for renewable energy projects unless they are 100 per cent community owned. Is that a way of encouraging renewable energy?

Photo of John Mason John Mason Scottish National Party

As the member knows, his Government has cut this Government’s budget so there are issues, but I am more than happy that the Finance Committee will look at the issue in due course.

I will comment later on some of the issues that arise from the motion from the Greens and Independents, but first I want to challenge those who oppose the renewables movement, because there are people out there who do that. In particular, there are people who are opposed to wind farms. Using wind power is hardly a new phenomenon as people have been doing it for hundreds of years. The modern turbines are an update of traditional windmills, which most people would find acceptable.

I have to say that I also think that modern wind farms do look beautiful and can be an attraction in their own right. I accept that we do not want them covering all our land but, when travelling along the M8 to Edinburgh or down the M74 to Carlisle, I consider that the scenery is greatly improved by having some turbines along the way. Eaglesham moor, for example, was a pretty dull and dreary area in the past, but I consider the Whitelee wind farm there to be a great attraction. I am now keener to go out there for a walk on the 130km of trails among the 215 turbines, which can produce 539MW.

I think highly of the John Muir Trust and its work to protect wild land, but I think that its opposition to wind farms has sometimes been a bit over the top. Some of our wild land should be inhabited, and we need to find ways of encouraging people to move back there.

I will comment on some issues that I have with the motion. First, the motion states that there is

“current over-reliance on fossil fuels”.

I have to say that I am not totally convinced about that. We have relied on fossil fuels for a very long time, be they coal, oil, or gas. Clearly, they are not going to last for ever and we need to find alternatives, but we do not need to panic and try to move away from them overnight.

There are big challenges to be addressed before we can move away from fossil fuels, including on how to store electricity better for when we need it. We are seeing improvements in that regard. For example, I was impressed by the electric car that a friend recently took me for a run in, but it has a limited mileage before it needs recharging and the recharging process takes quite a lot of time.

On a larger scale, the pump storage at Cruachan can effectively store electricity at off-peak times and reprovide it at peak times. However, my understanding is that its efficiency is 75 to 80 per cent, so we lose a bit along the way. That position needs to improve very quickly.

Photo of Alison Johnstone Alison Johnstone Green

Does the minister not agree that if we were to invest more whole-heartedly in renewables, including at UK level, rather than in some of the most expensive electricity on the planet, we might be able to start getting renewables technology off the ground faster?

Photo of John Mason John Mason Scottish National Party

I am not yet a minister and I am probably unlikely to be one, but I agree with the member that renewables are a priority for investment. I would absolutely support any investment that the Government, the universities and others can make in that area.

Secondly, according to the motion, there is the question of the North Sea having

“a shorter lifespan than previously thought”.

I wonder whether that is the case and whether the position might be the opposite. If there are an estimated 22 billion barrels of oil remaining, surely we are not going to walk away from that. If it is too expensive to get that oil out of the North Sea at the moment, perhaps we can expect to do more once the price goes back up. It should be remembered that, as others have said in the debate, the oil price is very volatile—for example, it was below $20 a barrel in 1998 but rose in 10 years to more than $100 a barrel.

Thirdly, there is the concept in the motion of the Scottish Government failing

“to produce a plan for transition”.

I find that a very puzzling statement. From what I can hear, the whole tone of the Scottish Government is about investing and pushing on with the transition to renewable energy. Of course, there have been disappointments along the way, perhaps particularly with wave and tidal power, but any innovation has disappointments along the way.

The Deputy Presiding Officer:

You are in your final minute.

Photo of John Mason John Mason Scottish National Party

The tone from Westminster on renewables tends to be very negative in comparison to the tone from Holyrood.

As with other decisions we need to make in this Parliament, there is a balance to be struck between a variety of objectives. We want a strong economy and a healthy environment, and we need to maximise tax revenues from the taxes that people pay for the public services that we all want to see improved and expanded.

Photo of Claudia Beamish Claudia Beamish Labour

I start by congratulating Lesley Brennan on her first speech in the chamber and on her analysis of the climate change imperative and how we can address it together.

I am pleased to make a contribution to the debate this afternoon. I have long been fighting for the future proofing of our jobs market, and I welcome the chance to debate it with colleagues. The energy sector faces indisputable challenges today, and my thoughts go out to the thousands affected by job losses. We must address that issue in an immediate sense. However, I will speak in this debate about planned changes being an opportunity and not something to shy away from.

In the face of a changing climate, the commitments in the Paris agreement and the challenges to the traditional fuel industry, the greatest threat to our economy is not to plan for the future. There are fantastic examples of low-carbon jobs in Scotland today, and it is important to shout about those successes to give people the confidence to plan for the future. The Scottish Renewables briefing for this debate reminds us that across the UK there are now 21,000 jobs in renewables and that £1 billion of investment was made in renewables in Scotland in 2014.

Looking to the future, education must be at the heart of a strategy for a just transition. By introducing green themes to children in nursery and primary schools, we can inspire future contributions to the low-carbon economy. That thread should weave through every level of education.

Will the Scottish Government support programmes such as heatwise, which used to involve pupils in designing renewables technologies, and consider putting money into that sort of initiative? Eco-schools should be commended for the robust awareness-raising work that they do. The development of high school courses that focus on new, green skills is also vital.

