Meeting of the Parliament 15 September 2021 (Hybrid)
No one, especially not the industry, denies that there is a climate emergency. We all saw the conclusions of the recent Intergovernmental Panel on Climate Change report, which underlines the consequences of historical actions and the need to take significant steps now. However, those actions must be carefully considered, and it is absolutely clear that we must avoid the temptation to impose simplistic solutions and should instead consider the science to help us to make what are tough and sometimes unpalatable choices.
The issue that lies at the very core of the debate is that there is still significant on-going demand. Members of the former just transition commission told the Net Zero, Energy and Transport Committee that just last week, and the Climate Change Committee acknowledges it under every scenario. Currently, oil and gas account for three quarters of the United Kingdom’s energy needs, and it is forecast that, by 2050, half of all UK energy demand will still need to be met by oil and gas. By the time that the Cambo oil field is scheduled to start producing, oil and gas supply will have declined by 33 per cent on 2020, but demand will have fallen by only 15 per cent. Yesterday, the cabinet secretary agreed when, in response to my question, he said:
“We have done a lot on the supply side ... we have not done enough on the demand side.”—[Official Report, Net Zero, Energy and Transport Committee, 14 September 2021; c 17.]
Indeed, this morning, on “Good Morning Scotland”, Mark Ruskell agreed, in restating that our focus must be on the demand side.
The situation is complex. About a quarter of the UK’s oil and gas goes towards manufacturing everyday products including medicines, cosmetics and household cleaners, as well as asphalt for roads and materials that are used for wind turbines and solar panels. The fact is that we are not yet at a stage where renewables can supply all the electricity that Britain needs to keep the lights on in our homes, hospitals, schools and factories.
From where should we source the oil and gas to meet that demand? We could source from abroad—we do that already. Between January and March this year, the UK had to import 56 per cent of the gas that was required to keep the nation’s homes and power stations running. It cannot be sensible to cut our own resources—it is Scotland’s oil, after all, cabinet secretary—and to become increasingly dependent on countries such as Qatar, which exports liquefied natural gas thousands of miles by ship. That is in a context in which, according to the Oil and Gas Authority, natural gas from the UK continental shelf has less than half the carbon footprint of that imported LNG.
If we offshore our responsibilities and emissions, we have no means to control them. As Sir Ian Wood said, we become dependent on countries with far less strict environmental regulations than the world-leading UK. Last year, we imported almost £3 billion in oil and gas from Russia. I cannot believe that members want to increase our exposure to, and reliance on, that regime.
If we prematurely end production, our balance of trade will suffer. Although we know that that is of no concern to the Green Party, we must all be concerned that, last year, when UK and European Union production shrank but demand grew, gas prices surged. If oil and gas costs more, that will plunge thousands into fuel poverty.
Mike Tholen of Oil & Gas UK points out that offshoring production and importing would
“cause an energy skills shortage that would decimate our ability to deliver the low carbon energy mix our members are already creating in the UK, through wind, solar, tidal, hydrogen and other greener technologies.”
That is key. The industry supports close to 100,000 jobs in Scotland—more than 60,000 in the north-east. A hard shutdown of the industry would consign the region to a bleak future and would end all the innovations that those workers are already delivering in our transition. We need people with those skills to pioneer greener energy and to develop carbon capture, hydrogen and offshore wind at scale and rapidly. Losing those skills will undermine our transition.
What of the fabled just transition—moving oil and gas workers into the renewables sector? Last week, the former head of the just transition commission, Jim Skea, said that the words “just transition” are used as “magic dust”.