Beyond the North Sea: what does just transition mean?
“Did the Scottish Government announce 100,000 new green jobs and magically phase out domestic demand for oil and gas today? If so, fantastic news, well done,” tweeted Fergus Mutch, the former head of communications at the SNP. “If not, ‘Stop Cambo’ doesn’t get us very far. In fact, it gets us unemployment and more imported oil for decades.”
It was a rare sign of disapproval from someone who just six months before stood to be a candidate for the party in Aberdeenshire West. The tweet was a direct response to the First Minister stating the controversial Cambo oilfield development should not get the green light.
Mutch’s comments exemplify the strength of feeling on this issue in his corner of Scotland. Polling commissioned by his firm, Braemar Communications, found 36 per cent of people in the north-east opposed Nicola Sturgeon’s position, while 29 per cent supported it. He later expounded his concerns in The Press and Journal, suggesting Cambo had “become a byword for all future development in the North Sea”.
However, five days before Sturgeon told MSPs that “Cambo couldn’t and shouldn’t pass any rigorous climate assessment,” her government chose not to sign up to an international alliance focused on phasing out oil and gas by 2050.
Led by Denmark and Costa Rica, the Beyond Oil and Gas Alliance (BOGA) was launched in the last days of COP26. Its eight core members, including Wales, have committed to ending new licensing for production and exploration, as well as to setting a date for ending production entirely.
Faced with criticism, Sturgeon said Scotland was in “active discussions” about membership – but like Mutch, she spoke about not leaving people on the “economic scrapheap”.
Ryan Morrison, a just transition campaigner at Friends of the Earth Scotland, says this demonstrates the Scottish Government “is not yet comfortable” with discussions on what’s next for oil and gas. However, he says this has left the sector “in a bit of a limbo” because without a target end date, there is no path to getting there either.
He says: “The groups in BOGA have immediately pivoted towards talking about what they’re going to do next and how they do [just transition] well. We [in Scotland] are not having that conversation as seriously yet because where we’re heading isn’t as clear.
“If you are in Denmark right now, you know that production will end in 2050 and there will be no new licensing. That hasn’t been a cliff edge for the industry, they are just managing that decline and putting money into renewables and into alternative industries.”
And Morrison says the current situation with Cambo – which has been paused by Siccar Point Energy after Shell pulled out for economic reasons – is also reflective of governments not taking control of the transition, instead leaving it to the sector itself.
He says: “The thing that worries me about that decision is that it hasn’t been a decision made by the UK Government, taking into account all of what would need to happen to support people and to make a properly planned just transition.”
Similar concerns are shared by the workers. Jake Molloy, chair of the RMT’s Offshore Industry Liaison Committee, says the government needs to facilitate transition or risk “a repeat of what happened with the mining communities”.
He adds: “These workers face a bleak future because there’s very little to transition to at this moment in time. We don’t have any significant manufacturing base. We don’t have, in the pipeline here in Scotland at least, significant plans for any projects which would address that growing imbalance, because every day that goes by there’s another installation being decommissioned.”
While there is agreement between activists and unions about the need for just transition, tensions remain when it comes to phasing out fossil fuels.
Morrison stresses that “an end to licencing isn’t an end to production – those are very different things.” Asked if he believes there has been some deliberate muddying of the waters between the two, he says yes.
Pointing to a recent debate in the Scottish Parliament, he says: “The Scottish Conservatives said that they did not support maximising economic recovery, so they don’t support the full extraction of oil and gas. What that means is that at some point they believe we need to stop licensing, but they are right now accusing people who are calling for an end to licensing as threatening the industry, which is dishonest because it is clearly at some point their position and also not a true reflection of what people are talking about – that an end to licensing gives us a frame for the transition.”
Molloy questions this, warning that fixing a date may shut down the UK sector but would likely increase imports. He also argues production of oil should not stop because it is vital for sectors like manufacturing. He says: “We want to stop burning oil and we want to stop burning gas. We want to become carbon free. That is an absolute given, yes. But should we stop the production of those products for other uses?”
He suggests banning oil and gas exports could ensure the UK continues to have a domestic supply for these purposes, long after fossil fuels are no longer needed for energy.
But climate change lawyer and founder of environmental group Uplift, Tessa Khan, highlights there are already over 200 fields which will “continue to produce oil and gas for years to come”.
