British Steel: Is reality finally dawning?

Well that was quite the weekend wasn’t it? An Emergency Session of Parliament approved the Government’s plans to take over the Scunthrope Steel Works, and now we have talk of the Royal Navy being deployed to ensure supplies of raw materials can get to the plant to allow it to continue to operate!

Firstly, let me state that I fully support plans to ensure the UK retains a national steel production capacity. This is a strategic industry.

But I am amazed that we have gotten to the stage where we nearly allowed Scunthorpe’s Chinese owners to shut it down, whilst at the same time ensuring we cannot produce domestically the coking coal needed to fire the plant.

The decision last year by secretary of state for energy security and net zero, Ed Miliband, to refuse to approve a mine in Cumbria, which could have supplied this, is coming home to roost.

What does this mean for Aberdeen and the north-east?

Let’s start with the obvious question – why Scunthorpe and not Grangemouth?

A good question indeed, and one which some would say demonstrates an ongoing contempt in Westminster for Scotland.

But the reality is we do have other refineries across the UK, and there is potential capacity there.

That doesn’t mean there isn’t an argument to keep Grangemouth operating in the way it currently does, and the Government does need to answer why it does not merit support. That, however, is a different discussion for a different day.

What we now need to look at are the lessons from Scunthorpe for the North Sea and domestic production of oil and gas.

Anyone sitting looking at the world today, upended by President Trump’s ‘America First/Make America Great Again’ trade strategy, should understand one key thing – we are in a different place, and globalisation is not what it once was.

© Andrew Milligan/PA Wire

That means the days when it was sensible policy to look to source goods/resources from the cheapest place and not produce them yourself are not now applicable for certain industries.

There are always industries which are strategically important for national security reasons. Steel is one of them, but you need to make sure you also have security of supply for what you need to fire the furnaces, with no domestic coal production, we no longer have that.

Energy is another area where security of supply is vital. If we didn’t understand that after Putin invaded Ukraine we have no excuse not to after the events of the last few weeks.

It makes no sense for the UK to leave some three billion barrels of oil equivalent under the North Sea whilst we import oil and gas from countries (who may not always be our friends) at four times the carbon cost (so much for our desire to be more climate conscious).

And yes, we will never produce enough oil to meet all our current and future needs but as OEUK has made clear, we could get to a point where we produce about half of that demand. A better state of affairs, as we work towards transition, than our current situation.

UK to ‘seek renewed relationships with old friends’

President Trump’s approach has upended global trade. It is time for us to both seek renewed relationships with old friends (such as Canada and the EU) whilst also doing what we can to maintain and increase domestic production where we can.

Oil and gas is an obvious resource where we can increase production. If we can get away from the ideology and dogma of those who think the UK can lead the way on climate change globally, regardless of the damage we do to ourselves in the process.

But yes, we can lead the way. We can show how to undertake a just transition. The Norwegians are doing a good job of this without the harmful types of policies we currently have in the UK. We can do the same. But we need to do it with our eyes wide open.

By paying lip service to oil and gas in Scotland, implementing some very unpopular policies, and not engaging on Grangemouth with the same vigour they have with Scunthorpe, the Westminster Government continues to show contempt for Scotland.

© Supplied by Aodhan Consultancy L

After the General Election last July, it looked like Labour would be a shoo-in in the Holyrood elections next year. No more.

People may have had enough of the SNP, but when they look at the alternatives, what do they see? Anas Sarwar must be holding his head in despair. And before Conservatives start crowing, best they look at what they did to help destroy the oil and gas industry.

What this all means is that any sensible, pragmatic politician looking at the world today should be thinking that just as saving Scunthorpe Steel is in the national interest, then ensuring the longevity of oil and gas is also.

This is no time for ideology. This is the time for leadership and doing what is best for the UK. Will our politicians (in Westminster and Holyrood) listen?

Greg Quinn OBE is a former British Diplomat who has served in Estonia, Ghana, Belarus, Iraq, Washington DC, Kazakhstan, Guyana, Suriname, The Bahamas, Canada, and Antigua and Barbuda in addition to stints in London.

He now runs his own government relations, business development and crisis management consultancy: Aodhan Consultancy Ltd