COP26 can’t lead to end of oil and gas
Glasgow’s festival of the righteous wants to smash up a vital industry with the potential to evolve, says
President Xi’s not coming, the Pope’s not coming, but with a fortnight to go thousands of politicians, diplomats, assorted pen-pushers, lobbyists, protesters, hucksters and 8,000 English police officers are all packing their bags for Glasgow and COP26.
It seems that every Tom, Dick and Greta sees what is becoming a vast festival of the righteous as a lever for their goals, whether climaterelated on not, with the rail union RMT now set to stop all trains and the GMB refusing to empty bins in pay disputes. Like postal strikes at Christmas, it’s all too predictable.
And as the jamboree heats up, as it were, we political minions on Edinburgh Council are the target of centrally-produced campaign letters telling us to do our bit by ordering the Lothian Pension Fund (LPF) to dump shares in firms connected to fossil fuels. Usually, it’s companies which have the temerity to do business with Israel, but COP26 is too good an opportunity to miss.
The latest batch started arriving about a week ago with the apparently appalling news that Scottish council pension funds have around £1.2bn invested in the likes of BP, Chevron, Exxon and Shell, £229m of it from the LPF.
But try as hard as I might, I can’t bring myself to share their outrage, not because I like the idea of burning fossil fuels just to get up the noses of catastrophists, but because I’m not keen on pulling the plug on an industry which generates around £8.8bn for the Scottish economy and employs around 100,000 people, and threaten the pensioners to boot.
When the latest Scottish Government figures show renewable sources only accounted for 23.9 per cent of Scottish energy consumption in 2019, I’m not sure the UK candle industry is up to the task of meeting the demand an instant shutdown would produce, not when it’s already coping with a mindfulness-driven boom worth £1.9bn two years ago.
As COP26 approaches, disruptive protest for the immediate end to Scottish fossil fuel use is promised, even though if achievable would still leave the rest of the world producing 99.9 per cent of global carbon dioxide equivalent.
In a competition to set the most unachievable targets and find the fastest route to ruin, Edinburgh Council’s Snp-led administration says it can achieve net-zero by 2030, by which time even the SNP in government reckons 50 per cent of gross final energy consumption will not come from renewables. That’s an awful lot of carbon off-setting to make no difference to global temperatures.
Other Scottish Government figures show renewable sources generated the equivalent of 97.4 per cent of Scotland’s gross electricity consumption last year, 60 per cent from onshore wind. An impressive achievement undoubtedly, but it does not allow for output troughs.
And when the energy needed to produce the energy is included, official figures for 2019 show oil and gas was actually responsible for 93.5 per cent of Scotland’s primary energy needs. Turning off the fossil-fuel tap now would not just be a matter of job losses, but economic collapse.
But back to our letter writers. “As the value of fossil fuels continues to decline, continuing to invest public money in this failing industry is becoming financially riskier,” they claim. Yet Brent Crude is now trading at $84 a barrel from a low of $42 last year, the highest since October 2018, and getting back to the kind of level where the SNP might start reviving its 2013 arguments for economic self-sufficiency when the price was $110. After bumping along at between 30p and 60p a therm for the past 15 years, natural gas has rocketed in the past six months to 293p.
The seriousness of the situation seems to be sinking in with the Scottish Government, and while First Minister Nicola Sturgeon is not going to become a cheerleader for the Cambo oil-and-gas field off Shetland, it became clearer this week she will not be a block.
Cynical fence-sitting maybe, but it tacitly accepts the case for granting the extraction licences. As she acknowledged, transition is key, but with the gap between energy supply and demand so vast it could take decades and no single solution is going to be found to produce a sensible and pragmatic outcome which keeps the lights on.
Transition need not mean the end of fossil fuels if carbon capture and storage delivers what companies like Peterhead-based Storegga believe is possible. Backed by sovereign wealth funds with long investment strategies, it is building an air-capture plant to pump carbon back into rocks beneath the North Sea which they reckon has 90 per cent of Europe’s storage capacity. If successful it then creates a virtuous circle between the extraction and consumption of North Sea fuels and the waste safely returned whence it came. Crucially, they also believe 90 per cent of the necessary skills already exist in the oil-and-gas workforce.
Like the comedy Irish priest, “careful now” was Ms Sturgeon’s message to a Ted Talk about climate change in Edinburgh this week. “We’ve got to be careful that we don’t leave communities and people behind in that transition,” she said, recognising the lunacy of smashing up a vital industry which has the potential to evolve and sustain its success.
Sadly, this reluctant pragmatism does not extend to nuclear, which generated 42 per cent of Scottish electricity in 2016, still produces just short of a fifth of the supply but will end when Torness shuts in 2030, possibly as early as 2027 if recent rumour is true.
There is no such squeamishness in Finland, Croatia and the Czech Republic, among ten EU countries in a French-led pro-nuclear bloc which regards its role as critical in countering reliance on Russian gas.
Not everything European is desirable in Ms Sturgeon’s Scotland it would seem, and as Pink Floyd might have sung, careful with that axe, Nicola.