North Sea oil and gas production will “effectively end” in the next 20 years, a minister has said, as he opened a consultation on whether there should be a presumption against new drilling.
Secretary for Net Zero, Energy and Transport Michael Matheson said there would be 77,000 jobs in low-carbon energy by 2050, up from around 19,000 today.
On Tuesday afternoon, he set out the Scottish Government’s Energy Strategy and Just Transition Plan, pledging an expansion of renewable energy.
Addressing MSPs, he said North Sea oil and gas production was declining and is expected to be around a third of 1999 levels by 2035.
Matheson said: “That projection takes account of the remaining potential development in the North Sea and is without any political decision to reduce consumption due to the climate emergency.
“This means that domestic production will effectively end within the next 20 years if we do nothing.
“The draft strategy is consulting on whether we should act faster than this.”
Matheson said there would be more jobs in energy production by 2050 than there are just now, while restating the Scottish Government’s opposition to new nuclear power stations north of the border.
While offshore licensing is reserved to the UK Government, the document says the Scottish Government is consulting on whether there should be a presumption against new exploration for oil and gas.
Key policy proposals published for consultation include:
- substantially increasing the current level of 13.4 Gigawatts (GW) of renewable electricity generation capacity, with an additional 20 GW by 2030, which could produce the equivalent of nearly 50% of current demand;
- an ambition for 5 GW of renewable and low-carbon hydrogen power by 2030, and 25 GW by 2045;
- increasing contributions of solar, hydro power and marine energy to the energy mix;
- generation of surplus electricity enabling export of electricity and renewable hydrogen to support decarbonisation across Europe;
- setting out final policy positions on fossil fuel energy, including consulting on a presumption against new exploration for North Sea oil and gas;
- accelerated decarbonisation of domestic industry, transport and heat in buildings;
- increasing access to affordable energy by urging the UK Government to take stronger, more targeted action for fair energy market reform;
- maximising household, business and community benefit from energy projects, including through shared ownership of renewables.
Scottish Greens energy and environment spokesperson Mark Ruskell said: “This is a historic step forward, and shows how we are leading the change with Scottish Greens in government; it is a generational tipping point for our country.
“For the first time, this energy strategy abandons the dogma of Maximum Economic Recovery of oil and gas and sets a clear path to a renewable future.“
However, Conservative MSP Liam Kerr said the strategy document took no account of the UK Government’s £16bn North Sea Transition Deal, stating that the plans could risk “shutting down the industry prematurely, leaving us dependent on imports and undermining the very supply chain we need to deliver the transition”.
Matheson said the Scottish Government had invested £500m in its own transition fund.
Labour’s Colin Smyth said much of the strategy was merely a “rehash” of existing policies, saying: “There’s little new to change the government’s failure to ensure our transition is a just one.”
He said that in 2010, the SNP promised there would be 130,000 jobs in renewables by 2020.
The minister said the government would publish a green skills strategy later this year.
Offshore Energies UK, which represents the oil and gas industry, said it welcomed Matheson’s promises around developing a hydrogen economy. External relations director Jenny Stanning said: “However, we are concerned at the statement’s suggestion of accelerating the decline in oil and gas production.
“Scotland gets 79% of its total energy from oil and gas according to its latest official figures.
“Across the UK about 24 million homes (85% of the total) rely on gas boilers for heat and we get 42% of our electricity from gas; we also have 32 million vehicles running on petrol and diesel.
“These plain facts means we will need gas and oil for decades to come.
“Additionally, in Scotland alone, the offshore industry supports 90,000 jobs - across the UK it’s around 200,000 - so we need to ensure that the final strategy acknowledges the continuing role of oil and gas in Scotland’s energy security and economy – as well as our sector’s role in a rapid transition to a low-carbon future.”
Sir Ian Wood, chairman of ETZ, said: “Scotland has huge potential in terms of renewable energies, particularly in offshore wind, green hydrogen and carbon capture and storage and it is encouraging to see this acknowledged within today’s strategy.
"However, the reality is that these developments, technologies and the jobs associated with them will not be available at scale until 2030 at the very earliest so we must continue oil and gas production as essential part of providing our energy security and achieving a successful and accelerated energy transition.
“It is absolutely clear that it makes no sense to prematurely reduce our domestic oil and gas production only to increase carbon heavy imports from overseas, this would be entirely counterproductive, both environmentally and economically, resulting in a significant loss of revenues from oil and gas and from its large supply chain whilst putting at risk a large number of jobs in the UK and certainly in the north east of Scotland.
“We will therefore be making strong representations to the Scottish Government as part of the consultation encouraging them to rethink this position.”
Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, said: “This move towards a presumption against exploration for North Sea oil and gas has been met with compete disbelief in the north east of Scotland.
“While the Scottish Government’s position is largely symbolic, as these matters are reserved to the Westminster parliament, this is still a breathtaking betrayal of one of Scotland’s biggest industries.
“The position set-out today suggests a fundamental misunderstanding of the energy transition, and the requirement for oil and gas to fuel it – drilling and production are still very much needed in the short, medium, and long term to bridge, and in many cases, fund, the transition.“
Meanwhile, Scottish Renewables' director of policy Morag Watson stated: “The Scottish Government’s draft Energy Strategy and Just Transition Plan are bold, ambitious and potentially transformative pieces of work, and are to be welcomed as another important piece of the net-zero puzzle.
“We are particularly encouraged by the government’s commitment to consult on increasing our ambition for offshore wind power and setting targets for solar and tidal and wave energy generation.
“We must, however, remember that many barriers still stand in the way of our industry’s continued development, and that we need strong action - and all renewable energy technology options on the table - as we develop the low-carbon energy system of the future.“
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