She explains: “The campaign around the Cambo oilfield was about not opening up new fields that would lock us into production for at least 25 years… That’s not about turning off the taps at all, because the taps are going to keep running for a number of years. It’s about ensuring that we don’t continue to invest in the energy sources, and indeed the industry and the jobs, that we know don’t have a future if we are going to stay within a liveable climate.”
Khan is particularly critical of the North Sea Transition Deal, a plan launched by the UK Government with input from industry early last year. She describes it was the “worst possible example” of this type of agreement, suggesting it was “really just the government rubberstamping a bunch of industry demands”.
She accepts that industry must be part of the discussion on ending reliance on fossil fuels. But she insists their views must be appropriately balanced with the views of workers and communities, and overall it must be the 1.5 degree target that steers everything.
“While, yes, the industry obviously is an important player in determining how we actually transition away from oil and gas, I think we’ve got to remember that they – and the North Sea Transition Deal reflects this – simply are not being ambitious enough or realistic enough about what the science requires in terms of the pace of that transition, and they are continuing to basically double down on extracting profit from this industry for as long as they can, with very little regard for the workers in that industry.”
Key to a successful and just transition are renewables. Over a decade ago, former First Minister Alex Salmond said Scotland could be the Saudi Arabia of renewables, a claim that has been echoed by the Scottish Government several times since.
Morrison gives it short shrift: “The Saudi Arabia of energy comments are just absurd when there was so little effort made to actually retain any of the work [in the supply chain for renewables developments], and it’s something we campaigned on really hard because ultimately, we want a just transition, and when we talk to offshore workers about stuff, they’re interested in jobs in renewables. But there just aren’t enough.”
James Black, an associate at the Fraser of Allander Institute, agrees more effort must be made to keep more of the supply chain in Scotland. But Black is more upbeat about where the sector is heading. “Working backwards, if we realise where we have to be by 2045 in order to be net zero in Scotland, it’s clear that renewables is going to have a significant expansion over that time and play an absolute pivotal role.”
Currently, the economic impact of renewables is significantly smaller than oil and gas. Black’s research estimates there are currently 22,660 jobs linked to green energy in Scotland, contributing £2.3bn to the economy. Oil and gas, meanwhile, supports 100,000 jobs and contributes £8.8bn according to Scottish Government data. The big difference is that demand for renewables is only going to increase as the world moves to tackle climate change, bringing more jobs and more investment, particularly if Scotland manages to make a success of exports.
And in terms of the local benefits, Black speaks positively about the prospects for regions which have historically struggled to retain jobs and talent. He says: “Renewables is one of the key lifelines for rural areas. The Highlands has a lot of opportunity and the Highlands is currently the area with the most capacity in planning of all the local authorities in Scotland. And then you have areas like East Ayrshire and Renfrewshire.
“It’s hard to say exactly how many jobs are supporting these areas – just because we don’t really have the economic data for it, unfortunately – but based on where the capacity is being built, at least, it’s fascinating that it’s kind of a reversal of the economic fortunes in the last couple of decades. One really key thing for making sure it’s actually a success in Scotland though is the supply chain factor.”
The travails of BiFab in recent years is the obvious example of Scotland failing to maximise the benefits of renewables. Black believes the government will need to get tougher as we proceed through the transition to net zero. He says: “So far there’s been quite a lot of carrots provided, but there haven’t been that many sticks. And I suspect that we’re going to see this coming up more and more over the next decade.”
That could mean, for example, firms being required to provide a set number of Scottish jobs whenever they are bidding for a renewables contracts, with penalties if those targets are not met. But naturally, this will have an impact on cost.
The Scottish and UK governments face some tricky decisions over the next few years. Managing the decline of any sector is no mean feat, even with possible alternatives in renewables and new technology.
But Black again offers some optimism: “There’s a lot of hope for the success of the renewable economy and in part it’s almost a guaranteed success in some senses because we have a target for 2045.
“We know in theory what direction we have to go to achieve that. We know there will be a big expansion in things like renewable heat over the next few decades, and lower carbon transport.
“Very few industries out there have these kinds of guarantees around overall industry direction, but actually making sure that we see the full economic benefit, that’s much more uncertain.”