© Paul Campbell/PA Wire Some may hail recent announcements from the Westminster Government as indicating that they have gotten the memo about the importance of Aberdeen and the North-East for UK energy security. But I’m not getting too excited yet.
Such folks will point at new guidance produced in the wake of the Supreme Court rulings (which brought into question the Jackdaw and Rosebank field licences), claiming this could open the way to new licences being approved.
If true, this would go directly against statements from Ed Miliband, Secretary of State for Energy Security and Net Zero, that there would be no new licences on his watch.
But a careful reading of the statements made around the announcement of the policy gives little cause for celebration and shows that, once again, the devil is in the details.
Michael Shanks, minister in the Department of Energy Security and Net Zero said: ‘This new guidance offers clarity on the way forward for the North Sea oil and gas industry, following last year’s Supreme Court ruling.”
© Supplied by Cerulean WindsAdding: “It marks a step forward in ensuring the full implications of oil and gas extraction are considered for potential projects and that we ensure a managed, prosperous, and orderly transition to the North Sea’s clean energy future, in line with the science.”
That doesn’t sound overly positive to me.
In addition, Tessa Khan, executive director of environmental group Uplift, which brought the Supreme Court challenge along with Greenpeace, said: “The new rules mean that oil and gas companies will finally be forced to come clean over the enormous harm they are causing to the climate.”
I say it again – that doesn’t sound too positive to me.
The companies themselves were diplomatic in their response. Shell simply said they were committed to Jackdaw but were reviewing guidance.
Similarly, Ithaca (a partner in Rosebank) said they would need time to assess the guidelines, whilst also saying they were committed to the project.
Developers of the projects will now have to submit applications under the new criteria, with Miliband expected to make a decision in the Autumn.
Acorn support is positive, but ‘I can’t say I’ve seen much else that fills me full of joy’
Other positive news some point to is the commitment made by Miliband to provide £200m to progress the Acorn Carbon Capture and Storage (CCS) scheme in Aberdeenshire.
This money will cover development costs, with a final investment decision being made by the end of this Parliament.
On Acorn, Miliband said: “This government is putting its money where its mouth is and backing the trailblazing Acorn and Viking CCS projects.”
In addition, funding of about £1bn for offshore wind and some £500m for the UK Government’s Clean Industry Bonus has been announced.
© Paul Campbell/PA WireI’ll certainly give credit to Miliband for the Acorn announcement and the additional funding (although important to note the latter applies countrywide). But, to be honest, I can’t say I’ve seen much else that fills me full of joy. I have, for example, a more pessimistic initial reading of the new guidance.
And I find it hard to argue with SNP MP Stephen Flynn’s comments on 17 June about the new funding: “None of this is bad news, in fact investment is a good thing, but the harsh reality Ed Miliband can’t escape from is that these announcements aren’t creating jobs anywhere near fast enough to replace those that are being lost in the here and now.”
He added: “There will have been chins hitting floors across Aberdeen at the weekend when a UK energy minister suggested that thousands of oil and gas jobs have been created when the very opposite is true – but nobody should be surprised by how out of touch they are.”
Windfall tax remains unchanged
More broadly, ministers in London have studiously ignored all those who have urged the abolition of the windfall tax – the number of calls for which has expanded over recent weeks as job losses mount.
Meanwhile, comments from Conservative leader Kemi Badenoch that she would advocate for the end of the tax and more licences should be seen in the light of the Conservatives’ fear of Reform UK and the likely damage that party will cause to them.
So pardon my cynicism around the comments of the leader of the party, which put the windfall tax on oil and gas companies in the first place.
So let’s not pretend this is some new change of heart by Westminster in favour of Aberdeen and the north-east.
© Stefan Rousseau/PA WireYes, some of the news is positive (although it will be some time before we see if there is a real impact). However, as long as Miliband is in the position he is, I will find it hard to believe this Government will ever see the importance of using the oil and gas we still have (as opposed to importing it).
He has pitched his tent very clearly against oil and gas, and I think it will be hard for him to change that position without losing too much face. Plus, doing so would go against his very personally held ideology.
That means little chance of respite for Aberdeen and the north-east. It seems we will have short-term pain as job losses mount, whilst renewables simply don’t ramp up fast enough to replace those losses.
Also of importance will be the loss of skilled people to other parts of the world – skills that are needed for renewables that we risk losing as the bridge of a just transition crumbles …
Greg Quinn OBE is a former British Diplomat who has served in Estonia, Ghana, Belarus, Iraq, Washington DC (seconded to State Department), Kazakhstan, Guyana (as High Commissioner), Suriname (as Ambassador), The Bahamas (as High Commissioner), Canada (as Consul General Toronto and Calgary), and Antigua and Barbuda (as resident British Commissioner) in addition to stints in London.
He now runs his own government relations, business development and crisis management consultancy: Aodhan Consultancy Ltd.
