Replacing oil jobs and revenue is a huge task

Politicians have too often resorted to warm words about a ‘just transition’ when what is needed is bold leadership

In 2020-21, £522 million in tax revenues were raised from UK North Sea oil and gas. In 2022-23, that figure hit £10.6 billion, its highest ever level, as a result of soaring global prices and the introduction of a windfall tax. This is an economic reality with which all those who understand the need to transition to net-zero emissions must engage. Indeed, it is as much a reality as the need to reach net-zero in a planned, not chaotic, way.

These are realities that the conflicting calls to “just stop oil” or “max out oil” fail to recognise and those who are pushing them are living in a fantasy world that, if believed, could cause real harm to efforts to stop global warming and the UK’S economic future. Just as a crashed economy will not achieve a ‘just transition’, one that clings overlong to fossil fuels as the world modernises will soon become a backwater.

Yesterday saw a hopeful sign as Humza Yousaf opened the first dedicated innovation centre for floating offshore wind energy. It is estimated that the £9m centre, in oil capital Aberdeen, could deliver £43bn in UK gross value added by 2050 and create more than 29,000 jobs. The key word in that sentence is “could”.

The obvious synergies between the offshore oil industry and offshore wind should have led to much greater progress towards developing a globally important renewables sector in Scotland. But, with politicians variously obsessed by Brexit, immigration and independence, somehow the historic task of remaking our energy system has at times been relegated almost to an afterthought, with little but warm words and cold, calculating sophistry.

As the grim noise of party politicking in Holyrood and Westminster continues, with Yousaf and Rishi Sunak both in trouble over their parties’ standing in the polls, the real world is marching on and opportunities to be a renewable energy leader may be slipping through our grasp. The new innovation centre is a positive development, but if a genuine replacement for the mighty oil and gas industry is to be built, we need to be doing so much more.