Scotland needs oil and gas. Both currently provide around 75 per cent of the United Kingdom’s energy; domestically, the UK produces about half of that figure, and that is already declining, even with new fields. We have 24 million homes that are heated by gas boilers; in 2020, oil and gas provided over 90 per cent of Scotland’s heat demand; and 32 million vehicles rely on petrol and diesel. Oil and gas produce plastic medical equipment, which our hospitals use to save lives. We use oil and gas to make fertilisers for our farmers to grow the crops that feed us and to make the mobile phones and laptops that people are working on right now. That demand is not going away.
The Climate Change Committee has said that Britain will need 16 billion barrels-worth of oil and gas between now and 2050 to service a demand for electricity that is expected to nearly treble by 2050. By the mid-2030s, oil and gas will still provide 50 per cent of our energy needs, because, whether we like it or not, intermittent renewables such as solar and wind account for only about 4 per cent of our total energy needs. It is demand that is the issue here, because, while it subsists, we have to meet it from somewhere.
Does the member not recognise that those 16 billion barrels are also what is left in terms of extractable reserves? In other words, he might well be right that it might meet future demand, but the fact is that we have gone past peak oil. It is not the future—it is the past. This is about transition, not about continuing to use oil, is it not?
It absolutely is about transition, but the fact is that the member cannot get round the demand point. If there is demand, we have to ensure that the industry remains here—and remains productive and profitable. Why? Because we need it for energy security, to reduce our exposure to places such as Russia and for our economic security.
This year, the industry will add more than £20 billion to the UK’s economy, employing up to 200,000 people—including 90,000 in Scotland, 95 per cent of whom are in my region of North East Scotland. It is telling that, if no new oil and gas licences are granted, it will cost the Scottish economy £6 billion by 2030, in a context where we are, apparently, facing a £1 billion black hole.
I will, in a second.
It is imperative to note that ending the industry early will lead to higher energy bills, as the Institute of Economic Affairs has said. That is why, when the Labour Party launched what the GMB’s Gary Smith described as a “stupid” and “catastrophic” policy to ban new North Sea developments, people were stunned. They asked how on earth a prospective party of government could put forward a policy that Smith described as “utterly incoherent” economically. Indeed, GMB Scotland’s secretary called the policy “naive”, “unnecessary” and “self harming”.
Perhaps that can be explained by the UK Labour Party’s ignorance, but it does not explain why Scottish Labour winds in behind that madness. Leaving aside the fact that Anas Sarwar has not even had the courtesy to acknowledge let alone reply to my letter, he was on ITV’s “Representing Border” only yesterday, backing the ban on new developments. If there is any doubt about Scottish Labour’s position, I remind the chamber of the motion that Monica Lennon lodged last November, stating that
“no new oil and gas licences should be approved”,
The UK Government has been talking about its huge plans to decarbonise, as we have heard in the Net Zero, Energy and Transport Committee. It is why we have the innovation and targeted oil and gas—or INTOG—grant and why the Office of Gas and Electricity Markets has proposed a new net zero duty. Huge developments are going on, which Gillian Martin, as the Minister for Energy, ought to know.
Really, the Scottish National Party has a similar problem to Labour, with its presumption against new oil and gas in its energy strategy. Last month, it wheeled out the First Minister to give some warm words to the industry. It also wheeled out Gillian Martin, Màiri McAllan and Jackie Dunbar, who were all quoted in similarly ambiguous terms. However, the people of Scotland can see that the presumption is retained in Neil Gray’s amendment. The SNP is the party of Nicola Sturgeon, who was so opposed to Cambo; of Minister Paul McLennan, who also signed Monica Lennon’s motion; and of Màiri McAllan, who has been reported as saying:
“we do not agree with the UK Government issuing new oil and gas licences.” —[
, 22 November 2022; c 12.]
Meanwhile, Neil Gray, the Cabinet Secretary for Wellbeing Economy, Fair Work and Energy, refused in a committee meeting last month to back new oil and gas development in the North Sea and then said that he did
“not have responsibility for the area”.—[
Official Report, Net Zero, Energy and Transport Committee,
9 May 2023; c 21.]
The SNP must think that the north-east is buttoned up the back.
The people of Scotland know that, if the decision on granting licences for new projects was not reserved to Westminster, the SNP would be forced by its coalition with the Greens—the party that sits next to it in Government—to block every application. Patrick Harvie of the Greens claimed that supporting oil and gas makes one hard right.
I do not have time to develop the point that the current North Sea industries will be what drive net zero. Those businesses will, for example, help to develop 13GW of offshore wind capacity by 2030, with £30 billion-worth of investment. No doubt other speakers will pick that up. We have a choice between UK-produced oil and gas, and oil and gas imported from countries with weaker regulatory regimes and emissions targets and unstable politics. Taking those imports would export our jobs. Sharon Graham, Unite the Union’s general secretary, has said of Labour’s plans:
“Grabbing the headlines is easy, developing a serious plan for more renewable energy is not.”
I am out of time, Mr Johnson.
Sharon Graham is correct. Neither Labour nor the SNP-Green coalition has that plan. The only party that has a credible plan for working with our oil and gas industry and renewable sectors to get to net zero, while keeping the lights on, our homes warm and the economy moving and without losing the skills and experiences that are needed in order to deliver the energy transition, is the Scottish Conservatives.
That the Parliament recognises the vital role that oil and gas plays in Scotland’s energy mix and in supporting tens of thousands of Scottish jobs, particularly in the north east; condemns Labour Party plans to ban new production from the North Sea, and the Scottish Government’s stated presumption against new exploration for oil and gas in the North Sea, contained in the Draft Energy Strategy and Just Transition Plan; acknowledges that there is a climate emergency and that the Scottish Government must deliver on carbon emissions targets and achieve net zero by 2045, but further acknowledges that a just transition for workers to green jobs, so that no communities are left behind, cannot be achieved without the investment, innovation and skills from the oil and gas sector and support for the North Sea industries, and calls, therefore, for the Labour Party to reverse its opposition, and for the Scottish Government to remove its presumption from the Draft Energy Strategy.
