The UK government’s “Scottish Affairs Committee” has warned in a report that job losses from the North Sea oil and gas industry’s decline currently outstrip new jobs created by the scale-up of the clean energy industry.
The report warns that until clean energy jobs can be created at the scale needed to match current job losses, the UK Government “should avoid accelerating the decline of North Sea oil and gas production through its policy environment.”
The MPs urged the government to urgently address the employment gap and set out how it will address this.
The report concludes that as fossil fuels will continue to form part of the UK’s energy mix for decades to come, there are “compelling arguments” for the gradient of UK production decline to be eased, to meet as much energy demand as possible from domestic sources.
“Doing so will mean Scotland retains highly skilled supply chain workers, rather than being lost to overseas markets, which are vital for the growth of clean energy sectors,” said the Westminster MPs.
“In line with this, the cross-party committee raises concerns that without reform the Energy Profits Levy, also known as the Windfall Tax, will accelerate the decline of the North Sea oil and gas industry and its supply chain.
“The report concludes that reforms to the temporary tax, initially introduced in 2022, should be implemented as soon as possible to create certainty for the industry.”
The report also warns that the government should take a “pragmatic” approach to North Sea licensing policy and clarify how developers may be permitted to undertake additional drilling activity under existing exploration licenses.
“After environmental groups successfully challenged the government’s approval of new oil and fields Rosebank and Jackdaw, the committee welcomes the updated guidance published by the government on the environmental impact assessments of new developments,” said the committee.
“For greater transparency and public confidence, the committee recommends that the government issue an explanatory statement following each assessment. This statement should outline how environmental concerns were weighed against energy security and economic considerations.”
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.
“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, and, must learn lessons from this.
“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.”