With the Scottish Government’s revised Energy Strategy and Just Transition Plan set to be announced in the coming days, North-east business leaders are making a final plea for the terminology around a “presumption against” new oil and gas to be scrapped.
The strategy was first published in January 2023. It has since been subject to considerable consultation and robust feedback from industry and stakeholders.
While most aspects of oil and gas policy are reserved to Westminster, the energy sector was fiercely critical of the tone set by Nicola Sturgeon’s government when the strategy was unveiled – which knocked confidence and discouraged investment in the UKCS.
The Scottish Government, now under new leadership, has hinted at a more pragmatic approach which would support new exploration licences if certain climate compatibility or energy security tests are met.
Aberdeen & Grampian Chamber of Commerce – which represents hundreds of energy and supply chain firms and around 100,000 people working in the North-east economy – has cited the news about the closure of Grangemouth refinery, alongside a devastating new report from analysts Wood Mackenzie as grounds for ‘focusing minds’ at Holyrood.
Grangemouth has been earmarked for closure in 2025, with the flow of oil from the North Sea reducing to uneconomic levels – leaving Scotland without key refining capabilities and a strategic economic asset at a time when global energy security is in sharp focus.
Wood Mackenzie’s new report (attached), published on Thursday, paints a bleak picture regarding the impact of the new UK Labour government’s plans to extend and increase the Energy Profits Levy – warning that the industry will be ‘fatally wounded’ if they don’t change course.
Commenting, Aberdeen & Grampian Chamber of Commerce Chief Executive Russell Borthwick said: “While industry makes the case for a commonsense fiscal approach to restore confidence in the North Sea, the Scottish Government also has a major part to play.
“Although the main levers over energy sit with Westminster, the tone set by Holyrood matters to investors.
“There is no doubt that the wrong-headed ‘presumption against’ new oil and gas contained in the draft version of Scotland’s Energy Strategy only served to create more uncertainty while windfall taxes cut the sector off at its knees.
“A Scottish Government under new leadership has a real opportunity in the coming days as it publishes its revised strategy – to back our energy sector to the hilt, to show the world Scotland’s door is open to investment and to protect jobs through the energy transition.
“This week’s news about Grangemouth should focus minds at Holyrood. The loss of those jobs, while significant, is just a tiny fraction of what’s to come if governments across the UK don’t change course in relation to oil and gas.
“Our message is clear: ditch the presumption against new oil and gas, follow Norway’s lead on energy security and economic stability, and unlock Scotland’s huge potential.”