The Scottish Government is absolutely committed to a just transition and ensuring that we take workers with us on our journey to net zero. For the Scottish Government, the transition is both the outcome—a fairer, greener future for all—and the process that must be undertaken in partnership with those impacted by the transition to net zero.
A just transition supports a net zero, climate-resilient economy in a way that delivers fairness and tackles inequality and injustice, and we will not do to the north-east what Margaret Thatcher did to our mining and steel communities, when people and places were callously discarded and jobs that were promised were never delivered. The impact of that thoughtless deindustrialisation is still being felt decades on by communities that I represent in Airdrie and Shotts.
The oil and gas sector, and particularly the skills, talent and experience in the north-east, must play a critical role in supporting the build-out of low-carbon technologies in Scotland. We cannot ignore the fact that there is a climate emergency, which is why we have been clear that unlimited extraction of fossil fuels is not consistent with Scotland’s ambitious climate obligations, and our focus must now be on a planned and fair transition that leaves no one behind. That means that simply stopping all future activity is wrong. That could threaten energy security, while destroying the very skills that we need to transition to the new low-carbon economy.
Neither can we put our heads in the sand, as the Conservative Party seems determined to do, and behave as though the North Sea contains an endless supply of oil and gas that is cheap and easy to produce. Oil and gas workers know how challenging conditions are offshore, and energy companies know how rapidly the area is maturing. It is irresponsible of the Conservatives to suggest otherwise. Their approach risks the economic future of the north-east, would expose us to higher energy prices and compromises our energy security. They do not want a transition.
Instead, we, as a party of Government, are acting responsibly. We are facing squarely up to the challenges and planning a managed transition that supports the workers and communities of the north-east and all of Scotland, instead of putting in place the cliff edge that Gary Smith from the GMB said would result from Labour’s plans for oil and gas.
Scotland has the skills, talent and natural resources with which to become a global renewables powerhouse, and our draft energy strategy and just transition plan, which was published on 10 January, sets out our vision to achieve that. An energy system that delivers affordable, resilient and clean energy supplies not only will enhance our energy security through the use and development of our own resources but means that we will generate enough cheap green electricity to power Scotland’s economy and to export electricity to our neighbour, supporting jobs here in Scotland and assisting the decarbonising ambitions of our partners.
I would like to understand the Government’s current position on the Rosebank licence, which we know sits with the UK Government. Will the Rosebank licence, if approved, help or hinder the just transition that we need? After all, this is not just a transition—it is a just transition for workers and communities. It is a pity that Liam Kerr would not take an intervention, but I would love to get some clarity from the Scottish Government, because I wrote to Humza Yousaf on the subject ahead of his meeting with the Prime Minister and received no response. Communities deserve better than that.
We have said clearly that any future exploration in oil and gas production in the North Sea needs to pass much more stringent climate compatibility tests. I think that that is critically important. We have already said that the unlimited extraction of oil and gas in the North Sea is not compatible with our net zero targets.
We have just finished consulting on the energy strategy and just transition plan, and we are currently considering the responses that we have received. Later this year, we will set out a confirmation of our policy framework in that regard. The plan sets out more than 150 actions, as well as consultation on further actions to help maximise a just transition to net zero for our communities, businesses and workers. We are already doing the hard work of supporting the just transition and ensuring that it is not only just but as swift as possible.
The Scottish Government sees offshore wind as one of the most important economic and net zero opportunities. Our operational, under-construction, consented and in-planning projects, together with the market ambitions expressed in the ScotWind and INTOG leasing rounds, set our potential renewable electricity pipeline at more than 40GW.
That could produce enough electricity annually to power every home in Scotland for 17 years.
I am running out of time—I am really sorry that it is such a short debate.
In order to unlock all those potential developments, we must build on a robust offshore wind planning programme to address the challenges going forward. There is a clear need for significant new network investment to ensure that our infrastructure does not become a barrier to net zero. Although we welcome Ofgem’s recent decision to accelerate the approval of strategic transmission infrastructure, the UK Government needs to take action to provide the Scottish Government with the right powers to enable us to modernise the planning and consenting system for grid infrastructure. Unfortunately, in that regard, we have the energy but we do not have the power.
As for the supply chain that is coming through, we expect ScotWind developers to invest an average of £1.4 billion per project into our economy across the 20 offshore wind projects. We need to support our offshore wind developers as they meet their supply chain commitments.
I am very sorry that the debate is so short and that we have such a small amount of time to debate the issues, because I had much more that I wanted to say, not least in response to what has come through from the Conservative Party.
In conclusion, the rhetoric over recent weeks has demonstrated that the Tories appear not to want a transition and that Keir Starmer’s Labour Party appears not to want a just transition.
I move amendment S6M-09339.3, to leave out from “vital” to end and insert:
“role that is played by oil and gas in the energy profile of Scotland, the tens of thousands of jobs in that sector, and the essential contribution that the sector’s skilled workforce must make to Scotland’s present and future energy security; recognises that the draft Energy Strategy and Just Transition Plan sets out a future energy pathway for Scotland and highlights that, to realise its climate change ambitions, Scotland needs to transform the way it generates, transports and uses energy; notes that the Scottish Government has consulted on whether, in order to support the fastest possible and most effective just transition, there should be a presumption against new exploration for oil and gas, with a final decision to be made later in 2023; acknowledges that huge progress has been made in the energy transition in the last 20 years; reiterates its firm commitment to ensuring a just transition and that just transition principles are embedded in legislation; calls, therefore, on the UK Government to support the fastest possible just transition for the oil and gas sector; expresses deep disappointment that the UK Government has repeatedly refused to match the Scottish Government’s £500 million Just Transition Fund for the north east and Moray, despite benefitting to the tune of hundreds of billions of pounds at today’s prices over decades from North Sea oil and gas, and calls on the UK Government to support the deployment of carbon capture, utilisation and storage (CCUS) for the Scottish Cluster to capitalise on Scotland’s competitive advantage, including its world-leading workforce, who will drive forward the just transition and help industry to decarbonise at pace.”