The college sector must be highly commended for the role that it plays already in providing people with training, skills and opportunities for the new economy. In South Scotland, there is a plethora of opportunities for full-time courses in a wide range of renewable and clean technologies, theoretical courses combined with practical training facilities, and short courses to upskill those already in work.

Borders College recently launched the UK's first heat recovery system using the local waste water network, which now provides around 95 per cent of the heat for the Galashiels campus. Ayrshire College delivers a wind turbine technician course that is growing in popularity, as well as courses in a huge range of renewable technologies and energy efficiency. The spread of courses in emerging technologies is an extremely positive step.

Businesses small and large, co-operatives and communities, and unions are also engaging in the transition and investing in transferable skills. They should benefit from continued Government support. Unison promotes the recommendations in “Green Collar Nation”, a document produced by the Trades Union Congress and Greenpeace, and GMB has called for a link between vision and action for the green shift, particularly taking into account the needs of workers.

Our future economy should be based on the principle of circularity—reusing materials and keeping them in the system. Innovative product design needs to be supported as the nature of our resources, and the fact that they are not finite, become increasingly apparent.

For example, the Ellen MacArthur Foundation recently produced a report on the future of the plastics industry. To make plastics at present, we need oil and gas. It is estimated that plastic production uses the same oil consumption as global aviation. If we continue at this rate, the plastic sector will account for 20 per cent of total oil consumption by 2050.

Furthermore, by 2050, the report estimates that the world’s oceans will contain more plastics as waste than fish by weight. We need to decouple plastics in the longer term from the fossil fuel feedstocks and focus on developing new skills and ideas, with Government support, for a circular economy.

We cannot ignore change, and we must not pretend that change is not vital. We must plan in a staged and strategic way and take workers along with us on that journey. Scotland has been the birthplace of globally influential innovations throughout the last centuries. This is an opportunity to again be the trailblazers for innovation and creativity in a new economy and society.

As Lewis Macdonald said, it is very important that we have a just transition for workers and that we respect the needs of workers in the fossil fuel industries today, as well as planning for the future, so that we have a vibrant energy sector and a wider vibrant economy and that we protect our planet in the future. We cannot delay any longer.

Photo of Dennis Robertson Dennis Robertson Scottish National Party

Like my colleagues in the chamber, I congratulate Lesley Brennan on her maiden speech. It took me back to my own, and, if her knees were shaking, just like mine were at the time, I have every sympathy with her.

The motion before us today is not surprising, coming from the Greens, but I am not sure that it acknowledges where we are currently. Where we are today is reflected in the report from the EET Committee, mentioned earlier by its convener Murdo Fraser. The report is, I think, well balanced, because the committee spoke and listened to the sector, Oil and Gas UK, the Oil and Gas Authority, the trade unions and so on. The committee took on board not only people’s fears and aspirations but the fact that the industry was in an unsustainable situation.

In these kinds of debates, as MSP for Aberdeenshire West—where there is a significant number of oil and gas, subsea and renewables companies—I always want to point out that we are talking not just about the companies out there in the North Sea or those which populate the buildings in Westhill in Aberdeenshire but about all the companies in the supply chain.

When we talk about the industry, we quite often do not give much attention to the supply chain. We need to acknowledge that the redundancies that we have had in Aberdeen, Aberdeenshire and the wider community have affected not only the men and women on the platforms—and we are talking about more than 6,000 in that respect—but other workers in the sector. Some are on the administration side, but others—perhaps 30,000—are in the supply chain, and the impact has been felt in our hotel industry and in many of our small businesses. In addressing the current situation in the north-east, we have to look at not just the work of the energy task force but the wider impact on the broader community.

It is true that the numbers in the workforce were unsustainable, and I think that Oil and Gas UK and the industry itself had already reflected that view. In fact, they reflected it before the oil price started to decline, and they were looking at efficiencies and more collaboration and co-operation in the industry. That would probably have resulted in some job losses, but certainly not to the extent that we are seeing now.

My plea to the industry is that it thinks carefully about what happens when we get back to sustainability and recovery. Will it have the skilled workforce to extract the oil and gas that we will need in future? There are 22 billion barrels of oil and gas left. I know that this is where we move away from Patrick Harvie and the Greens, who would like to see that oil and gas left in the ground, but I believe that this is all about the careful stewardship that the minister referred to. We have to take the resources that are there at the moment.

We are also working towards having low-carbon communities. I sincerely regret that we do not have the carbon capture and storage facility at Peterhead, and I think that it was wrong of the UK Government to walk away from that. We have been encouraging the oil and gas industry to invest in research and development with regard to that low-carbon future, and it has been putting money into it. Shell, for example, has put an enormous amount of money into the carbon-capture sector.

The Deputy Presiding Officer:

You have 30 seconds left.

Photo of Dennis Robertson Dennis Robertson Scottish National Party

Much more remains to be said, but in conclusion I want to make it clear that this is all about working together. The sector, the unions and the politicians—whether they be local, here at Holyrood or at Westminster—need to do all they can to sustain the current industry, which is and will be at the heart of our economy now and into the future.

Photo of Jean Urquhart Jean Urquhart Independent

Unlike Dennis Robertson, I think that Patrick Harvie’s motion reflects the reality of the present situation with regard to jobs in Scotland’s new economy. Even if we were not to recognise that the oil is not infinite, we should be making a plan now.

