NEW Prime Minister Rishi Sunak has been warned that urgent support is needed to help North Sea oil and gas workers transition to renewable industries.
The warning has been given by prominent environmental lawyer Tessa Khan who features in a documentary about the industry which receives its Scottish premiere this week.
The Oil Machine by Edinburgh-based filmmaker Emma Davie explores the conflicting imperatives around North Sea fossil fuels and asks how the industry can be dismantled or repurposed.
“We either put off thinking about it and it collapses or we manage it now,” Khan told the Sunday National. “The Government has to stop expanding oil and gas production in the UK, stop digging the hole deeper, and give the workforce the certainty it needs about the inevitable transition away from oil and gas.”
She said it was “incumbent” on the Government and industry executives to make sure workers had the training and skills support they needed to transition into a “potentially massive” and “world-leading” offshore wind industry in Scotland.
“There are surveys of the workforce that show the vast majority would consider leaving if they had support because they know it is not an industry that has a future and of course they are worrying about climate change as well,” Khan added.
She spoke as a report from the International Energy Agency acknowledged that the global energy crisis will hasten the end of the fossil fuel industry. For the first time in the agency’s history, it reported that global demand for fossil fuels was exhibiting “a peak or plateau”.
The analysis follows its statement last year that lower demand and a rise in low-emission fuels make new oil and gas fields unnecessary – yet the UK Government, under Liz Truss’s short-lived premiership, issued 100 new licences for oil and gas exploration in the North Sea.
Now Sunak has indicated he wants a moratorium on onshore windfarms in England and Wales to follow the ban on new solar farms, even though a UN report last week said that current global policies are putting the world on track for catastrophic global warming of 2.8C.
“This new [UK] government is hugely worrying as they seem to be going in exactly the wrong direction on every count,” said Khan.
“Wind and solar are nine times cheaper than gas but we have the highest energy bills of any country in western Europe because we are so dependent on gas. We could be going so much further in displacing gas from our energy supply yet the Government is ideologically opposed to it. It just doesn’t make sense.”
She said it was clear from reports from organisations like the authoritative IPCC that even existing coal, oil and gas fields will result in temperature rises exceeding the 1.5C legally binding target agreed in Paris in 2015.
“Even at 1.1C degrees of warming, which is where we are now, we are in pretty deep trouble so the idea of exceeding 1.5C is one that we have to avoid at all costs,” said Khan.
Asked why she thought the Tory government was so opposed to transitioning from fossil fuels, she pointed out that the industry was a “powerful political actor in the UK”.
“That is why we have this incredibly generous tax regime that makes the UK the most profitable country in the world for big oil and gas projects, even though the North Sea is geologically challenging for exploration,” Khan pointed out.
Just last week, oil and gas giant Shell posted profits of $9.5bn (£8.2bn) between July and September, more than double the amount it made during the same period a year earlier.
It now intends to increase its share dividends by around 15%, taking the total payout to Shell shareholders to $26bn (£22.4bn) so far this year.
The news has triggered growing pressure for a greater windfall tax on energy firms to pay for the UK’s energy price freeze, brought in by Truss.
The new Chancellor Jeremy Hunt has ruled that the £2500 average dual fuel energy price cap will be reduced from the original two-year period to just six months and there is no indication the Sunak Government will break from Truss’s insistence that the cap will not be funded by a windfall tax on energy firms.
“The Government is actively supporting and subsidising oil and gas production and it simply can’t do that if it is going to credibly claim that it is also acting in a way that is consistent with our climate goals,” said Khan.
“What we have learned in the last six to nine months is that we also can’t afford our dependency on oil and gas as we are going into a winter where seven million households won’t be able to pay their energy bills.
“That is because we are hooked on gas which is currently unaffordable while, on other hand, we have the best renewable resources in Europe.
“It really speaks to how completely wrong the Government is – not only its climate policy but also in its energy security and affordability.”
Khan said it was hard not to ignore the sheer power of the fossil fuel industry, the richest in the world, and its influence on government.
“We know that there are dozens of MPs who have shares in oil and gas companies and there is a revolving door between the Government and the industry,” she said. “That is the only way we can explain the fact that the Government is taking decisions that are totally irrational and not in the interests of the UK public.”
