No, because I have limited time.
Where is the legacy from the UK Government? Where is the onshore infrastructure investment to support Aberdeen? It has been left to the Scottish National party Government to pick up the pieces, including the Aberdeen bypass and rail improvements. Where is the oil fund we have called for? Norway’s oil fund, started
in 1990, has now topped $1 trillion in assets, and last year returned a profit of $131 billion. That alone gives lie to the myth that Scotland relies on the broad shoulders of the UK to deal with any price volatility. Careful stewardship would have taken care of that.
Let us look at the measures the UK Government have taken recently. In the spring 2016 Budget, they reduced the supplementary charge back to 10%. That was very welcome, but the predicted cost to the Treasury of £l billion was only a third of the inheritance tax giveaway to millionaires—such were their priorities. In the November 2017 Budget, the transferable tax history was a welcome measure, but given that it was predicted to bring an additional £70 million in revenue to the Treasury, that was not a difficult decision. The UK Government need to close out the process going forward. Over the same period, we have had the £1 billion carbon capture and storage betrayal. That project would have facilitated diversification from the wider oil and gas industry.
As others have recognised, the offshore oil industry has clearly been a great success story and has turned Aberdeen into a global city. Despite the predictions of when oil will run out, there is still a bright future. Just last month, Total announced a major gas discovery off Shetland, with an estimated 1 trillion cubic feet of gas that can be extracted. Rosebank, off the west of Shetland, is estimated to contain around 300 million barrels of oil. Equinor has called it
“one of the biggest undeveloped finds on the UK Continental Shelf.”
Overall, the North sea holds significant potential, with the equivalent of up to 20 billion barrels of oil remaining. That could sustain production for the next 20 years. I repeat that the UK Government cannot do another cash grab on the industry. Production statistics show that the sales value of oil and gas has gone up, and we know that production of oil and gas remains 23% higher than the level recorded in 2014-15. Even so, the UK Government must introduce measures to improve the exploration and attract fresh investment. They need to support the industry in its ambitions to increase the total economic value of the North sea.
With the publication of the Intergovernmental Panel on Climate Change report, we have to recognise the wider climate change issues and that the world is not on track to meet the temperature goals of the Paris agreement. The UK Government will have to take action in that regard, but that does not mean that we need to pull out of the North sea any time soon. Even if we did, we would then be reliant on imports.
Scotland’s energy strategy recognises that a strong domestic oil and gas industry can play a positive role in supporting the low carbon transition. What would help that transition, while we are still extracting oil and gas, is carbon capture and storage, greater investment in renewables, and allowing onshore wind developments in Scotland. The UK Government must also back away from the nuclear folly, and invest that money in offshore renewables, grid upgrades and directly in energy efficiency measures in homes.
We must recognise that the North sea industry is highly regulated, with some of the most advanced and comparatively least polluting production methods in the world. The industry is focused on reducing its
carbon footprint and average emissions have fallen year on year since 2013. An oil and gas sector deal could help that process. Where is it? We really need one, and we need to hear about that from the Minister. The future of the oil and gas industry is bright, but it needs better leadership from the UK Government.
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