Politicians and Governments are generally charged with short-termism, and everything that we have heard today that does not support the motion seems to have been just that. The motion is, of course, concerned about people’s work, jobs and an industry that has given the UK Government a great deal of income tax. It is also an industry that has taken a great deal of tax money and investment.

I will look at the current global situation. On the radio this morning, two economists were in agreement that the Chinese economy is likely to be much worse than is acknowledged by its Government, just as the improvement in the United States economy is probably overstated. They also agreed that the price of a barrel of oil is political. When agreeing the price of a barrel, the United States and Saudi Arabia may consider Russia, but they certainly do not consider Scotland’s economy. Below $20 a barrel it becomes untenable.

There is a glut of oil stocks, but the drop in price is out of our control. That is part of the problem. God help us If we run our renewables industry in the way we have run the oil industry. We say that there are 22 billion barrels of oil left in the North Sea, so let us look at a long-term plan.

I want to cite an example of a small town in the north of Sweden called Kiruna. There are 22,000 people living there and it is built on a mine, so there is subsidence as well as other problems. The people did not want to move, so instead of moving everybody they set out a 100-year plan for the people who work and live there. Over the next 40 years, they will move the town street by street and rebuild the whole thing in the same area, but out of danger.

That is the kind of planning that Scotland needs to do to make this transitional change. I represent the Highlands and Islands, and there is no doubt that it is seen as a powerhouse. Alex Salmond himself said that the Pentland Firth could be seen as a potential Saudi Arabia of energy.

I want to look at the reality of what we have done so far with renewable energy. We have built wind farms that have largely benefited private companies and private landowners. There have been very small and very selective community benefits.

Photo of Mark McDonald Mark McDonald Scottish National Party

The member will have heard me highlight in my speech that a target that was set for community renewables for 2020 was achieved in 2015. That surely demonstrates that the Scottish Government is showing support and leadership to community renewables schemes.

Photo of Jean Urquhart Jean Urquhart Independent

I have no doubt that there are some community-owned energy schemes, and I could cite some very good examples. However, we have to be realistic. The targets are not being met by community renewables and the economic driver of renewables is not in local communities.

We have to see a plan for a low-carbon economy. That is clearly long overdue. In Paris, the First Minister and the Minister for Environment, Climate Change and Land Reform declared that, to deal with climate change, they would embed funding for renewables in our budget.

After the past few months, nobody can be unaware of the damage that climate change does. It is not something that is going to happen; it is something that is happening now.

The Deputy Presiding Officer:

I am afraid that you have to close.

Photo of Jean Urquhart Jean Urquhart Independent

The best time to plant a tree was 30 years ago. The second best time is today. Please support the motion and start our 100-year plan today. Thank you.

Photo of Rhoda Grant Rhoda Grant Labour

I, too, congratulate Lesley Brennan on her first speech. It was an excellent speech in an important debate.

Oil and gas jobs are not only concentrated in Aberdeen. Many of my constituents are dependent on jobs in that sector, travelling from as far away as the Western Isle to go offshore. The jobs are based in some of our smaller and more remote communities, and their loss will have a knock-on effect on the economies of those fragile communities.

Shetland has an economy that is largely based around oil and gas, and the industry’s downturn has had an enormous impact on it. That emphasises, if we needed reminding, the global economy in which we live, with decisions being taken halfway round the world having a catastrophic impact on our constituents.

I want to make a plea. Margins are tight and cuts are being made in the oil and gas industry, but it is unacceptable if the cuts lead to cuts in safety. The changes in shift patterns are dangerous. Forcing people to work three weeks without a break is unsafe. The workforce must be rested and switched on, or it will make mistakes. The shift patterns will also impact on workers’ home life, their relationships and their families.

When dealing with substances as volatile as oil and gas, no corners can be cut on safety. We cannot simply write off an industry without consideration of the workforce and its future. We know that reserves will run out, but we need to plan for a managed withdrawal from those energy supplies. I am sad to say that I see no planning going on.

There are, of course, opportunities with renewables. Onshore renewables have been developed on the mainland and, in some cases, have provided a valuable income stream for communities. However, there are missed opportunities in making more of those developments. Indeed, had some renewables developments been wholly owned and managed by the public, they would have had a much better return, and community-owned estates would have been able to develop huge income streams. Some of them, but not many, have been lucky enough to do that.

Many areas have not enjoyed those benefits at all. Without an interconnector, the Western Isles cannot develop its full renewable energy potential, either onshore or offshore. Given the economic situation in those areas, the investment in that would be a game changer not just because of the income generated but because of the jobs created and the spin-off of the wealth invested by community landowners in jobs and diversification in the community.

The waters to the north and west of Scotland are the most energetic in Europe. The ability to harness that energy would bring much needed benefits in jobs and investment and also provide a source of dependable renewable energy to the whole country. Sadly, the investment in wave and tidal energy has been pulled back and we have seen developers go out of business or cut their research and development.

We have talked about the potential of wave and tidal energy for years, but the Scottish Government must invest in research and development, because the market is failing to do so. In Orkney, we have a great deal of expertise. We need to keep those people in the area and working on innovative technology that can capture wave and tidal energy. If we let them go, Scotland will lose the industry, because the expertise will be snapped up elsewhere. If that happens, we will end up buying in from other countries the wherewithal to extract our own natural resources. That has happened with onshore wind; we cannot afford to let it happen with wave and tidal energy. We must ensure that there is sufficient interconnector capacity from the islands back to the mainland to allow us to benefit from such energy when it is available.