Today’s motion from the Tories is the height of hypocrisy.
The Tories have been in power since 2010 and have presided over rising energy bills but, when it comes to the vital infrastructure and the political support that are needed to develop the renewables transformation that we urgently need across the UK, successive energy ministers have dithered and delayed.
It has to be a just transition and it has to be about planning ahead for both the short and long term. We need to bring together our energy industries, by using the skills, leadership and workers that are already in the oil and gas sector and the critical supply chains, and by developing the new manufacturing jobs in innovation, which our universities are currently working on, that will enable us to deliver on our net zero ambitions.
Over the past few days, there has been a lot of inaccurate speculation, so it is important to get the facts right, not to listen to the rumours on which the Conservative motion and Liam Kerr’s desperate speech this afternoon are based. Scottish Labour is absolutely not turning the taps aff now.
We will work with the sector and its workers to ensure that the just transition starts now, by using our existing oil and gas fields and maximising their effectiveness, as we follow the commitments that were made at the 26th United Nations climate change conference of the parties—COP26—in Glasgow, to play our part in tackling the climate crisis that our world now faces.
No—I might have done if it had been from somebody else.
We are in a global race to net zero and we are seeing none of the ambition, forward planning or strategic investment with which our global partners, such as the USA, are now moving ahead at pace.
The Tories are in serious danger, as the cabinet secretary said, of doing what they did to the miners and mining communities under Thatcher. Those communities are still suffering, so we need to learn that lesson.
I am going to come back to this, because it is about serious investment in leading in green manufacturing, and the £28 billion every year for a decade that Ed Miliband and Rachel Reeves are talking about will bring our trade unions on board, because they will see those jobs from day 1. However, we need that investment now. We have renewables projects in a queue because we do not have grid capacity. That is totally unacceptable.
A grid that was incidentally designed does not address the scale of change and the new renewables that we urgently need now. Thirteen years on from the Tories taking power, they have not delivered on the renewables opportunities that we have seen developed in Scotland.
I am proud of the work that we did in Parliament to set what were then seen as radical targets, but it is bitterly disappointing that we have not seen work from the SNP to ensure that our communities benefit from that renewables investment, whether that is the missed opportunities with ScotWind or the lack of support for our councils to power ahead on delivering municipal heat and power networks, delivering jobs and lowering bills.
Jobs are critical to that but, as the Scottish Trades Union Congress said in response to the vacuous Scottish Government energy strategy and just transition consultation, it falls dramatically short of addressing the crisis that working people face. The trade union-led Just Transition Partnership said:
“It is imperative that we have a strategy that meets our climate demands and ends fuel poverty. Instead we have a re-statement of existing policies. On the most important matters it asks questions rather than takes positions.”
We need action now. It is not good enough from either the Tories or the SNP—we have not had the focus on jobs that we need in our communities. To bring people’s existing gas and electricity costs down means investing in retrofitting our homes and other buildings, and developing heat and power networks that deliver real community benefits.
I will be very brief. On the issues of jobs, does Ms Boyack accept that the £200 million investment that is coming to Scotland from Sumitomo, which will bring 150 jobs, is just the start of the supply chain pipeline that is coming from ScotWind?
It is nowhere near ambitious enough. That is the difference with Labour’s green prosperity plan—it will deliver the jobs and the investment in Scotland at the scale that we need now. It represents value for money to taxpayers, and it will deliver energy security going forward. It is a partnership between Government, business and workers to develop low-carbon renewables—solar, wind, wave and tidal—using all the resources in our existing oil and gas fields and the skills of our oil and gas workforce in Grangemouth.
L abour is committed to that action.
I move amendment S6M-09339.2, to leave out from “condemns” to end and insert:
“believes that the only way to break out of 13 years of rising energy bills and energy insecurity is to decisively move to clean, cheap, homegrown power, with a full range of energy sources; agrees that oil and gas production in the North Sea will continue for decades to come and the skills of the oil and gas workforce will be crucial to delivering this energy transformation; understands that it is vital that a phased and responsible transition is delivered and that partnership with government, business and workers will be crucial to achieving this, while managing existing oil fields for the entirety of their lifespan; further understands that the Labour Party announcement of the Green Prosperity Plan would mean an annual £28 billion investment into clean energy and green technology, which would ensure the creation of hundreds of thousands of good jobs, with decent wages, in Scotland and the UK for the decades ahead, and would give people working in energy security for the future, while transforming the UK into a clean energy superpower, and calls on the Scottish Government to deliver on carbon emissions targets and achieve net zero by 2045.”
Today’s debate mirrors one that we had about 18 months ago. Now, as then, we need to start by acknowledging that maximum extraction is not an option—oil and gas resources will have to be left in the ground. At the same time, the motion is right to point to the current contribution of the oil and gas sector to our energy system, to our economy and to tens of thousands of jobs across the country, notably in regions such as the north-east and the Highlands and Islands.
Therefore, when we talk about a just transition, we must accept that it will look different in different parts of the country. In my Orkney constituency, as the cabinet secretary will well know, the Flotta terminal has been integral to our island economy and community, as well as at a national level, for almost half a century. The terminal has seen many changes over that time as the sector has matured. There is even talk of a potential green hydrogen plant being located on the site, linked to the proposed West of Orkney offshore wind project. That illustrates the sort of transition that we need to see, but it also underscores the complexity, sensitivity and tailored nature of that transition.
It is worth reminding ourselves that the UK Climate Change Committee scenarios anticipate oil and gas accounting for between 47 and 54 per cent of total cumulative energy demand between 2020 and 2050. A marked reduction, no doubt, but significant, and a warning of the need both to bear down on demand and to avoid simply displacing domestic production with imports that are more environmentally damaging and that create their own security of supply issues.
There is ample evidence of the willingness—indeed, appetite—of those working in the sector to be part of the energy transition. Although there are certainly transferable skills between oil and gas, and renewables, that is not always the case. The Government and agencies must do more to raise awareness of options and to make the transfer, including any retraining and skills development, as easy and as smooth as possible. That point was made in my own proposed amendment but also, thankfully, in Sarah Boyack’s and in the WWF briefing for the debate.
