Our best hope of a secure economic future involves changing direction
A managed transition away from North Sea oil and gas is the only responsible course of action to secure Scottish jobs, writes Patrick Harvie.
Since oil prices started to fluctuate in 2014, we’ve been hearing regular news about mass layoffs in the oil and gas industry. This insecurity in the sector has had devastating consequences for thousands of people and families who have made their living from working on oil rigs, refineries, research centres and power stations.
For many, it’s hard to see a future for our country without the oil and gas industry. The Scottish Greens have been consistently arguing for a controlled transition to sustainable energy alternatives. This is not just because we are concerned about the catastrophic environmental consequences our society faces if we keep burning fossil fuels. It is also because fossil fuels are a finite resource, and the industry and jobs that we’ve built on it will only last until the cost of squeezing out the last drops exceed the profit to be made. And that day is much closer than many think.
Just this week Wood Group announced that the slump in oil prices has prompted the loss of more than 5,000 North Sea jobs since December. The oil services company is still making hundreds of millions in profit but has cut its workforce of around 41,000 worldwide by 13 per cent.
Analysts say there’s little prospect of short term improvement. This ongoing uncertainty is unacceptable for workers, the communities of the North-East and the Scottish economy. Companies like Wood Group are famed for being “dynamic in downturns”, which sadly means people can lose their jobs overnight.
The companies operating in the North Sea are profit-heavy multinationals and they exploit the UK tax system to subsidise drilling elsewhere. They cannot be allowed to drive our agenda. We need to plan now for ways to replace the jobs that North Sea oil has generated over the past half-century.
Our best hope of a more secure economic future undeniably involves changing direction toward a diverse and truly sustainable economy. That means wind, wave and tidal energy, but it also means retrofitting housing, district heating and reforesting to capture carbon and produce new products. Equally important is the chance this new kind of economy gives us to enhance skills, encourage innovation and increase supply chain opportunities for entrepreneurs and Scotland’s economic backbone: Small and Medium-sized Enterprises.
Research carried out for the Scottish Greens, due to be published this week, shows how this post-fossil fuel alternative can create far more employment than will be lost over the next 20 years. Our projections are based on conservative models, so this will be a credible contribution to the debate about Scotland’s future.
At the moment, there are 156,000 workers employed in fossil fuel extraction in Scotland, of which one third are export-oriented jobs. Our research shows that by focusing on decommissioning and alternative industries, we could have over 200,000 jobs by 2035. We’d keep key assets such as Grangemouth and retool the site to focus on synthetic gas. We’d continue to extract some of the remaining oil, but at a much slower rate and with a focus on maximising revenue.
The Scottish Government could position Aberdeen as a centre of expertise to decommission not only the North Sea, but oil infrastructure globally. In the coming decades we are likely see closure and removal of rigs and pipelines around the world. Scotland has the ability to take a leadership position, by identifying the engineering, legal and financial services that will be in demand.
With offshore wind we have the option to bring much of the infrastructure into the public sector, positioning ourselves as a global hub, pushing the supply chain to open factories in Scotland at our underused ports.
Wave and tidal energy still need significant research, development and testing, and it’s an area the Scottish Government has failed to properly back. There are great costs involved in developing this sector, and the long term commitment that’s needed requires certainty that the market alone cannot provide.
Scotland has a very low percentage of woodland cover compared to other countries in Europe. By expanding forested areas we can aid carbon capture and provide wood products for buildings and infrastructure, but also add sustainable biomass to our energy mix and develop alternative chemical feedstocks.
And by retrofitting our housing stock, we can create thousands of jobs while cutting fuel poverty and carbon emissions. My colleague Alison Johnstone successfully pressed Finance Secretary John Swinney on this point in a Holyrood committee, getting him to commit to making it a national infrastructure priority.
The kind of upscaling and diversifying we’re talking about will benefit Scotland’s communities through training opportunities, skilled jobs and contracts for local companies. It will help spread job prospects to all areas of Scotland, so we rebalance our economy beyond our biggest cities.
There are big challenges ahead and the need for a clear vision has never been greater. With bold ideas we can unlock Scotland’s potential.
Patrick Harvie MSP is Co-convener of the Scottish Greens and is a member of the Scottish Parliament’s Economy, Energy and Tourism committee