2017 was without question a better year for the oil and gas industry. Going into December with an oil price over $60 and all those cuts to lifting costs coming through means many, but certainly not all operators are making money again.
The recent announcement by the Scottish Government of their ideas for Scotland’s economic future certainly got my attention. The First Minister Nicola Sturgeon said in a speech just prior to the announcement that she believed that Scotland had to lead the “key technological and social changes of the future”. Significantly, she added that she wants Scotland to be “the inventor and producer of the innovations that will shape the future, not just a consumer of those innovations”.
Following in the footsteps of Norway, France and others the UK Government has recently decided it will ban the sale of all diesel and petrol vehicles by 2040. The logic of doing this is primarily based on the need to clean up the air we breathe and of course to cut back on overall emission levels of climate warming gases.
Four years ago I wrote a position paper on “Future Fuels” for the Scottish Government’s Energy Advisory Board of which I am a member. One element of that paper included a proposal that Scotland should look at using bio-kerosene produced from a plant called Camelina as a bio heating oil.
There’s something seriously wrong with the energy technology innovation process in this country.
It’s not much longer than a year ago that the offshore helicopter operators were expressing real concern over the lack of experienced pilots being attracted into the industry. At the time this problem was being blamed on the smaller number of trained personnel leaving the armed forces. That particular problem has now solved itself but not – sadly - in a good way. The announcement that Bristow is to reduce their staff levels by 130 personnel which includes around 66 pilots implies a rapid reversal of fortunes for that operator and I’m sure others will eventually follow suit.
In the week before the general election on May 8, a “weel kent” and highly respected financial newspaper reported that our friends in Norway have earned more in the last quarter from their “oil fund” than the Norwegian government had actually spent. By any measure this is an astounding achievement and is testament to the Norwegian’s intelligent and strategic decision to set up the fund in the first place. Interestingly though, this event wasn’t to my knowledge reported elsewhere in the media and it certainly didn’t make it on to the mainstream television news. Perhaps though, that’s not surprising because, of course, although it may not be repeatable every quarter, it would have reflected very badly on all those unionist politicians who have worked so hard over the past few decades to deny Scotland the financial security that Norway has now so brilliantly achieved.
Most Energy Voice readers are almost certainly too young to remember the former Prime Minister Harold Wilson or the famous speech he made at a conference in 1963 in which he effectively warned that if the country was to prosper, a “new Britain" would need to be forged in the “white heat" of the so-called “scientific revolution" that was perceived to be taking place at the time. Wilson was right and that era certainly saw some dramatic technological developments of which the ones that stick in my mind are Concorde as well as other aircraft like the TSR2 and of course the beautiful E Type Jaguar car. At that stage the country was seen as a global technological leader alongside the US and had even developed its own successful rocket – the Black Arrow – for satellite launching. Sadly, of course, none of this lasted. Wilson’s aspirations were effectively killed off on the back of neoliberal economics ideology and any lead the UK had along with its huge talent were squandered.
Firstly, seeing everyone else has had a crack at it I’d like to comment on George Osborne’s fiscal plan for the oil & gas industry. To be honest I was somewhat underwhelmed by the chancellor’s tax plans for the UK oil & gas industry. I still believe that Labour’s Supplementary Charge should be scrapped completely and I am very disappointed – although not at all surprised – that exploration incentives are now going to be consulted on when the Treasury has had over a year to come up with a plan. It’s also clear now that the so-called bareboat charter tax aimed at preventing drilling contractors and others from not paying their full whack of tax in the UK is going ahead in some form or another and I’m told, may be rolled in with the new rules on taxation of overseas companies such as Amazon or Google who have been accused of shifting profits overseas and thus avoiding their full UK tax liabilities.
The “City Deal” being proposed for Aberdeen apparently consists of spending a massive £2billion on transport, housing and skills development. If such a deal is ever approved then Aberdeen City Council officials claim this will go a long way towards helping revive the oil & gas industry, the health of which is most certainly a cause for concern as would be the health of the entire economy of Aberdeen and Shire should there be a really prolonged downturn in North Sea and international activity. To put it bluntly though, such claims are utter nonsense and should be taken with a large pinch of salt. Investment in infrastructure does not itself impact directly on the economic or industrial prospects of a City or indeed a country. Why? Because infrastructure can only act as a means of attracting private sector or joint private and public sector investment in companies, jobs, technology and so on and so forth.
Throughout my career I’ve been involved to some extent or other in the development and commercialisation of technology. So, when faced with a selection of technology ideas to back I am acutely aware of the difficulties involved in sorting the wheat from the chaff. Believe me. It isn’t easy because the parameters you need to consider are many and varied and, of course, instinct and experience also count for a lot.
I don’t particularly like Boris Johnson and I certainly don’t support his politics. I also resent his constant lobbying for London which, incidentally, I don’t really like much either. The museums are great but you can keep the rest of it. I’m a country boy at heart. However, something Boris Johnson wrote last year I have to say I do agree with completely although I’d prefer you didn’t spread it around too much as it might damage my reputation. Commenting on what he called the UK’s “sterile debate” over Europe he said that if it culminated in our leaving the EU then it would quickly discover “that most of our problems are not caused by Brussels, but by chronic British short-termism, inadequate management, sloth, low skills and a culture of easy gratification and under-investment”.
Charges are set on a geographical basis and everyone pays more in the Highlands and Islands.
Well, that's that - it's over - and I mean over.
For 35 of the past 40 years I've been in the energy industry I've lived in Scotland and have watched Aberdeen and the north-east grow and prosper on the back of oil and gas.
I was disappointed but not actually particularly surprised that the now former minister of state for energy Michael Fallon decided to ridicule the nine months or so of effort that I and my fellow Commissioners put into the production of the report of the Expert Commission on Oil and Gas by calling it "copy-cat stuff".
I recently had an e-mail from a friend of mine containing a link to an article which said "UK R&D funding is strikingly below rivals such as the US and Germany and could be increased by up to 50% to match them".
I've long been a sceptic as far as the oil and gas recruiting problem goes because I think it's almost unbelievable the industry can't find enough qualified and experienced people to satisfy its demand.
I'm quite sure that like me most Energy readers will have been following or are at least aware of the takeover battle between the UK/Swedish pharmaceutical company AstraZeneca and its US rival Pfizer with the latter being the "aggressor".
The United Nations Intergovernmental Panel on Climate Change (IPCC) has just released its third and final report on climate change.
if relations between the West and Russia worsened and Gazprom - which is a state-owned company - was ordered to either reduce or even cut off supplies to Europe how could we deal with the loss of that much gas?
Don't panic. I'm not thinking of setting up a protest group and marching on London. In fact, people that know me are fully aware that I'll do anything to avoid going anywhere near the place.
The EU wants to cut its greenhouse gas emissions 40% compared with 1990 levels and also wants 27% of all its energy to be from renewable sources. Both targets are to be achieved by 2030.
Like most people I try hard to be optimistic at the start of a new year, writes Dick Winchester. Invariably though, my optimism lasts about a week, sometimes two weeks but rarely survives beyond the end of January.
If you’re in the energy sector and you’re not interested in innovation then you’re probably in the wrong job.