More than 13,000 Scots oil and gas jobs have been lost in the space of just one year while over 40% of the UK’s energy needs is being imported, it can be revealed.
It comes as the UK’s offshore energy industry trade group has called on UK ministers to give greater support for North Sea oil and gas production insisting it is not incompatible with net zero aims – contrary to environmental group narratives.
The UK government has been standing firm on the denial of future oil and gas exploration licences which it was felt was required to meet global warming targets – while it has emerged that Scotland has been losing on average 37 oil and gas jobs every day.
According to the trade association, Offshore Energies UK (OEUK) the number of jobs both directly and in the broader supply chain in North Sea oil and gas in Scotland has dropped by nearly half since 2013 from 117,900 to just 60,700 in 2023. And in the last full year tracked there was a loss of 13,400 jobs with hundreds more expected to be shed with the closure of Scotland’s only oil refinery.
And the Department for Energy Security and Net Zero (DESNZ) analysis for the first quarter of this year shows that net energy import dependency – which measures how much the UK needs to buy in after accounting for exports is at 47%. That’s nearly 10% more than in 2019 – when net import dependency was at 38.7%.
Overall, energy production in the first three months of this year is 25% lower than in the pre-pandemic year of 2019.
And production of petroleum products dropped by 7.1% in a year. The department has put that down in part to winding down operations at the Grangemouth oil refinery which stopped processing crude oil after a century of operations in April.
Owners Petroineos is planning a transition of the site to become an import terminal for finished fuels.
It is being closed down with the loss of 430 of the 2,000 jobs based at the sprawling 1,700-acre industrial complex with around 100 currently remaining.
OEUK has told the UK Government, which is discussing the future of the [[North Sea]], that issuing no new oil and gas licences for the exploration of new fuels will result in the UK being more reliant on imports of oil and gas to meet energy demands.
They warned in a briefing: “This is not in the national interest and undermines UK energy security and climate goals.”
Their analysis says that UK Government advisers, The Climate Change Committee (CCC), estimate the UK will require 13-15 billion barrels of oil and gas equivalent (boe) in the period 2025 to 2050 to meet its energy needs.
But they say the North Sea Transition Authority forecasts the UK to produce only 4 billion barrels of oil and gas in the period 2025 to 2050 less than one third of the balanced path.
They warn that importing energy takes away support for production at home to support the Scottish and UK economy with the spin off on endangering jobs and therefore less tax to the Treasury.
But it also says that relying on imported energy instead of domestic North Sea supplies can increase the carbon footprint by up to four times because it has to be transported.
“OEUK do not support the premise that no longer awarding future oil and gas licences is climate leadership,” they said.
“The award of new licences is part of managing the UK basin and support for this provides a clear signal that investment in future oil and gas is welcomed by this government. Without access to new licences, investment in the basin will fall and the life of existing fields and assets will be shortened.”
It comes as oil and gas business leaders discovered they had an ally in US president Donald Trump who has supported more [[North Sea]] oil and gas production.
During his visit to Scotland he called the North Sea a “treasure chest” and attacked the UK’s tax regime for oil and gas companies.
He wrote on his Truth Social account during his visit: “They have essentially told drillers and oil companies that ‘we don’t want you’. Incentivize the drillers, FAST. A VAST FORTUNE TO BE MADE for the UK, and far lower energy costs for the people!”
The oil and gas industry has repeatedly criticised the windfall tax, which was introduced in May 2022 and subsequently extended and increased.
OEUK has called on Prime Minister Sir Keir Starmer to remove it by 2026.
Mike Tholen OEUK policy director told the Herald that the skills and expertise of workers was “driving innovation in cleaner energy production”.
He said the UK oil and gas industry has more than halved methane emissions since 2018 and reduced overall emissions associated with the production of oil and gas by 28% in the same time frame.
And he said this means the UK will achieve targets agreed with government for methane reduction seven years ahead of the 2030 deadline and exceed the 25% reduction target for production emissions four years ahead of schedule.
And in a warning to UK ministers the body added: “The North Sea is a strategic national asset that has powered the UK economy and homes through oil and gas for the past 50 years and it is only right that it is managed as such.
“The North Sea is uniquely placed to support our energy future boasting the second largest offshore wind capacity in the world and the geology to store over 78 gigatons of carbon dioxide in our reservoirs to decarbonise hard to abate sectors in the UK and beyond whilst responsibly producing oil and gas.
“With supportive policy, the North Sea will continue to power the country through responsible production of oil and gas alongside the build out of the renewable energy. The successful path for the UK is one that recognises the role of both oil and gas plus renewables; and not one versus the other, to deliver an integrated energy system that can respond to the UK’s needs. Homegrown energy production must be prioritised over imported energy.”
They say without issuing new licences to explore new fields there and to supplement a cut in UK energy production reduction, there will have to be an increase in “carbon intensive” liquefied natural gas imports to meet demand.
And they warn that in the past any rise in LNG imports has led to a rise in the wholesale price of gas and that action would be needed to ensure consumers do not pay significantly more on energy bills.
“The UK will continue to need oil and gas as part of an integrated energy mix for decades to come and this decision [to no longer award future oil and gas licences] will mean UK demand will be increasingly filled with carbon intensive LNG imports. For those working in the UK oil and gas sector, and more widely in industrial Britain, this is not a definition of climate leadership that is recognised,” the OEUK warned.
A court has rule that consent for two new major Scottish oil and gas fields was granted unlawfully and their owners must seek fresh approval from the UK government before production can begin.
A judgment on the Rosebank and Jackdaw fields came after a case brought by environmental campaigners, Uplift and Greenpeace, at the Court of Session in Edinburgh found that a more detailed assessment of the fields’ environmental impact was required, taking into account the effect on the climate of burning any fossil fuels extracted.
It said work on both fields could continue while the new information was gathered but no oil and gas could be extracted unless fresh approval was granted.
Shell’s Jackdaw gas field in the North Sea was originally approved by the previous UK Conservative government, and the industry regulator, in summer 2022.
Permission for the Rosebank oil development, 80 miles west of Shetland in the North Atlantic, was granted in autumn 2023.
Uplift, the campaign group that campaigns for a rapid and fair transition away from oil and gas said that the reliance on foreign gas was going to rise unless there is a shift to renewable energy, like wind.
Tessa Khan, executive director, said: “It’s a bit rich of the industry to turn round and blame job losses on this government’s future plans, when the last couple of years have seen the highest industry profits but the lowest level of industry investment in the basin in five decades. These aren’t being invested in the UK’s shift to clean energy – the majority of North Sea operators invest nothing in UK renewable energy with some ruling it out altogether – they are going to shareholders.
“The fact is, as the basin declines, so have the number of jobs supported by the industry… in the past decade… even though the government has issued hundreds of new licences in this period.
“The industry knows all this. That it is using the very serious issue of job losses to lobby against taxes on its profits and an end to licensing, is unedifying if unsurprising.
“This government must put the needs of workers for secure jobs with a future – and the public for affordable, clean energy – ahead of the self-interested lobbying of oil and gas companies.”
A DESNZ spokesperson said: “We have taken rapid steps to deliver the next generation of good jobs for North Sea workers in a fair and orderly transition as part of our Plan for Change, including by making the biggest investment in offshore wind and two first-of-a-kind carbon capture storage clusters.
“This comes alongside Great British Energy, which has already announced £1 billion in investment in British supply chains, unlocking significant investment and helping to create thousands of skilled jobs, progressing our mission to make the UK a clean energy superpower.”
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