The Highlands and Islands has the highest level of fuel poverty in Scotland. For the most part, that is because we are off the gas grid and the alternatives are expensive. We need a step change in insulation, but we also need people to be able to install microrenewables. That would cut the costs paid for energy, remove people from fuel poverty and create jobs.

People in fuel poverty cannot invest in microrenewables in their own homes; they need support and help in developing those alternatives. As I said, that could create jobs in small businesses. However, those jobs seldom go to smaller businesses because of the bureaucracy that is involved in the registration of installers. The registration must be done in a way that ensures small businesses benefit.

We need a clear energy policy. We must prepare for a time when we can no longer have oil and gas; we must manage that transition.

The Deputy Presiding Officer:

Thank you. My apologies for the lack of time. Joan McAlpine, you have a maximum of five minutes, please.

Photo of Joan McAlpine Joan McAlpine Scottish National Party

I have sympathy for the points that Patrick Harvie makes and for the consistency of his position, but it is a difficult position with regard to timing. I agree that there are transferable skills between the oil and gas industry and the renewables industry—skills in engineering, fabrication, financing and the myriad skills that cascade down the supply chain into the wider economy. However, just at the time when oil workers could be looking at alternative careers in renewable energy, that sector is being undermined catastrophically by the policies of the UK Government.

My colleague Mark McDonald pointed to the briefing from Scottish Renewables, which commended the leadership of the Scottish Government in promoting renewables, but more of the briefing is taken up by the barriers to future growth emanating from the policies of the UK Government. The report says:

“Cuts to and closures of support schemes at UK level . . . raise significant questions about the future” development of renewable energy. It is worth reminding ourselves of the extent of those cuts. They include the renewables obligation, which has been the main driver of growth in renewables capacity since 2002. The UK Secretary of State for Energy and Climate Change has announced that the renewables obligation will close to onshore wind a year earlier than expected, on 31 March this year.

With regard to contracts for difference, which are the only policy lever to support large-scale green generation, there is currently no certainty over the budget or timescales for the next allocation of contracts.

Photo of Joan McAlpine Joan McAlpine Scottish National Party

I am sorry, but I have no time.

Scottish Renewables says that

“the delay could fatally undermine the timeline for the projects on Scotland’s main island groups” and

“would also raise serious questions about whether the proposed offshore wind projects can make the 2020 deadline.”

The UK Government has also made it clear that it will not allocate future subsidy to offshore wind, as I have said, and that offshore wind will not form part of the next CFD allocation. The Economy, Energy and Tourism Committee has heard how contracts for difference are also unsuitable for energy storage projects, which has held up major pump storage initiatives and the development of interesting alternative storage technologies.

There is also uncertainty around the renewable heat incentive, which, although it is continuing, is having its budget reduced. We have still to hear how it is planned to work in the future. That affects small businesses all over Scotland that have invested in training staff to install the devices that enable renewable heat. To that we should add, of course, as others have, the abandoning of the carbon capture and storage project.

Even if we could effect a smooth transition from oil and gas to renewables, I believe that now is not the time to be rushing into things. It might give a sense of moral superiority to those who advocate a radical and abrupt change of direction, but it does not at this point offer workers the certainty that they need to make that change.

During our evidence-gathering session in committee, we looked at the Aberdeen and Grampian Chamber of Commerce oil and gas survey, which was conducted in collaboration with the University of Strathclyde. Obviously aspects of it were pessimistic, but there were positives. For example, it said that for individuals there were still jobs available. For companies, labour market conditions had eased and they were finding it easier to recruit and retain core staff. Over the next three years, employment growth is expected by contractors.

For that reason, we also need to be careful about being too hasty at moving to decommission. To quote the same report, Uisdean Vass, the Bond Dickinson oil and gas legal expert, made a very vivid comment. He said:

“A significant short-term increase in decommissioning activity will inevitably herald a more rapid decline in offshore exploration and production since the industry will feed on the body of infrastructure which supports it. In effect, the industry will be eating away at its own bones.”

That is a very vivid illustration of what we face. To go down that road and move away from what is obviously an important job creator in Scotland is far too risky.

The Deputy Presiding Officer:

That brings us to the closing speeches.

Photo of Mary Scanlon Mary Scanlon Conservative

I declare an interest: my son is a civil engineer who works in the wind farm industry. I say to John Mason that I am not against wind farms, but I like them to be in the right place.

I, too, congratulate Lesley Brennan—another feisty woman from Dundee—on her contribution to the debate. We look forward to working with her.

I thank the Greens and Independents for selecting this topic for debate. It took me back to when I left school in Montrose, in the 1960s. There was no North Sea oil industry then and opportunities for young people were very different from the opportunities that exist today. When I cast my mind back to the day I left school, I remember that my three options were bus conductor, cake seller in Frost’s, the local baker, or weaver in Paton’s jute mill in Montrose. I am thankful that what is on offer today is very different.

I agree with Sir Ian Wood, who said, in relation to the oil and gas industry:

“there are generations out there who have always just taken it for granted, and who have become very, very dependent on the oil and gas industry”.

He went on to say that that way of thinking needs to change and talked positively about a way forward

“with the right kind of plan, and the right kind of people, and the right kind of local authority and the right kind of reception from the Scottish and UK governments”.

Many speeches in the debate have been similarly positive and forward looking, rather than negative. I certainly do not think that the oil and gas industry belongs in the past tense.