It is also self-evident that any just transition will require both of Scotland’s Governments to play their full, active and collaborative part, alongside local government. The UK CCC was unequivocal on that point. Bluntly, this cannot be yet another issue that gets sucked into a self-reinforcing, and ultimately self-defeating, arm wrestle over the constitution.
Neil Gray is right to challenge UK ministers over support for the Scottish cluster and development of carbon capture, usage and storage. At the same time, he needs to acknowledge his Government’s consistent failure to meet its climate targets and its inability to detail the action that it believes will get us on track to meet those targets. That detail would be helpful in relation to the energy transition fund for example. What are the year 1 objectives for the £20 million? How many workers will benefit, and in what ways? What are the predicted investments in future years? We need that detail not only to address the UK Climate Change Committee’s calls but to avoid the impression that that is more smoke and mirrors.
Key to a just transition is the creation of new green jobs. We cannot afford to leave people and communities behind. Achieving that will require plans that are radical and credible and lock in genuine collaboration between the UK and Scottish Governments, local government and the affected sectors.
As I said in the previous debate on the topic in 2021, change is unavoidable, but it is only with detailed plans and proper resourcing that it can be done in a managed and, most important, just way.
We move to the open debate. I remind members that speeches should be up to four minutes. We do not have any time in hand. Therefore, although members are absolutely entitled to choose whether to take interventions, any intervention must be absorbed in the member’s allocated speaking time.
I am pleased to be able to speak in this important debate and to remind members that our oil and gas sector, while vital to the north-east, has played—and continues to play—an important role across my Highlands and Islands region.
Yesterday, if I had looked out of the window of my home overlooking Scapa Flow in Orkney, I would have seen the tanker Aretea berthed at the Flotta oil terminal, the Pacific Ineos Grenadier at anchor and the Eagle Balder and Pacific Treasures involved in a ship-to-ship transfer, supported by local tugs Freyja, Thor and Odin. I would also have seen the platform, the Safe Caledonia, which is now a familiar sight in Scapa Flow.
One of my earliest memories of Orkney, from 1979, is of an oil rig in Scapa Flow. That was at the start of the oil boom, and throughout the past four decades, the oil has flowed through Flotta, and the tankers, including some of the largest in the world, have been regular visitors.
The oil industry is a vital part of Orkney’s economy, providing well-paid and highly skilled jobs and supporting a wider supply chain. It has gross value added of £110 million and supports 167 direct jobs and 279 indirect jobs, with those in turn supporting at least a further 175 local jobs in the islands. The supply chain includes many businesses that also support Orkney’s growing renewables sector. The two highly skilled, highly successful industries work hand in hand, complementing each other, not in competition as some might have us believe.
Across the Highlands and Islands, according to Offshore Energies UK, the sector has GVA of £209 million and supports the jobs of more than 1,500 people. It was in the Highlands, at yards such as Ardersier, Kishorn and Nigg, that the oil boom was facilitated by building the rigs that extracted the oil. Cromarty Firth port has been and will continue to be a vital facility as the opportunities of the green freeport—created by both the UK and Scottish Governments working together—are taken.
The sector is vital to Shetland, where the Sullom Voe terminal and the Shetland gas plant are both still major employers, and where decommissioning at Lerwick Port Authority’s Dales Voe facility is well established. It is a site that I have visited on a number of occasions.
The opportunities for Shetland, and for the wider Highlands and Islands, are not in the past. According to Wood Mackenzie’s 2018 report, the west of Shetland is the “place to be”, with abundant oil and gas reserves. There are opportunities for decades to come not just to support local jobs in Shetland and the wider sector but to help the United Kingdom meet its energy needs.
T hat is vital, because oil and gas will continue to play a part of our energy mix for years to come. By ending domestic production early, we risk making the United Kingdom more reliant on more polluting foreign imports, and at a cost of £1,100 to every person by 2030. However, that seems to be a price worth paying for some in this chamber, who are desperate to be seen doing something virtuous regardless of the damaging consequences.
We know that the Green tail is now wagging the yellow SNP dog, and that it is now too feart to stand up to its militant Green bedfellows, or to stand up for Scotland’s oil and gas workers. Labour has no such excuse. By talking up the ending of domestic production for good, Scottish Labour appears willing to let down the Scottish workers and the communities who depend on our oil and gas sector.
The Scottish Conservatives value our oil and gas sector and, with new opportunities in exploration, it can continue to play a vital role in the years to come. We will always stand up for the industry, the workers who rely on it for their employment and the communities that it supports.
For over half a century, our offshore energy sector has been an essential part of our economic and environmental prosperity. It has also ensured secure energy supplies across the UK.
However, in its “Just Transition Review of the Energy Sector”, EY forecast a marked and continued decline in North Sea oil and gas production, with around 80 per cent of production coming from already sanctioned fields and less than 20 per cent from new developments. New discoveries will be smaller and harder to extract.
EY also reports that the industry supports 57,000 jobs in Scotland and is responsible for £16 billion of gross value added or 9 per cent of total Scottish gross domestic product. That contribution will reduce as the decline continues.
The term “just transition” refers to a fair distribution of burden and benefits of the transition to a low-carbon economy. It tends to be used in the context of workers. The 2021 “UK Offshore Energy Workforce Transferability Review” by Robert Gordon University highlights that “around 200,000 skilled people” are likely to be required to support activities in the UK offshore energy sector, and
“Over 90 per cent of the ... oil and gas workforce have medium to high skills transferability and are well positioned to work in adjacent energy sectors”.
Around 50 per cent of the jobs in the sector in 2030
“are projected to be filled by people transferring from ... oil and gas jobs to offshore renewables roles, new graduates and new recruitment from outside the existing UK offshore energy sector”.
I commend the Scottish Government’s support of the development of the skills passport that is proposed in the report.
