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Chamber

Meeting of the Parliament 09 January 2013

09 Jan 2013 · S4 · Meeting of the Parliament
Item of business
Oil and Gas Sector
I like to begin with a note of consensus when I can—Alex Johnstone looks sceptical already.

I agree strongly with all three members who have spoken on the point about the safety issues around the industry—we can all agree on the importance of safety as regards people and the marine environment. Despite the fact that we will disagree on the future that we want to see for the industry, I hope that everybody in the chamber would come together in paying tribute to those who work hard to protect the safety of people and of the environment.

I want to give credit where it is due to the Scottish Government. The Scottish Government has a clear focus on its renewable energy targets and I have consistently welcomed that. For the first time last year, we saw a £1 billion investment in renewables in Scotland. There is high confidence that the 100 per cent target for 2020 can be achieved and that there will be big increases for the marine sector after that so that we can export efficiently to help to decarbonise Europe’s electricity production.

However, that is not the whole story in terms of decarbonising our energy system. Renewables cut carbon emissions only if they replace fossil fuels. We need to reduce demand. Not only investment in renewables is necessary if we are serious about climate change, but disinvestment in the high-carbon industries and sadly the current minister seems not to agree with that. Indeed, since he took on the job I have only ever really noticed the fire come into his eyes when he talks about another 40 years of oil and gas extraction in Scotland.

Under the Scottish National Party Government, there has been an increase in opencast coal extraction, a relaxed attitude to unconventional gas, coal-bed methane and fracking potentially, support for deepwater drilling and now an oil and gas strategy that is focused on squeezing out every last drop from the North Sea.

I refer members to the document that I mention in my amendment, the International Energy Agency’s “World Energy Outlook 2012”, which concludes that

“no more than one third of proven fossil fuel reserves can be consumed”

prior to 2050 if the world is to achieve the goal of constraining climate change to 2°C unless carbon capture and storage technology is widely deployed. As I mentioned earlier, CCS cannot be deployed in relation to uses of fossil fuel for transport and heating, for example, which is where most of our oil goes.

The International Energy Agency is generally a conservative body—it is not where we would look to if we wanted to find an overly alarmist approach. The next Intergovernmental Panel on Climate Change report seems likely to focus minds on just how much tougher the 2°C target is than was previously thought.

There are three ways of resolving that contradiction. One is to say that domestic production is necessary in order to reduce our reliance on imports. Pretty much every country that has any fossil fuel to extract domestically will use that argument—indeed, they are using it—with the result that nobody budges and we carry on putting more fossil carbon into the global economy and therefore into the atmosphere.

The second option in response to the contradiction is to say that we need to continue our reliance on fossil fuels for a while to bridge the gap before we transition properly to a genuinely low-carbon economy. That argument boils down to saying, “Lord, make me chaste—but not yet.” In fact, it does worse. Increased production will help tendencies to keep prices down, so it will delay the transition towards the low-carbon economy that everybody says that they want.

The third argument is the one that the minister used. CCS is talked about as the essential technology to take fossil carbon back into the ground after we have consumed fossil fuels. As I have made clear, we cannot apply that approach in relation to the fossil carbon that comes from the oil industry. That is simply not an option.

In the same item of business

The Deputy Presiding Officer (Elaine Smith) Lab
The next item of business is a debate on motion S4M-05310, in the name of Fergus Ewing, on oil and gas—the success and opportunities. The debate is oversubsc...
The Minister for Energy, Enterprise and Tourism (Fergus Ewing) SNP
I welcome the opportunity to pay tribute to and recognise the success of Scotland’s oil and gas sector. The sector is one of Scotland’s biggest economic succ...
Neil Findlay (Lothian) (Lab) Lab
Will the minister say what the current rate of UK corporation tax is on oil and gas and how much revenue would be lost if a 10 per cent rate were applied?
Fergus Ewing SNP
I do not look at the figures in that way. I will deal with the tax issue in due course.Since large-scale production commenced in the North Sea in the 1970s, ...
Patrick Harvie (Glasgow) (Green) Green
Will the minister take an intervention?
Fergus Ewing SNP
Not just yet.Linking CCS with enhanced oil recovery could accelerate its development and unlock 3 billion barrels of hard-to-reach oil—worth £190 billion—fro...
Patrick Harvie Green
I am sure that the minister will accept that even if CCS technology can be brought to maturity, it has no effective role to play in relation to the carbon em...
Fergus Ewing SNP
No, I do not agree with that. It will allow huge reserves of oil to be extracted, which will be hugely beneficial. Frankly, I would have thought that the Gre...
Neil Findlay Lab
Will the minister give way?
Fergus Ewing SNP
I do not think so—I have too much to cover.We simply cannot afford to lose revenue on that scale, nor can we afford to lose the tax revenues, which I have de...
The Deputy Presiding Officer Lab
Minister, you really must draw your remarks to a close.
Fergus Ewing SNP
Ah, well. All I can say is that that figure must increase.I have not talked about skills, but we are working on the issue as we move towards the announcement...
The Deputy Presiding Officer Lab
I am afraid that I must reiterate that we are very tight for time. I call Rhoda Grant to speak to and move amendment S4M-05310.2 in no more than 10 minutes.1...
Rhoda Grant (Highlands and Islands) (Lab) Lab
I pay tribute to the workers who make the oil and gas industry a success. Many of them work onshore in back-up and planning roles but, given the real persona...
Fergus Ewing SNP
I am happy to assure Rhoda Grant that, as far as decommissioning is concerned, Scotland will honour her responsibilities. On taxation, we recognise that stab...
Rhoda Grant Lab
That proves the point about why we need stability and why the industry needs to know what the fiscal regime will be, should Scotland become independent of th...
Tavish Scott (Shetland Islands) (LD) LD
I begin by agreeing with the broad tenor of the minister’s remarks and thanking Rhoda Grant for her observations on decommissioning, in particular. I agree w...
Patrick Harvie (Glasgow) (Green) Green
I like to begin with a note of consensus when I can—Alex Johnstone looks sceptical already.I agree strongly with all three members who have spoken on the poi...
Mark McDonald (North East Scotland) (SNP) SNP
I know that Mr Harvie and I have different opinions on economic growth, but what would be his message to the many constituents whom I represent whose livelih...
Patrick Harvie Green
My argument would be one of transition, not about ending an industry and putting nothing in its place. It would be about transitioning to the renewables indu...
The Deputy Presiding Officer (John Scott) Con
You must close, please.
Patrick Harvie Green
The building of a Scottish public renewables company is the best priority that we could set. What a legacy to leave for future generations.I move amendment S...
Mary Scanlon (Highlands and Islands) (Con) Con
I thank the minister, Fergus Ewing, for his measured approach and commend him for his positive and constructive partnership with the Westminster Government. ...
Stewart Stevenson (Banffshire and Buchan Coast) (SNP) SNP
Yes, it is.
Mary Scanlon Con
That is the sort of misinformation that the people of Scotland do not want in the lead-up to the referendum.
Mike MacKenzie (Highlands and Islands) (SNP) SNP
Will the member give way?
The Deputy Presiding Officer Con
The member is closing.
Mary Scanlon Con
If Mr Stevenson would be quiet, I would find it easier to concentrate on my speech, Presiding Officer.
The Deputy Presiding Officer Con
I am afraid that you must close, please.
Mary Scanlon Con
In the lead-up to the referendum, it is worth noting that oil and gas revenues account for 0.7 per cent of UK gross domestic product, compared to 17.7 per ce...