I am pleased to note that members are more realistic and honest about North Sea oil revenues and that the Scottish National Party and the Greens are not forecasting unrealistic oil revenues for decades to come and decrying anyone who dares to think or say differently. The Office for Budget Responsibility was ridiculed when it forecast oil revenues of £3.3 billion for 2016-17 during the referendum campaign, but today it is a fact that Brent crude is $28 a barrel—more than $100 less than the SNP forecast in relation to economic independence. There is no doubt that the lifting of sanctions on Iran will bring more oil to market and affect price predictions.

In the early days of North Sea oil extraction, many people thought that the industry would last for 25 to 30 years. The high oil price enabled many marginal fields to be exploited, because it covered the increased costs of extraction. Now that some rigs are reaching the end of their working life—more than a third are more than 30 years old—costs are increasing and revenue is decreasing, so this is an opportune time for the debate.

I agree with Patrick Harvie about the undoubted opportunities in decommissioning. We have been slow off the mark in ensuring that our fair share of decommissioning comes to Scotland. Many of the earlier projects went to Norway and the north-east of England. I welcome investment in the infrastructure in Lerwick, but Scotland needs to ensure that opportunities are available to Scottish yards and Scottish workers, as Rhoda Grant said.

Scotland and the UK were pioneers in North Sea oil exploration, and we continue to export our expertise, with oil workers who were trained in Scotland working around the globe. We have the potential to become a global leader in the decommissioning skills that will also be needed around the world. Given that £17 billion is forecast to be spent on scrapping 79 platforms and plugging 1,200 wells over the next 10 years, and given the decommissioning budget of £47 billion up to 2050, decommissioning should be regarded as an opportunity to develop skills and jobs.

As Murdo Fraser said, we very much welcome the energy jobs task force, which was announced a year ago and which we hope will address skills shortages elsewhere in our workforce. However, we should be aware of the difference between wages for workers in the North Sea and wages for workers on wind farms. The average salary in the North Sea is £64,000, compared with an average salary of £25,000 for a technician who is building a wind farm. Furthermore, anyone who gets a two-year contract to work on a wind farm is very lucky and must wonder what will come next. In the long term, the only jobs on wind farms are for routine maintenance or callout, if problems arise. Patrick Harvie should also be aware that 70 per cent of the cost of a wind farm in Scotland goes out of the country, to pay for the turbines and towers.

I congratulate the Economy, Energy and Tourism Committee on its excellent report on the industry. I appreciate that the report is short and gives a snapshot in time, but I think that it makes an excellent contribution.

Photo of Jackie Baillie Jackie Baillie Labour

Like other members, I commend Lesley Brennan on her maiden speech. She pointed out that growth is sluggish—our growth rate is slower than the rate in the rest of the UK; unemployment here is greater in percentage terms than it is in the rest of the UK; employment growth here is not as fast as it is in the UK; and the jobs that we are generating tend to be low paid, temporary and part time. In that context, Lewis Macdonald was absolutely right to talk about the importance of oil. Oil is not a bonus or an optional extra; it is central to our economy. It accounts for billions and something like 200,000 jobs—well-paid jobs at that.

The white paper’s estimate of oil at $113 a barrel appears to be a distant memory when set against today’s price of $28 a barrel. The world has changed. The price is down 18 per cent even since the new year and has fallen a staggering 70 per cent in 18 months. Global oil demand ground to a halt in November and fell in December for the first time in 13 months. The big oil producers—the Saudis—are not about to change their policy. Lower prices in the months ahead have been predicted by a range of expert industry forecasters, from Barclays revising its estimates downwards to Morgan Stanley joining the growing number of voices warning that oil prices could slide down to $20 a barrel. That is devastating not just for our public finances or the economy but for jobs in the north-east and across Scotland. With all due respect, I say to the Scottish Government that it needs to recognise the seriousness of the problem and the fact that it has deepened dramatically in a very short time.

I absolutely agree that we should do all that we can to sustain this important industry, which is why from the very start Labour has been calling for regular oil and gas bulletins. We need to understand what is happening; specifically, we need to understand the impact on jobs and the economy, because doing so will help to ensure that the action that we take is right.

Photo of Mark McDonald Mark McDonald Scottish National Party

I welcome Jackie Baillie’s statement that everything that can be done should be done. Does she agree that exploration tax credits, which I said would help not just companies but the supply chain, would be welcome and are something that the chancellor should bring forward in his budget?

Photo of Jackie Baillie Jackie Baillie Labour

It strikes me that there is no point in a company having a tax credit if it is not paying tax. However, we would support any effort to invest in exploration. We would wish to do so through the OGA, because it knows how best to do that.

Oil used to count for about 13 per cent of Scottish GDP, but regretfully that is not the case now. Thousands of jobs have already been lost—Oil & Gas UK suggests that something like 65,000 direct and indirect jobs have been lost. As we heard from many members, BP is cutting 4,000 jobs globally, including 600 in the North Sea. Petrofac has said that it is cutting 160 UK jobs. We could have a roll call of oil companies.

Those losses also affect the supply chain, which includes businesses in the north-east and across Scotland. The FSB told us this week that confidence among small businesses was at its lowest level for three years, specifically because of fears about an oil industry crisis. Small local suppliers are just as badly affected.