The “Draft Energy Strategy and Just Transition Plan” sets out the future energy pathway for Scotland, including offshore wind. Earlier this week, I visited the Seagreen offshore wind farm, a joint venture that will deliver the world’s deepest fixed offshore wind farm later this year. In the 10 or so minutes that we were alongside a turbine being assembled, the nacelle—or cog—was lifted from the Wind Orca jack-up vessel on to the tower, demonstrating the pace of progress while, crucially, using not only a blended workforce but also recycled assets, including the Seagreen operations base, which had formerly been home to an oil and gas company in Aberdeen.
Of course, there is still much to do. The RGU Energy Transition Institute report “Making the Switch” highlights that to grow the industry in the north-east will require rapid, targeted investment. Getting that right has the potential to secure the region’s economy as a global energy hub. However, if we move too slowly, we risk a hard-hitting economic decline. I hear that concern on a regular basis in my engagement with the sector, and I agree that that must be avoided at all costs.
There is absolutely no doubt about the Scottish Government’s commitment to net zero. I was pleased to hear the detail on that in the cabinet secretary’s contribution earlier in the debate; however, I still seek reassurance on timescales, as I set out earlier.
A debate on oil and gas cannot pass without reference to the hundreds of billions of pounds that have flowed from the sector to the UK Treasury. It is deeply disappointing that, in the light of that enormous contribution, the UK Government chooses not to match the—
“the vital role that oil and gas plays in Scotland’s energy mix and in supporting tens of thousands of Scottish jobs, particularly in the north east”.
Liam Kerr was right to speak about the demand and the need in part to control and service that demand. We know that, when people lose their power, it becomes a frightening experience for them—perhaps even more so in this day and age than it was back in the 1970s during the three-day week.
Let me help Liam Kerr with his request about the North Sea’s developing future. The North Sea will not be turned off today or tomorrow, or, indeed, in future decades, because of what is already out there. When I say “out there”, I am not talking about the stuff that sits under the ground; I am talking about the brilliance, imagination and entrepreneurial skills of the workers, supported by strong trade unions, who are fighting to ensure that they do not repeat history and go through what mining communities and industrial communities went through under Margaret Thatcher.
We have heard about the need to transition to green technology and a green-based economy. We need to do that for many reasons. First and foremost, it is because of the planet and the fact that we owe our young generation a future in which they can live, contribute and enjoy the good things that we have today without having to hand over too much.
I am grateful for that intervention, because good faith suggests that one should welcome interventions, as that is the purpose of debate. However, let us talk about the previous 13 years. Over the past few years in particular, we have seen rising energy prices and families concerned about how they heat their home and feed their household. That is the responsibility of two Governments—one that sits down south and one that sits in Scotland.
I am not going to go back on what Jonathan Reynolds has said, and nor will I apply the cliff edge that people have spoken about. The Labour Party, both north and south of the border, is here to defend our communities, and that includes how they get energy, where they get food and the quality of their housing. It is also about looking after the people who are currently working on oil rigs out in the North Sea and allowing them to transition to new, highly skilled jobs.
I compliment Neil Gray on his comment about the grid. We need to look at the fundamental supply of power across the United Kingdom, and we need to do it in a developing, logical and technological way. The Labour Party will invest in that approach and allow it. In previous debates, Neil Gray has rightly raised the number of energy projects that are stalled at the moment because they cannot connect to the grid. Our communities need a good power source.
In the incredibly short time that I have left, I will raise the point that I always raise in such debates, which is about the importance of the nuclear sector in providing a baseload for the power supply. Torness, in my region, has produced enough low-carbon electricity to save the equivalent of 84.8 million tonnes of CO2
, which is like taking every passenger car off the road for more than a year.
Burning fossil fuels is the biggest source of global carbon emissions. We have to tackle that to deliver net zero but, at the same time, there is no point in pretending that oil and gas will not be an important part of our economy for decades to come. The task then is not just to reduce demand; it is to ensure that the supply is as low as possible. That is the practical approach that gets us to net zero while protecting jobs and giving our communities a future.
Those of us with the privilege of representing the north-east know how important that is. The oil and gas sector supports about 90,000 jobs in Scotland, a significant proportion of which are in the north-east. Those jobs mean that people can provide for their families and spend their pay packets in local businesses, and they contribute to almost 10 per cent of Scotland’s GDP. Attempts to fast-track an end to the sector will only inflict unnecessary harm on those workers, their communities and Scotland as a whole. That is why reducing demand must come alongside a just transition.
The renewables sector is one obvious route. A recent report from Robert Gordon University found that 90 per cent of oil and gas workers have medium to high skill transferability and are well placed to work in adjacent energy sectors. Therefore, I welcome the UK Government joining other North Sea nations in committing to quadrupling offshore wind generation by the end of the decade.
Decommissioning has great potential, too. The North Sea Transition Authority estimates that annual spend will rise to £2.5 billion per year over the next two decades. On top of that, there is the opportunity to recycle critical minerals, especially from renewables, back into the economy. That will all add up in helping to sustain jobs and supply chains.
However, oil and gas workers face barriers, such as difficulties in having their skills recognised in other sectors, the cost of retraining and the lack of information on opportunities to do so. Therefore, it is welcome that reskilling is one of the goals of the UK Government’s North Sea transition deal, alongside efforts to help the oil and gas sector to reduce emissions. As I have noted previously, those efforts would be helped by electrifying oil and gas platforms, such as through tying them to offshore wind platforms. That would further lower the carbon intensity of North Sea production, which is already below the global average.
No one who is serious about net zero should be arguing for higher carbon imports—a policy that could actually spur greater output from more carbon-intensive basins. The public agrees; a recent poll found that 75 per cent of people want our demand to be met by domestic supply. The Greens do not agree, though; they want our oil and gas sector to be shut down as quickly as possible. The SNP is not far behind them, as it backs a presumption against new oil and gas projects. Labour has now joined those parties in being out of step with public opinion and environmental principles.
Instead, those parties should recognise that our oil and gas sector is part of the solution, with the likes of BP and Shell committing tens of billions of pounds to net zero initiatives. By working with them, we can unlock even more investment, cut emissions further and provide the secure future that workers need.
.] This is really serious. When we talk about a just transition, we should be clear that the north-east is not the only place that will be affected.
