North Sea Oil and Gas (Energy Security)

– in the Scottish Parliament on 8th March 2022.

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Photo of Liam Kerr Liam Kerr Conservative

2. To ask the Scottish Government whether it will review its position on North Sea oil and gas exploration and production in relation to the security of Scotland’s energy supply. (S6T-00562)

Photo of Michael Matheson Michael Matheson Scottish National Party

The Scottish Government has made it clear that unlimited extraction of fossil fuels is not consistent with our climate obligations. Scotland’s energy sector has a crucial role to play as Europe and the world move beyond the age of fossil fuel, and we can be a key part of a solution that seeks to ensure energy security amid on-going economic and geopolitical turbulence.

At the Scottish Renewables conference today, I made the point that renewable power could provide a more consistent and stable energy supply in the wake of rising prices and unpredictable supplies of oil and gas. Scotland has among the richest renewable energy producing potential in the whole of Europe but is unfairly penalised by the transmission charges that are applied, which are a direct disincentive to producers and investors.

Our focus is on achieving the fastest possible just transition for the oil and gas sector—a transition that delivers jobs and economic benefit, that ensures our energy security and that meets our climate obligations.

Photo of Liam Kerr Liam Kerr Conservative

I think that that answer boiled down to, “The Scottish Government will not review its position.”

People will hope that, before the conclusion was reached that security of supply, environmental benefit and ensuring that we cut off funding to Russia are not reasons enough to pursue domestic oil and gas, a full investigation into future energy security was carried out.

In what year, following his ramping up of renewables, do the cabinet secretary’s research projections say that renewables will consistently cover 100 per cent of Scotland’s energy needs without our ever needing oil and gas? When does his research say that Scotland will have no further need for imported oil and gas?

Photo of Michael Matheson Michael Matheson Scottish National Party

I am sure that the member recognises that Scotland and the United Kingdom as a whole have security of energy supply at the moment, with very low reliance on imported oil and gas from Russia—it is about

2 per cent, apparently, which could easily be displaced by alternative supplies. It would be wrong of the member to try to give the impression that there is an issue with security of supply.

As he will also be aware, the equivalent of Scotland’s domestic electricity supply—some 98 per cent of it—now comes from renewable sources. We have been ramping that up over recent years and we plan to ramp it up yet further.

The outcome of the ScotWind leasing round demonstrates the scale of the ambition to invest in Scotland’s renewables sector, which could give Scotland not only a massive environmental boost but a massive economic boost, too, and not just in renewable energy but in hydrogen power—we could not only provide hydrogen for domestic users but be a net exporter to other parts of Europe.

Scotland is well placed in its energy transition, and this Government’s policies and the approaches that it is taking will ensure that we continue to drive that forward in years to come.

Photo of Liam Kerr Liam Kerr Conservative

Many others take a very different view of the issue from that of the cabinet secretary. The UK Government has made it clear that we must ramp up domestic gas production to replace Russian supplies and reduce costs for United Kingdom families. Since Sunday, Messrs Blackford MP, Smith MP and Ewing MSP have demanded more home-grown gas for security of supply, not least because, as Ian Blackford put it, buying Russian energy funds Putin’s war.

In the weekend’s newspapers, an unnamed Scottish National Party minister said:

“What’s puzzling to many in the party ... is when you have a domestic supply, why you wouldn’t want to use that for the benefit of people here and to stop paying for supply from elsewhere, particularly if it benefits the Russians.”

What evidence does the cabinet secretary have that convinces him that, in rejecting more domestic production, he and Nicola Sturgeon are right and everyone else is wrong?

Photo of Michael Matheson Michael Matheson Scottish National Party

The member fundamentally misses the point, which is that the climate crisis that we face has not gone away. We need only look at the report from the Intergovernmental Panel on Climate Change the other week, which set out clearly the scale and nature of the climate challenge that we face and the need to make sure that we take appropriate action to deal with it.

The answer is to step up the decarbonisation of our energy systems, just as Germany proposes to do, by bringing forward its target by some 15 years, or as the Dutch Prime Minister set out yesterday, when he was in London, sharing a platform with Boris Johnson. The answer is to decarbonise at a faster rate so that we are not dependent on oil and gas.

The failure of the UK Government to recognise that is demonstrated by the way in which it continues to have transmission charges that penalise Scottish projects, making them the most expensive in the UK to take forward and causing businesses to choose to put their investments elsewhere. It is also failing to take forward projects such as the Scottish cluster and carbon capture and utilisation—the best-placed project in the whole of the UK to demonstrate a key technology that can help us not only to deal with the energy transition but to meet our climate change targets. What we need from the UK Government is a level of ambition that matches ours in decarbonising our energy system and meeting our climate change obligations.

The Presiding Officer:

There is much interest in this question. I would like to allow those who have pressed their request-to-speak buttons to ask their questions, and I would be grateful for short and succinct questions and responses.