We must also focus on individuals who have already lost their job and help them into alternative employment, so that we retain their skills. Ensuring that our economy can benefit from their knowledge in the future will be important.

I listened carefully to the minister. Of course we support the positive work in the oil and gas industry, the supply chain and the workforce that is making the industry more efficient, and we welcome the energy jobs task force. However, the task force last reported in September. We do not know how many people have been helped into other jobs or into retraining, because the Government does not know. We do know, as a result of a newspaper’s freedom of information request, that neither the First Minister nor any other minister—including the one who is here today—has met the chair of the task force since June. That is hugely disappointing. I expected a greater sense of urgency. We need a new oil and gas bulletin; in fact, we need regular bulletins. The last one was published in June on the very last day of the parliamentary term. When will we see an update? Can the minister promise to publish one before the Parliament dissolves in March?

Others have made the case for renewables, so I will not repeat some of the arguments. Suffice it to say that I believe that we need a mixed energy supply. Of course we will need to consider decommissioning and transitioning in due course, but there is still much opportunity in the North Sea. Murdo Fraser mentioned BiFab, which is a good example of a company that does decommissioning and offshore wind fabrication, and I commend it to the Government.

There are those who say that the situation is not a problem and that everything is wonderful. That degree of complacency shows a failure to understand the challenge to the economy. There are those who say that we should decommission everything now, but that misses the potential of what lies in the North Sea. To those who say that we should devolve control, I simply fail to understand what they are talking about—I find it frankly quite bizarre. We should be exploiting all the opportunities that are before us.

We will not support the SNP amendment because it pre-empts the Labour amendment and because we believe that the Scottish Government can do more. It can urgently review the impact on jobs and the support for the industry. Perhaps it will start by publishing an updated oil and gas bulletin.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Lesley Brennan finished on the very good point that the Parliament is a place where we can work together for the people of Scotland. I welcome her maiden contribution in the chamber. By working together, we can maximise the opportunities that we have in Scotland to create a secure and resilient energy mix. Scotland has set world-leading targets that make a strong contribution to required global emission reductions. We are on track to meet and exceed our 2020 target for a 42 per cent reduction in emissions.

Renewable energy is one of our most important industries. It creates jobs and investment opportunities while delivering secure, low-carbon and cost-effective energy supplies. In the past 10 years, renewable electricity output has more than doubled and now supplies half of the electricity that is consumed in Scotland, beating our provisional target by, I think, a year. We are also leading the way in the UK on support for local and community ownership of renewable energy, having met our 2020 target of 500MW of community and locally owned renewable generation capacity five years early.

We of course accept that we have much more work to do. Earlier today, I met Star Refrigeration, which is a leading company in the field of renewable heat through heat pumps and which has delivered projects in places such as Drammen in Norway. The company Sunamp is a world leader in providing methods of electricity storage. As a number of speakers have said, we need more pumped storage generally, but we also need more storage at distribution and household level. That is extremely important.

As Rhoda Grant pointed out, we need the islands to be connected. As I have said, that is my top priority—not a top priority but the top priority—which is why I have been working with the UK Government, first with Ed Davey and now with Amber Rudd, to try to achieve that. As an optimist, I am still hopeful that we may get there. That would achieve great things for the islands, for the reasons that have been stated.

I will say a little about some of the measures that have been mentioned. In response to points from Mark McDonald about the need for measures to encourage exploration, Murdo Fraser said that the industry has not focused on tax or mentioned it greatly. It is true that tax is perhaps not the main focus for many companies. Quite frankly—let us not beat about the bush—they are focused on survival. I recognise that but, at the same time, there are teams of people in Aberdeen whose work is almost entirely based on exploration and, if there is no work for them to do, we risk losing their skills. Dennis Robertson rightly made the good point that, if we lose people’s skills because there is no work for them to do, we might not be able to bring them back.

Faroe Petroleum drilled several wells—four, I think—in the Norwegian sector this year. It did that because Norway offers 78 per cent exploration tax-credit measures. It got four for one; it is like getting four of something from Tesco for the price of one from Asda. Plainly, that is an important measure.

I would like also to praise—

Photo of Mark McDonald Mark McDonald Scottish National Party

Does the minister agree that the impact of exploration on the supply chain is extremely important? Earlier, I cited a supply company that told me that every rig that is out exploring is worth £250,000 to that company.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

That is absolutely right. Another point is that hiring rigs and exploration gear is not expensive at the moment, because of supply and demand. Therefore, it is a great time for that.

We work very closely with Oil and Gas UK, Subsea UK and the Oil and Gas Authority. I have worked very closely with Andy Samuel, who is doing a great job; I think that that is accepted, at least by all the main parties that support the oil and gas industry. The OGA is doing new work to encourage fields such as Lancaster and Bentley, small pools, late-life extensions and a technology centre. We have set up the oil and gas innovation centre, which is funded to the tune of several million pounds and does great work. There are lots of positives going on. The Apache Corporation and TAQA have made recent discoveries—

Photo of Lewis Macdonald Lewis Macdonald Labour

Does the minister agree that the Oil and Gas Authority spending money directly on exploration—it spent £20 million on that in recent months—is the most effective way to enable the kind of offshore exploration that we want to see?