More than that, a just transition means expanding renewable energy generation in other parts of Scotland, including in Dumfries and Galloway, which is already playing its part in that regard through onshore wind, solar, hydroelectric power from the Drax hydro scheme in Galloway, for example, and micro hydro schemes, including the one at Penpont.
I am sorry, but I am really short on time, so I will not take any interventions. These wee debates with four-minute speeches dinnae really give us enough time to do so.
Two weeks ago, at a Parliament drop-in, I heard that 40 per cent of homes in Dumfries and Galloway are off grid, so assisting in a just transition to renewable energy for heating houses is extremely important.
As we have heard, a just transition does not entirely eradicate the need for fossil fuels and petrochemicals. Eighty-seven per cent of our oil and gas is currently used for transport, electricity and heating, and only 40 per cent is used for plastic production. However, plastics are essential, and they include essential items such as heart valves and joint replacement components that are used in total hip and knee replacements. We need to be careful about how we manufacture our language when we talk about the just transition for other products.
That made me think about personal protective equipment—masks, aprons and gloves—that was used during the pandemic. That comes from our petrochemical industry’s manufacturing, as well. I ask the minister to reaffirm in closing that the Scottish Government recognises the diversity of oil and gas products, and that that recognition will continue to be part of the Scottish Government’s approach.
Scotland is an energy-rich nation with significant renewable energy resources, a highly skilled workforce and innovative businesses across a globally renowned supply chain. Analysis shows that the number of low-carbon production jobs is estimated to rise from 19,000 in 2019 to 77,000 by 2050 as a result of the just energy transition. That means that there will be more jobs in energy production in 2050 than there are now. By continuing to make the most of our vast renewable energy resources, we can deliver a net zero energy system that also delivers a net gain in jobs in Scotland’s energy production sector.
There is huge potential for Dumfries and Galloway to benefit from renewable energy investment, including through the potential of fixed or floating offshore wind technology at a site known as SW1 in the Solway Firth. The community development trust in Eyemouth in the east part of my region has visibly benefited from offshore wind development. The community saw £50 million of investment before a turbine was even placed on the seabed, and many highly skilled jobs were created.
I am interested in how the benefits that have been witnessed in Eyemouth could be replicated in Stranraer. Fifty million quid could potentially come to the community, and people could choose which projects could be developed before any fixed or floating turbines are even in the water. However, part of the issue is engaging with the communities to see how that can be achieved. The option of a potential framework for community engagement could be considered. I have had conversations with South of Scotland Enterprise and it is interested, as I am, in whether such a framework is worth pursuing.
Today’s debate is, of course, on the most critical issue of our time. It is worth spelling out what the overwhelming scientific consensus says will be in store if we do not alter our ways of generating, using and exporting energy.
In March this year, the Intergovernmental Panel on Climate Change published its final report in a series of six reports. That was the culmination of nearly a decade of study by hundreds of researchers. It is brutally clear. It states:
“Every increment of global warming will intensify multiple and concurrent hazards”.
The clearest path to keeping global temperatures within safe limits is to rapidly phase out fossil fuels. The researchers say that that is needed in the near term, that renewable energy must be urgently prioritised, and that some of the consequences of not heeding that advice are “increasingly irreversible losses” across ecosystems on land and sea, increasingly insufferable heat in urban areas and in our oceans, and a starkly different future for our children and grandchildren. The scientists say that our climate’s future depends on our choices now and in the near term.
Scotland is not hiding from the seriousness of those choices. The Scottish Government’s draft energy strategy sets out a way forward.
I am pleased that the Scottish Government will no longer support unlimited recovery of fossil fuels. The development of the Cambo field has been halted, and the UK Government must now use its reserved powers to do the same for all new licences, including for Rosebank.
I do not have time.
There is no long-term future in North Sea oil and gas. Research that was undertaken for the Scottish Government makes it clear that, under all scenarios, the North Sea is a rapidly maturing basin with little prospect beyond the middle of the century. A responsible Government and a responsible Parliament must grapple head on with that challenge and secure a well-managed, supported and just transition for all who work in the sector, and particularly for those communities in the north-east. That also means pushing ahead with site-specific just transition plans for Scotland’s largest industrial polluters, such as Mossmorran in Fife.
The decline in fossil fuels is irrefutable. Our choice now is whether to accept a slow withering of skills and expertise or to grasp the opportunity to maximise the expansion of jobs in renewables and all the supporting sectors. However, the Tories want us to ignore the writing on the wall for fossil fuels. The power over our future still lies in the hands of a UK Government that retains control of licensing and would prefer to sell out the north-east’s chance of a stable transition to maximise short-term shareholder profiteering.
There is no guarantee that an incoming Labour Government would be any better. Keir Starmer’s support for banning new licences for oil and gas in the North Sea is very welcome, but Anas Sarwar has said that Labour might still allow the 500 million-barrel Rosebank field to go ahead. That is an impossible circle to square.
We lie at a critical juncture. Less than two years ago, we all united over COP26 in Glasgow, and we committed to keeping 1.5°C alive. From what I have heard in this debate, there is a consensus—at times an uneasy one—among four parties in the Parliament that we need to move beyond oil and gas and that we can do that in a just way that takes workers with us and puts them at the fore. The only outliers in the Parliament are the extremist Tories, who deny the reality of climate change. However, the time for urgent climate action is now. There is no credible long-term future in oil and gas, and it is our duty as politicians—credible politicians—to map out the alternative.
It might come as a surprise that I actually agree with some of the Conservative motion. I agree that
“the Parliament recognises the vital role that oil and gas plays in Scotland’s energy mix and in supporting tens of thousands of Scottish jobs, particularly in the north east” and that it
“condemns Labour Party plans to ban new production from the North Sea”.
I agree as someone who lives and works in, and represents a part of, the oil capital of Europe. I know all too well the benefits that the industry has brought to my city, and I look forward to when it transitions to being the energy capital of Europe. We are all aware that, even though the major use of oil and gas is to generate energy, petroleum is used for many other essential everyday items, and that we will continue to need petroleum for our household products, beauty products, medicines, clothing, construction, furniture, electronics, agricultural products, healthcare and even children’s toys.
