Holyrood MPs rejected a call by the Scottish Green Party to hasten the early demise of the ‘economically vital’ North Sea oil and gas industry in a parliamentary debate today on jobs in the ‘new economy’.
Partick Harvie, MSP, Green party leader, called on parliament to back his motion for a ‘transition (that) can ensure a managed decline in fossil fuels captures the skills, experience and dynamism of energy workers and can generate many more new jobs in sustainable industries”.
As the crude oil price continued to slop listlessly around the $28-barrel level, Harvie was roundly and frequently criticised by Tory, Labour and SNP MSPs and the amended motion by Scottish Energy Minister Fergus Ewing, MSP, was instead approved. This stated that this Parliament:
- Recognises the challenges faced by the oil and gas industry
- Notes that the sector is still a major employer supporting a substantial number of jobs across Scotland
- understands that Scotland needs a diverse and balanced energy portfolio to provide secure and affordable heat and electricity for decades to come
- Notes that Scotland has ambitious renewables and climate change targets and is making good progress toward them
- Further notes that Scotland’s policies on electricity generation, renewable heat and energy efficiency are progressively reducing use of fossil fuels and will help Scotland in its ambitions to decarbonise electricity generation
- Believes that a successful oil and gas sector will assist with diversification of Scotland’s energy supplies and that the skills and expertise employed in Scotland’s oil and gas industry will be crucial in the future success of the sector, mobilising low-carbon technologies and maximising the economic benefits from decommissioning, and believes that it is vital that Scotland continues to ensure good stewardship of all of this country’s huge energy resources, with management of offshore resources being complementary with decarbonising the Scottish energy system over the long term.”
The Tories’ amendment proposed by Murdo Fraser, MSP, Convenor of the Holyrood Energy committee, was also defeated.
This called on parliament to welcome both the economic opportunities for Scottish businesses and the employment prospects from investment in new low-carbon energy projects, including the Beatrice Offshore Windfarm in the Moray Firth, which could create up to 5,000 new jobs – and the Hinkley Point C nuclear power station in Somerset, where three Scottish companies, Doosan Babcock, SPX ClydeUnion Pumps and the Weir Group, are preferred bidders for contracts worth more than £1.3 billion.
Attacking the Green proposal to hasten the transition from oil and gas jobs to (solely) renewable jobs, Labour MSP Lewis McDonald (Aberdeenshire West) spokes for many when he said: “Abandoning (North Sea) production wouild increase unemployment.
“The oil and gas industry is of crucial importance. It’s not a bonus or an ‘optional extra’” and he regretted the recent job losses announced by BP, Petrofac and Sparrows, as well as a 7.5% pay cut being imposed on some contractors, and the ‘offshoring’ to India of John Wood Group back-office jobs from Aberdeen.
“We need to do all we can to sustain the industry that is already there,” he added.
Fergus Ewing, MSP, Scottish Energy Minister, said: “Unless we support the North Sea industry all we can, many of these companies and workers will not be going through a ‘transition to the new economy’ but into Administration if we were to take the Green Party’s recipe.
“We need to help people through the most severe crisis the North Sea has ever seen. The oil price will recover in due course and we recognise the industry itself has the primary task of reducing costs but the workers also have enormous potential to contribute – a resource which is not presently being tapped – to costa reductions.
“We certainly want to defer a cessation of production, to extend asset working lives and we also need further clarity from the UK Government over decommissioning costs – this stalling is putting a risk deals which would bring new investment into the North Sea basin.
“And as in Norway, we also certainly need more and new tax-incentives for investment to stimulate exploration for new oil fields. For example, Faroe Oil drilled four new wells last year in Norway’s part of the North Sea, where they get a 78% tax incentive – it’s a bit like going into your local supermarket and get a ‘four for the price of one’ deal.”
Mark McDonald, (SNP, Aberdeen Donside) also raised the need for tax-incentives from the UK government to support new exploration and investment in the North Sea. “This has been tried with substantial success in Norway.
“I’ve been told by one operator that such incentives could be worth up to £250,000 per year per rig – which is a lot more incentive than the zero you get for having rigs floating idle.”
MSP Murdo Fraser (Tory, Mid Scotland and Fife) said that the general consensus of MPs on Energy’s Committee’s investigation into the issue was that the oil and gas industry could have a viable and sustainable future with ‘enhanced collaboration’.
He added: “The crude oil price is cyclical – it goes down. It goes up over time”. He later said on his Twitter page:
“ <Am> Enjoying exposing the nonsense of the Greens’ slash & burn approach to the oil & gas industry in @ScotParl debate. Callous approach to jobs.”
HOLYROOD oil & gas debate: Scottish Energy Minister cites Scottish Energy News as reliable source of daily industry information