Photo of Colin Smyth Colin Smyth Labour

The SNP promised that there would be 130,000 renewables jobs by 2020, but, for the fourth year running, the number has fallen, and it now sits at just over 20,000. As a result, oil and gas workers simply do not trust the Government when it talks about a just transition, as the cabinet secretary has just done.

If the Government is serious about a just transition, will the cabinet secretary give a commitment that every single penny raised from the ScotWind leasing round will be ring fenced for investment directly relating to opportunities created by that leasing round, to ensure that the vast majority of supply chain jobs are in Scotland instead of those jobs being offshored, just as the Government has offshored the profits?

Photo of Michael Matheson Michael Matheson Scottish National Party

There are two key points here. First, it is important that, as we reduce our reliance on oil and gas, we deliver a just transition. That is why, as part of our refresh of the energy strategy, we are also taking forward our just transition planning, to ensure that it aligns with our energy policy for the sector, which is to support those in the oil and gas sector to move into our renewable energy sector.

My second point is about the revenues that are generated by ScotWind. As has been set out, funding payments made by those who have been given leasing options will be used to prioritise our investment in tackling climate change and diversity loss—the twin crises that we face as part of the global challenge. We will ensure that that funding is used in a way that helps to deliver jobs, protect the natural environment and tackle climate change.

I give Colin Smyth the assurance that this Government is absolutely determined not only to capitalise on the environmental and economic benefits of ScotWind to deliver a just transition for the oil and gas sector in Scotland but to protect and enhance our natural environment for the years to come.

Photo of Bill Kidd Bill Kidd Scottish National Party

We know that Russia’s invasion of Ukraine could result in a significant increase in energy bills, which will be a huge concern to many households across Scotland that are already facing a cost of living crisis. Given that energy is a reserved matter, will the Scottish Government continue to push the UK Government to cut VAT on energy bills? That would be one of the simplest means of helping energy consumers in the short term.

Photo of Michael Matheson Michael Matheson Scottish National Party

We have raised with the UK Government on a number of occasions the fact that it needs to take seriously the cost of living crisis that households are facing, which will result in a significant number of people in Scotland ending up in fuel poverty or extreme fuel poverty. As we can now see, the measures that the UK Government has taken are nothing more than smoke and mirrors, because it turns out that there is no new money from the Government to support even the £150 that people were meant to get as a discount on their council tax payment. The UK Government has failed to recognise that this issue will blow up in its face at some point because households, particularly those on lower incomes, are facing extreme financial challenges.

It is time for the UK Government to face up to that and to put serious financial resources in place to support households that are experiencing difficulties. That could mean removing VAT on fuel bills; it could be about providing new money to meet the cost of living; and it could involve ensuring that the loans that the Government is providing to people over the course of this year are converted into grants in order to support them, instead of playing out a game that is nothing more than smoke and mirrors at a time when families are struggling to decide whether to heat their home or put food on the table.

Photo of Mr Mark Ruskell Mr Mark Ruskell Green

Across Europe, Governments are waking up to the fact that we must end our dependency on oil and gas in order to create a safe and secure world. Does the cabinet secretary agree that the UK Tory Government needs to invest urgently in renewables and insulation instead of listening to the likes of Liam Kerr and Nigel Farage, who would rather plunge households into poverty and lock us into a future of volatile gas prices and climate breakdown?

Photo of Michael Matheson Michael Matheson Scottish National Party

Liam Kerr and Nigel Farage are joined at the hip when it comes to energy policy—I do not know whether Liam Kerr would entirely agree with that.

It is extremely important that we do not lose sight of the climate crisis that we face. We only have to reflect on the report that was published by the IPCC just over a week ago, which demonstrated not just the extent to which climate change is already locked in—it is greater and more damaging than was previously thought—but that we are at risk of not meeting our climate change obligations because of a lack of action having been taken internationally. The report was

“called an ‘Atlas of human suffering’ for good reason: climate change threatens human wellbeing. Billions are vulnerable and some impacts are already here e.g. extreme weather. The 1.5C target is important to prevent even worse.”

Those are not my words; they are the words of Maurice Golden when he described the report just last week. We need honesty from the Conservative Party about the need to take the action that is necessary to tackle climate change rather than play petty politics on issues on which it fails to take substantial actions.

Photo of Beatrice Wishart Beatrice Wishart Liberal Democrat

Does the cabinet secretary recognise the importance of the thousands of onshore jobs in the Scottish supply chain that support North Sea oil and gas, and that the transferable skills of those workers are critical to the innovation and development of renewables?

Photo of Michael Matheson Michael Matheson Scottish National Party

Beatrice Wishart raises an important point. The oil and gas sector is a strength to the renewables sector in Scotland as part of our energy transition.

We can see from the assessment work that has already been done in the oil and gas sector that many of those with skills in oil and gas have skills that are highly transferable to new, low-carbon energy systems and the renewable energy sector. We need to capitalise on that, which is why, as part of our new energy strategy, we will also take forward the just transition planning for the energy sector, to deliver the right support and assistance to help those in our oil and gas sector to transfer into the new low-carbon energies of the future.