Deirdre Michie, the former chief executive of Oil & Gas UK, which later became Offshore Energies UK, said at the first meeting of the cross-party group on oil and gas that I attended that there will be a sweet moment when the use of renewables increases and oil and gas use reduces to a point where both become equal. Ms Michie said that that is when we will experience a true transition, and I could not agree more. That is what we should all be working towards.
On the subject of a just transition, I want to ensure that the staff who have worked in oil and gas—as many of my family members have—are supported in a just way, should their employment in oil and gas cease. Scotland is an energy-rich nation, the oil and gas industry has made a vast contribution to our economy, and its workers are some of the most highly skilled in the world. However, Scotland’s oil and gas basin is now a mature resource, and the Scottish Government is responsibly taking action to ensure that the sector and the community that it supports are supported in a transition to a cleaner, greener energy system. Our oil and gas workers and their vital skills are essential to the transition. Workers and trade unions must be at the heart of everything that the Scottish Government does.
Research from Robert Gordon University highlights that a majority of offshore workers could be delivering low-carbon energy by 2030 and that more than 90 per cent of the UK’s oil and gas workforce have medium to high levels of skills transferability, which means that those workers are well positioned to work in adjacent energy sectors. RGU’s “Making the Switch” report highlights the potential for the north-east region to become a net zero global energy hub that supports existing oil and gas roles into the renewables and low-carbon roles of the future.
On Monday, I visited the Seagreen offshore wind farm with my colleague Audrey Nicoll. I got chatting with a Windcat skipper, who was a fisherman prior to working in the renewables industry. He then went to work in oil and gas and then went back to fishing, and he is now working in the renewables sector. That is a just transition and a prime example of how easy it can be for skills to transfer.
The Scottish Government is absolutely committed to a just transition and to ensuring that we take workers with us on our journey to net zero. We need to take the sector with us and recognise that we will still require petroleum. Even though that requirement will lessen, we need to ensure that that is locally sourced. We should be in no doubt that it is the highly skilled workforce in the current oil and gas sector that will be best placed to transfer over to the renewables sector in a just and fair manner. They will be at the forefront of delivering our net zero targets.
There has been a pretty serious attempt to have a very divisive debate this afternoon, but I am nothing if not a consensual politician. I will therefore start by saying what I genuinely agree with the opening Conservative and Government speakers on.
Liam Kerr is absolutely right to say that the oil industry is an vital industry to Scotland. It is vital for the jobs and the income that it provides, but the oil itself is also vital. As other contributors have pointed out, it is vital not only as an energy source but as a critical raw material for pharmaceuticals, medical devices, dyes and many other products that we need in our day-to-day lives.
Indeed, that is exactly why we need to think very carefully about how we use the limited oil that we have left. As I pointed out in my intervention, we have extracted 75 per cent of our extractable oil resources. It is simply not possible to open the taps and continue the oil for ever. It is finite and it is going to end. Even without a climate crisis, that would be the reality that we would have to contend with.
I agree with Neil Gray that, as we face the inevitable transition, we must not abandon the workers and repeat the mistakes of the past. We have seen that time and again, especially in energy sectors. When we stopped using coal, we saw the miners plunged into penury. In the transition of heavy industries such as steel, we have seen utterly callous decisions from previous Tory Governments that left those skilled workers on the scrap heap. We cannot afford to do that.
The reality is that this debate is not about North Sea oil’s past but about its future. As Liam McArthur said, change is unavoidable. The Tories came to the chamber today claiming that this was a debate about economic realities. Well, let me mention some of those. The Tories talk about being able to import oil, but the reality is that 60 per cent of our gas was exported last year, and 80 per cent of our oil. That fact does not stand up.
I will, in a moment.
If it is about price, Greg Hands himself said that the volume of gas that we have simply would not impact global gas prices.
The Conservatives have also argued about resilience. I gently remind them which party it was that sold off the gasometers and reduced our gas storage to days while continental Europe held weeks if not months of supply. It was their Government and their decision, so I am afraid that their economic arguments are empty, devoid of any factual basis and without any context.
I am happy to take the intervention.
Ultimately, those 16 billion barrels of oil are simply not enough to deliver continued supply to offset any of the impact on global prices that they claim. I am happy to go away and do a comparative fact check, but the reality of the figures that I have in front of me is that 60 per cent of our gas and 80 per cent of our oil was exported. I am happy to go away and compare those figures. [
However, that is not the only point. We have heard misquote after misquote. To use—[
To use a phrase that might have inspired some of the political arguments this afternoon, there have been many aspects of fake news. There will not be an oil shut-down or turn-off. To quote Johnny Reynolds—I was in the room when he said this—we are going to continue to extract oil well into the 2050s. The debate is about North Sea oil’s future, not its past. It is about 50,000 jobs and £28 billion of investment.
A just and planned energy transition not only will recognise the role that the oil and gas sector plays in Scotland but will seek to harness the expertise, investment capital and workforce in that sector. The contribution that the skilled oil and gas workforce makes to Scotland’s present and future energy security is fundamental.
Right now is our opportunity. As Jackie Dunbar said, the sweet moment when we can bring stable employment and prosperity for generations to come is on the horizon. The north-east of Scotland is at the heart of that and it will remain our energy capital, but this time round there is even more potential for that prosperity to reach all over Scotland. Orkney is already leading the way, as we heard from Liam McArthur and Jamie Halcro Johnston, and Emma Harper talked about some of the opportunities in the South Scotland region.
In his considered speech, Mark Ruskell said that oil and gas production will happen until at least the middle of the century. Along the road, there will be peaks and troughs in that. We already have a sense of the pressures that workers face from the survey of more than 500 workers that I launched while I was on the back benches and the survey that we did as part of the energy strategy engagement. Unions and interest groups are doing similar surveys as well.