Photo of Fergus Ewing Fergus Ewing Scottish National Party

It is effective, but I doubt whether it is the most effective way. There is no sign that the UK is going to repeat that £20 million of spending in this year’s budget. It was good work, and we supported it. Incidentally, I think that post-graduates at Scottish universities can be put to use to analyse the data from that seismic work—I know that they can, and I have encouraged Andy Samuel to do just that with Scottish universities. I agree with some of Lewis Macdonald’s point, but I think that the approach needs to be supplemented.

In the time that I have left, I think that, despite the ideological divide between the authors of the debate and almost all the rest of us, it would be useful to ask a fairly simple question. In my opening speech, I mentioned that the projects at Clair, Kraken, Mariner, Etap, Quad204 and Culzean are all going ahead. The simple question is this: do the Greens support those projects going ahead, or are they saying that they think that they should be scrapped? I would be very interested to know the answer—if they will answer that question directly.

Photo of Patrick Harvie Patrick Harvie Green

I am grateful for the opportunity to do so. We have consistently published proposals, including during the referendum campaign under the auspices of the Green yes campaign, that make it clear that in the shorter term the focus must shift from maximum extraction to maximum revenue generation, so that we invest the revenue in the transition. Norway, for example, gets far more revenue per barrel of oil than the UK does, and unless we do that, we will be left high and dry when the transition arrives, whether we like it or not.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

If that was the answer to my question, I think that everyone will be as mystified as I am. I think the truth is that, for their own reasons, the Greens want essentially to shut down the oil and gas industry. If they do not want that, they can make it clear whether they think that those new projects, which will sustain tens of thousands of jobs and are great news for Scotland, should go ahead or not.

I welcome the opportunity to have the debate today. I am working with David Mundell, whom I will meet next Thursday, and the oil and gas industry, and I will visit Aberdeen next Monday and Tuesday. We will continue to demonstrate our support for the industry, not just by words but by deeds. We will do everything that we possibly can, working with others from all parties, to help people through these times of arguably the most severe challenges that the industry has ever faced. We will continue to do absolutely everything within our power to help to keep those people in work and doing such a great job for this country.

Photo of Alison Johnstone Alison Johnstone Green

I start by thanking Lesley Brennan for choosing to make her first contribution to Parliament in this debate. She said that at the heart of the motion is the economy; of course, at the heart of the economy are people.

This debate is about securing a prosperous future for Scotland. To do that, we need to think ahead of the game, be open to change and be bold in our ambition for what we can achieve. Of course, bold ambitions are admirable, but they will come to nothing without a serious and credible plan.

We know that we are overreliant on fossil fuels, with all the financial, social and environmental risks that that entails. Patrick Harvie, John Wilson and Jean Urquhart set out those risks well. Claudia Beamish spoke well on the opportunities that a low-carbon economy can bring, and all colleagues have rightly focused on job losses, although we disagree on how best to secure those jobs in the long term.

We know that the North Sea oil and gas industry—

Photo of Alison Johnstone Alison Johnstone Green

I would like to make some progress.

We know that the North Sea oil and gas industry is vital, but it cannot forever sustain jobs at their current level. Today’s job-loss situation brings that into sharp focus. We must help people who are being left out of work. It would be a reckless gamble on people’s jobs not to plan alternatives—a transition that secures people’s jobs and livelihoods and guarantees jobs in the new economy.

Sandra White spoke of the need to involve workers. We must absolutely do that, but let us not have constant post-redundancy action for those who work in the oil and gas industry. Instead, let us be proactive in ensuring job-matching and reskilling now. We need a prosperous economy to drive investment into low-carbon jobs because nobody benefits from economic turbulence and unemployment.

The Scottish Greens new economy report on what a transition could look like is clear that any response to climate change must be a job creator and a community rebuilder. Built on conservative estimates of the jobs that are required for an ambitious energy transition, the report shows how the new economy can employ thousands more people than the old one did.

Our 200,000 jobs estimate is for direct jobs—for high-paid and high-skilled jobs. We did not count so-called induced jobs, although those are a vital part of the picture too, as Dennis Robertson and other colleagues have highlighted.

I agree with Dennis Robertson that we must all work together for a sustainable future. The Scottish Parliament can lead, but it cannot do this alone. John Wilson highlighted the role of the trade unions in a just transition, and it is clear that delivering the low-carbon jobs and infrastructure that we need will require a wholesale change of UK economic policy away from austerity towards investment.

Today’s debate showed that there is some consensus on the need for change. Lewis Macdonald was right to say that a transition that is driven by crisis would not be just. Our motion recognises that. However, the big questions remain—we know that we cannot burn even half the world’s fossil-fuel reserves if we are to have a chance at avoiding catastrophic climate change, but every other party in this chamber advocates ploughing on and several members have spoken of the need for further exploration.

The Bank of England warns of repricing risks. That means the risk that oil companies are holding billions of pounds of stranded assets and are significantly overvalued as a result. Some national pension schemes are beginning to recognise the potential of that happening and are already divesting from fossil fuels.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

I would be grateful if Alison Johnstone could answer the question that Mr Harvie did not answer. Do the Greens favour the new projects that I mentioned going ahead or not?

Photo of Alison Johnstone Alison Johnstone Green

I think that Mr Harvie answered that question very fully. The Greens are not suggesting for a second that the oil industry should cease tomorrow. We are speaking about a just transition that will protect the thousands of jobs that have been lost—and those that will continue to be lost to the industry, while the Scottish Government does not come forward with a credible plan.

