MPs warn of risk to jobs by slowing production of North Sea oil

Production of North Sea oil and gas should not be wound down until there are sufficient job opportunities in clean energy, according to a cross-party group of MPs.

A new report by the Scottish Affairs Committee warns that the creation of jobs in renewables is not happening at the pace needed to offset the decline in fossil fuels extraction.

The committee’s report says the offshore industry is at a “critical junction” and calls on the government to take a pragmatic approach to the licensing of new exploration by providing clarity to developers about how they can carry out additional drilling under existing licences.

And it calls for reform of the windfall tax on energy companies to create certainty for the industry.

Labour MP Patricia Ferguson, chair of the Scottish Affairs Committee, said: “Today’s report outlines our concerns that jobs from the clean energy industry are simply not being created fast enough, or on the scale needed, to match the mounting job losses from the oil and gas sector.  

“It’s vital that the government moves quickly to plug this employment gap, replace jobs being lost and ensure a smooth energy transition for workers and communities.

“Until this is tackled, the government should avoid making decisions that would further accelerate oil and gas production’s decline. Our report sets out several ways to do this whilst still preparing for the longer-term clean energy future.”

The UK Government will decide later this year whether to give approval for exploration at the undeveloped Rosebank field off Shetland.

Norwegian state-owned energy firm Equinor, which owns Rosebank alongside British firm Ithaca Energy, has said the field contains around 300 million barrels of oil and would produce nearly 250 million tonnes of climate-warming emissions should in become operational.

Under former first minister Nicola Sturgeon, the Scottish Government outlined a “presumption against” new oil and gas exploration in the North Sea but has since softened its stance.

The MPs’ report, which marks the culmination of the first part of the committee’s inquiry into GB Energy and the net zero transition, says there are “compelling arguments” for slowing the decline in UK oil and gas exploration, which would help meet domestic energy demand and safeguard skilled jobs.

And on the Grangemouth oil refinery, which ceased operation earlier this year, it says the UK and Scottish Governments should have acted sooner to prepare for resulting job losses and set in motion plans for the site’s future much earlier. 

Ferguson added: “Throughout our inquiry we’ve also paid close attention to the closure of the Grangemouth oil refinery – the energy transition’s canary in the coalmine. Without a doubt, both governments should have moved faster to prepare for job losses and the site’s future...

“Additionally, I want to acknowledge the UK Government’s recent announcement of its clean energy workforce plan. We’ll be reviewing the plan with interest to explore whether it can deliver some of the priorities we outline in our report, to create good, secure jobs and support our economy.” 

Commenting on the report, SNP energy spokesperson Graham Leadbitter MP said: “The Labour government in Westminster is destroying jobs in Scotland’s offshore industry with its fiscal and licensing regime and this report is yet another in the mounting pile of evidence that Ed Miliband must change course. 
 
“The fact is our energy sector, Scotland’s energy sector, is haemorrhaging jobs in the thousands thanks to this Labour government – that’s the reality of Scotland’s energy in Westminster’s hands.”  

Tessa Khan, executive director of campaign group Uplift, said: “The response at this critical juncture is not to take the foot off the pedal on the transition, especially when we are at last seeing credible progress on the creation of clean energy jobs.

“Instead the  government needs to double down on its efforts to ensure that the planned increase in offshore wind, for example, leads to more manufacturing jobs in Scotland.”