We saw in 2016, in particular, what can happen to workers when the oil price dips. For many people I know in oil and gas—constituents, friends and neighbours—that was the second or third time that they had faced cliff-edge redundancy. With North Sea oil and gas fields maturing, it is getting harder and more costly to extract from them, and the workers know that their product is not as competitive as it once was. Those workers are looking to us to demonstrate the pathway to a more secure energy future that is not vulnerable to global politics or market shocks. Every householder who is trying to keep their home warm wants the same.
Transition is not a choice; it is a necessity. That is being demonstrated not just by Scottish Government policy, but by the business decisions that oil and gas companies are making, as Jackie Dunbar and Audrey Nicoll deftly demonstrated.
Those figures do not take into account the fact that our supply chain works across the oil and gas sector and renewables. We estimate that there will be 77,000 jobs in low-carbon energy by 2050. That is why we need planning. With that, we can absorb the 57,000 skilled oil and gas jobs and create a few thousand more. In fact, the challenge will be to find enough people who are skilled up and trained to service all the potential that we have in Scotland. I know where Mr Kerr is coming from, but the fact is that that is why we have to have a just transition plan in place.
I will not.
We also need action by the UK Government, which holds key policy levers for delivering a net zero future, including reform of the electricity markets; access to the electricity grid, which Martin Whitfield mentioned; and decarbonisation of the gas grid, which I asked Liam Kerr about. I was particularly interested to hear how much hydrogen he thinks the UK Government might put into that. A further lever is track 2 status for the Scottish cluster and the Acorn project, which I know my Scottish Conservative colleagues also want to see. The Climate Change Committee, which Liam McArthur mentioned, has said time and again that, unless we have carbon capture, usage and storage in Scotland, we will not meet our net zero targets.
People need to see our energy choices working for us. One thing that we should never see again is the UK Government squandering Scotland’s energy wealth in the way that it did with our oil and gas revenues. Sarah Boyack was right to talk about community benefits. I am actively working with stakeholders on how we can make community benefits hit households in terms of their energy security.
Scotland already exports 20 terawatt hours of renewable electricity to the rest of the UK, and we have even more renewable energy potential. The process of meeting that potential will largely be powered by many of the people who are working in oil and gas.
Our focus must be on meeting our energy security needs, reducing emissions—
—and ensuring that we bring about a just transition for our oil and gas workforce. Our approach is pragmatic, realistic, responsible and worker focused. The Tories are not planning for the future. We are, and we will take the oil and gas workers with us.
I feel honoured to be representing the people of the north-east in this debate and standing up for those jobs in the north-east. It is clear from this debate that only the Scottish Conservatives are offering clear, unambiguous support to our oil and gas industry and the north-east of Scotland.
The SNP-Green devolved Government is against oil and gas exploration in the North Sea and would rather that our energy needs were met by imports from abroad, with supplies coming from places such as Russia. Its presumption against oil and gas exploration in the North Sea means that our oil and gas industry faces a cliff edge. The SNP-Green Government seems to be intent on taking Scotland apart brick by brick, rather than supporting business. The Government’s tone-deaf response to the needs of our economy is risking our economic recovery and will have a direct impact on the money in the pockets of everyone in Scotland during the cost of living crisis.
Labour is no better. There are clear divisions on the policy in the party north and south of the border. In media interviews this week, Anas Sarwar was desperately back-pedalling, telling us that what Keir Starmer meant was different from what he actually said, but the oil and gas sector and people in the north-east will not be fooled.
I will later, if I have time.
The Labour position is a joke. It claims to want to support the oil and gas sector, but it will not allow new developments. It is a classic case of sitting on the fence as Labour tries to appease its friends at Just Stop Oil and the trade unions, which call its stance naive. Let me break the news to Labour members. Without any new developments, we will run out of hydrocarbons well before we need to, which will mean that we rely more on imports and have to throw thousands of jobs on the scrap heap.
“We are importing from countries where they do not necessarily have the same commitments to the climate goals that we have. We are exporting our jobs and we are leaving the country poorer as a result.”
That is a result of the actions that other parties in the Parliament are taking.
As my colleagues have highlighted, the Scottish Conservatives are the only party with a clear message of support for our oil and gas sector and for the tens of thousands of workers and communities who rely on energy production for their livelihoods and wellbeing. We should make no mistake. While we still need to heat our homes, we will still need oil and gas. While we still have an inadequate electric charging infrastructure, we will still need oil and gas. While we still run 50-year-old diesel intercity 125s between our cities, we will still need oil and gas. While we still need oil and gas, it is better for our economy, our environment and our jobs that we produce it in this country.
I will come back to Daniel Johnson if I have time.
Liam Kerr made the excellent point that it is the energy companies that are using oil and gas income to pay for our energy transition through billions of pounds of investment—companies such as BP, Shell and Equinor. Audrey Nicoll and Jackie Dunbar mentioned the Seagreen wind farm, which they visited. That is being built in partnership with TotalEnergies, which is using income from oil and gas to build the energy of the future. That shows the importance of traditional oil and gas companies to our transition, which the cabinet secretary seems not to understand.
Jamie Halcro Johnston spoke well of the highly paid, highly skilled jobs that our economy so badly needs and the opportunities to the west of Shetland that will mean so much for the local community. We cannot just throw them away.
Audrey Nicoll mentioned the £500 million just transition fund, but she failed to mention the £16 billion from the UK Government North Sea transition deal. Gillian Martin talked about CCUS, in which the UK Government has invested more than £40 million while the Scottish Government has zeroed that budget.
We know that we need more investment in green energy production—that is one of the reasons why we are in favour of pursuing nuclear power—but we need to do that in partnership with industry by working with businesses instead of ignoring them, and we need to work with communities throughout the north-east to ensure that they lead on the issue, because they know best. If we do not listen to them, we will go down a path that will lead to job losses and economic decline in the north-east of Scotland.
I make it very clear that we support new oil and gas exploration in the North Sea while there is still a demand for hydrocarbons. We believe in a just transition for the creation of green jobs. We support funding for any oil and gas worker who wants to reskill in renewables. We support the 90,000 workers who depend on the sector. Finally, we are the only party that will support the towns, communities and people of the north-east of Scotland.