As I was saying, there are big systemic risks with real-world consequences for people—including job losses—and other parties are intent on blindly ignoring them. A healthy economy is vital for jobs, prosperity and investment in the low-carbon economy, so a disordered reduction in the fossil-fuel industry is in no one’s interests. We need to plan for such a reduction.

The Scottish National Party Government claims that it is planning for the transition and, to give credit where it is due, I say that it has made considerable efforts to expand renewables. However, it is just as fair to say that it is not passionately committed to reducing the burning of fossil fuels.

On Monday at Westminster, Green MP Caroline Lucas spoke up again against a UK Government that seems to be intent on pulling the rug out from under the renewables industry, and on throwing the Crown jewels at Hinkley Point C nuclear reactor. In the debate there, she spoke about

“the entrepreneurs’ call to climate action, a joint statement from 121 chief executive officers with international operations”.—[Official Report, House of Commons, 18 January 2016; Vol 604, c 1218.]

Those CEOs said that

“100% fossil free solutions” already exist, as

“opposed to a slightly better version of an already existing polluting alternative.”

In many cases, therefore, businesses are ahead of politicians.

Joan McAlpine spoke of the need for greater devolved powers. I agree—but if others are developing skills in decommissioning, it is really important that we do that, too. Think of all the jobs that will exist in decommissioning and the opportunities there. If we are not decommissioning, other countries will be doing so on our behalf.

Photo of Dennis Robertson Dennis Robertson Scottish National Party

Does Alison Johnstone agree that we should try to ensure that our young workforce of the future are given the diverse skills that will allow them to work in either industry—continuing in oil and gas or working in renewables, as is the case with Advanced Industrial Solutions—AIS—in Westhill in Aberdeen?

Photo of Alison Johnstone Alison Johnstone Green

We should be skilling our young workforce as well as we possibly can, but it is certainly the case that renewables has a far greater and more sustainable future ahead of it, as is demonstrated by what is happening in the oil and gas industry at the moment.

Murdo Fraser and the minister demonstrated that there is no recognition of the real-world risk that Mark Carney tries to get us to recognise: the need for a reduction in use of fossil fuels, coupled with an increase in low-carbon jobs. Those are two sides of the same coin.

Half our electricity comes from renewables; we are halfway to the 100 per cent target, which is great progress. However, there are so many more opportunities. Only 15 per cent of total energy needs were met by renewables in 2015, and Scottish Renewables predicts that that will rise to 28 per cent by 2020. To keep us on the right track, it proposes a 50 per cent renewables target for 2030.

To grow our renewables output, we need to harness the skills and experience of those who are currently working in the North Sea—subsea engineers, machine operators, helicopter pilots, surveyors, welders and many others—to build and maintain offshore energy infrastructure.

We need thousands of workers to make the transition to a healthy, sustainable and climate-safe society and economy, and we have the skills and expertise to do it. In 2014, the Department for Business, Innovation and Skills published a report comparing the supply chain that is needed for offshore wind to existing industries’ supply chains. There are many synergies. There are high synergies for surveys, for subsea array cables, for wind-farm design, for building substations, for building monopile foundations and so on. For 75 per cent of the offshore-wind supply chain, there is existing expertise in the oil industry that has been applied to wind.

That means that people who are directly and indirectly employed by North Sea oil are extremely well placed to build Scotland’s offshore renewables infrastructure. We do not have all the skills for the transition, but our existing industries give us an incredible kick-start. We need to plan and invest to deliver the rest, and we need that massive increase in apprenticeships, coupled with a focus on breaking down the gender segregation that is so evident in our modern apprenticeships.

Skills gaps hinder progress. Even in London, companies were stymied when they tried to increase building retrofitting, because of a lack of workers with the appropriate skills. The oil and renewables industries already face a shortage of skilled offshore workers. Without a good depth of skills and without companies that are able to deliver infrastructure, prices can shoot up. That is already a concern when we consider flood defence mechanisms.

None of that means an end for oil and gas in Scotland. We have to adapt, but we have no doubt that the North Sea and its oil and gas still have an important role to play in our economic future. From school rulers to roofing tiles, from pipes to paint and from ink to contact lenses, the raw materials come from the North Sea. Vital ingredients for medicines are found there, too. Surely we should seek to lengthen the longevity of such uses.

In 20 years, people may look back and wonder why we burned such valuable and irreplaceable resources as oil and gas long after we became aware of alternatives. Scotland can deliver a safer and more stable economy, with stronger communities and secure employment. We can do that by securing jobs today, planning the transition and being bold in our ambition for the jobs of tomorrow.

I commend the Green motion.

Photo of Patrick Harvie Patrick Harvie Green

On a point of order, Presiding Officer. I am sorry for not bringing this to your attention in advance.

You frequently remind members who have taken part in debates that they should be present in the chamber during the closing speeches—not simply to be present but to listen. Does that principle also apply to a minister representing the Government in today’s debate, who chose to spend time wandering about the back of the chamber during the opening and closing speeches by the party that was bringing the debate?

Photo of Fergus Ewing Fergus Ewing Scottish National Party

On a point of order, Presiding Officer, in response to Mr Harvie’s judgment, I respectfully point out that except for one comfort break I have been in the chamber throughout the whole debate. I have consulted civil servants at the back intermittently and I have listened to all members with, I hope, courtesy and respect.

Photo of Tricia Marwick Tricia Marwick None

As I have not been present for most of the day, I have no further comment to make on the matter.