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Why oil and gas production remain key in Scotland’s move to net zero future

“Let me be crystal clear about my commitment to supporting the industry make the transition that is needed and to securing jobs in the region for the long-term.

“My government is focused on achieving the fastest possible just transition for the oil and gas sector – one that delivers jobs and ensures our energy security, as well as meeting our climate obligations.

“We will not allow the mistakes of the past to be repeated.”

Those were the words of Scotland’s First Minister Nicola Sturgeon last year as she reinforced her commitment to a sector amid a homegrown revolution.

She is right – we must learn from the past. And we are. As Kwasi Kwarteng said: “This has to be a transition, not extinction.”

Oil and gas have been central to the UK’s energy needs for over 50 years, and the industry still employs around 200,000 people indirectly and directly, up and down the UK.

In Scotland alone, the offshore oil and gas sector supports around 71,000 jobs and provided around £19.44bn in general value added (GVA) to its economy in 2021.

This workforce of diverse professionals – a cohort of thousands – is also an important national resource. They have vital energy expertise that we must retain if we are to successfully transition and implement the landmark North Sea Transition Deal (NSTD) – a blueprint for harnessing our oil and gas heritage to help the Scotland and the UK hit net zero emissions by 2045 and 2050, respectively.

The NSTD, agreed at the end of March 2021, set out an ambitious plan for how the UK offshore oil and gas sector and the UK Government will work together to deliver the skills, innovation and infrastructure required to meet the UK’s carbon reduction targets.

In addition to the sector achieving net zero production emissions, the deal seeks to safeguard and transition tens of thousands of existing jobs, while creating another 40,000 new jobs by 2030, in areas including carbon capture and storage (CCS) and hydrogen production.

Less than 12 months on from this agreement, the first of its kind among G7 countries, both industry and government have made strong progress in a number of areas.

We have launched a dedicated plan to halve methane emissions by 2030, seen the selection of two ‘Track 1’ CCS projects in the North East and North West of England, whilst the Oil and Gas Authority (OGA) has conducted a successful £1m electrification competition that will further help cut offshore emissions.

“It is positive to see how much progress has been made since the North Sea Transition Deal was agreed in March last year,” Just Transition Minister Richard Lochhead MSP recently remarked. Ensuring our journey to net zero by 2045 is just and fair for everyone is critical, and the ambitious terms for the North Sea Transition Deal will be fundamental in achieving this. We will continue to engage with OGUK and UK Governments to ensure the plan for the sector is delivered.”

The sector’s progress does not stop there. Companies are proactively shaping Scotland’s lower carbon energy future – taking action into their own hands and delivering upon their net zero promise.

Take the recent ScotWind auction as an example; BP, Shell, TotalEnergies and Ocean Winds became lead applicants in the round, representing almost 50 per cent of the licences awarded. They have partnered up with renewable energy companies to lease areas of the seabed around Scotland for offshore wind farm developments to generate many gigawatts of new, clean energy.

Last week, Crown Estate Scotland also announced the proposed details of its Innovation and Targeted Oil and Gas (INTOG) offshore wind leasing process.

Developers will be able to apply to build innovative offshore wind projects connected to oil and gas infrastructure to provide electricity and reduce the carbon emissions associated with those sites, providing yet more opportunity for our companies and supply chain to support North Sea decarbonisation.



Join our Scotland’s Future expert Q+A on oil, gas and energy



Some of the same companies that are spring-boarding wind projects are also putting their efforts behind CCS, hydrogen, wave and solar too, boosting initiatives like Acorn hydrogen & CCS, renewables in Dogger Bank, the West Anglesey Tidal Energy Project, Hywind Scotland, Drax Zero Carbon Humber Projects and Net Zero Teesside.

But despite these focused energy initiatives, it is commonly accepted there will be a continued need for oil and gas resources throughout this transition – and a key role for it to play in our exciting energy future.

In every future scenario put forward by government advisors, oil and gas remains, albeit in declining amounts and lower carbon forms, a constant.

Currently, oil and gas still provide around 75 per cent of the UK’s energy, and domestic oil and gas meet around 70 per cent of UK demand. Some 85 per cent of UK households still use gas boilers, and there are roughly 32 million vehicles in UK that reply on petrol or diesel.

In Scotland alone, oil and gas make up 78 per cent of Scottish Energy consumption, and supply 91 per cent of heating needs.

So, while we still need these resources, isn’t it better that we use our own rather than have to increase our imports from abroad? Isn’t it preferable that we do this while supporting Scottish people and the local economy, rather than offshoring not only our emissions, but our jobs too?

Speaking at International Energy Week this month, UK Energy Minister Greg Hands made the case for further production – consolidating the fact that it will be needed for Scotland’s energy future. “We need continued investment into the North Sea,” he said.

“Moving to energy-secure, domestically-produced, robust, renewables, nuclear, that is our energy future in a net zero world – while still recognising the importance of oil and gas in the transition.

“All these things point towards a good, solid future for oil and gas.”


Deirdrie Michie Chief Executive Officer of Offshore Energies UK

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