Politicians warned on hostility to North Sea investment

Dozens of Scottish and British business leaders have joined forces to warn Scottish and Westminster politicians against creating a “hostile investment environment” for the North Sea energy sector.

In a joint open letter to political party leaders, Aberdeen & Grampian Chamber of Commerce, supported by The British Chambers of Commerce and Scottish Chambers of Commerce has called for a “more reasoned debate” around the future role of oil and gas in Britain’s energy mix.

The letter, which is also signed by 58 leading figures from business and civic life in Aberdeen, highlights energy security concerns and the “additional carbon footprint that importing more energy from abroad would bring.”

The intervention follows remarks calling for an end to oil and gas exploration in the North Sea, which has threatened future investment.

Those signing the letter include Stewart Milne, Aberdeen City Council leader Jenny Laing, Burness Paul partner Robert Ruddiman, and Aberdeen Football Club commercial director Rob Wicks.

The letter says: “Statements calling for an end to new exploration and production have shaken investor confidence and placed tens of thousands of jobs – together with the economic wellbeing of whole communities across the UK – at risk.

“They also threaten the very basis of a fair and inclusive transition at the most crucial point in our collective journey to a net zero society.

“A transition, by definition, is a change of state over time.

“This is one of the most complex challenges we have faced in our history and it doesn’t lend itself to a simple, ‘Who’s good, who’s bad? Who’s green, who’s not?’ approach.

“To characterise it in this way is overly simplistic.

“We must now pause and allow for a reasoned debate about our energy future to take place.

“At the same time, we urge politicians to reflect carefully on their public statements on oil and gas and the impact they have on investment in the industry.

“We must not create an adverse policy environment at this crucial moment in our energy transition journey.”

The letter adds: “By 2050, the International Energy Agency projects that global oil and gas demand will fall by 80%, but even then 20 million barrels per day will be required to meet our needs.

“Therefore, there is no current future scenario where there is not a requirement for some oil and gas.

“Meantime, it continues to be required for people to travel, heat and power their homes and for the manufacture of many everyday goods.

“This leaves us with two options; to produce this domestically, with full control over the regulatory environment in which it is extracted; or to import an increasing amount of our energy, with the heavier carbon toll that shipping it from other parts of the world carries.

“The latter makes little economic sense, and even less environmental sense.”

Aberdeen & Grampian Chamber of Commerce CEO Russell Borthwick said: “This is a large cross-section of British business – companies and groups which collectively employ more than six million people – speaking as one to send a clear message to our political leaders that it is time for an honest and frank debate about the role that oil and gas plays, and will continue to play, in our society.

“We have a shared interest in getting to net zero as quickly as possible, but over recent months our region has been portrayed as part of the problem rather than part of the solution.

“The reality is that the skills, people, and experience embedded in the North-east of Scotland have quietly been leading the way in moving the UK towards its net-zero targets, without any intervention from COP26.

“This is a region bold about the pioneering role it will play in developing the technologies which will light our path to net zero.

“However, turning the North Sea into a hostile investment environment today does nothing to support that transition.

“In fact, it does the opposite, driving investment and tens of thousands of jobs away to other regions of the world.

“To meet out ambitious targets, we must harness the expertise, knowledge, financial capital and infrastructure of our world-class oil and gas industry and supply chain.

“Doing so will allow us to move to net zero through developing carbon capture utilisation and storage, offshore wind and hydrogen technologies powered by UK businesses.

“The energy transition opportunity for Aberdeen could in fact be bigger than the oil and gas industry – but to get there, we need strong leaders, ones who are willing to cut through the noise, see the big picture and get our transition steps in the right order to protect jobs, provide retraining opportunities and create new ones.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.