Since oil prices started to fluctuate last year, we have been hearing regular news about mass layoffs in the oil and gas industry. This insecurity has had devastating consequences for thousands of people who have made their living from working on oil rigs and in refineries, research centres and power stations.
For many it is hard to see a future for our country without the oil and gas industry. The Scottish Greens have been arguing for a controlled transition to sustainable energy alternatives. This is not only because we are concerned about the catastrophic environmental consequences our society faces if we keep burning fossil fuels; it is also because fossil fuels are a finite resource, and the industry and jobs we have built on them will last only until the cost of squeezing out the last drops exceed the profit to be made. And that day is closer than many think.
Oil services company Wood Group announced last week that the slump in oil prices has resulted in the loss of more than 5,000 North Sea jobs since December. The company is still making hundreds of millions of pounds in profit but has cut its workforce of about 41,000 worldwide by 13%.
Analysts say there is little prospect of short-term improvement. This uncertainty is unacceptable for workers, the communities of the northeast and the Scottish economy. Companies such as Wood Group are “dynamic in downturns”, which means people can lose their jobs overnight.
The companies operating in the North Sea are profit-heavy multinationals that exploit the UK tax system to subsidise drilling elsewhere. They cannot be allowed to drive our agenda. We need to plan for ways to replace the jobs that North Sea oil has generated over the past half-century.
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Our best hope of a more secure economic future involves changing direction toward a diverse and truly sustainable economy. That means wind, wave and tidal energy, and retrofitting housing, district heating and reforesting to capture carbon and produce new products. Equally important is the chance this new kind of economy gives us to enhance skills, encourage innovation and increase supply chain opportunities for entrepreneurs and Scotland’s economic backbone: small and medium-sized enterprises.
Research for the Scottish Greens, to be published this week, shows how this post-fossil fuel alternative can create more employment than will be lost over the next 20 years. At present 156,000 workers are employed in fossil fuel extraction in Scotland, of which one-third are export-oriented jobs. Our research shows that by focusing on decommissioning and alternative industries, we could have more than 200,000 jobs by 2035. We would keep key assets such as Grangemouth and retool the site to focus on synthetic gas. We would continue to extract some of the remaining oil, but at a much slower rate and with a focus on maximising revenue.
The Scottish government could position Aberdeen as a centre of expertise to decommission the North Sea and oil infrastructure globally. In the coming decades we are likely to see the closure and removal of rigs and pipelines around the world. Scotland has the ability to take a leadership position by identifying the engineering, legal and financial services that will be in demand.
With offshore wind, we have the option to bring much of the infrastructure into the public sector, positioning ourselves as a global hub, pushing the supply chain to open factories in Scotland at our underused ports.
Wave and tidal energy need significant research, development and testing, and it is an area the Scottish government has failed to support properly. Great costs are involved in developing this sector.
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By expanding forested areas we can aid carbon capture and provide wood products for buildings and infrastructure, and add sustainable biomass to our energy mix and develop alternative chemical feedstocks.
By retrofitting our housing stock, we can create thousands of jobs while cutting fuel poverty and carbon emissions. My colleague Alison Johnstone pressed John Swinney, the finance secretary, on this point, getting him to commit to making it a national infrastructure priority.
The upscaling and diversifying we are talking about will benefit Scotland’s communities through training opportunities, skilled jobs and contracts for local companies. It will help spread job prospects to all areas of Scotland, rebalancing our economy beyond our biggest cities.
Big challenges are ahead, and the need for a clear vision has never been greater. With bold ideas we can unlock Scotland’s potential.
Patrick Harvie MSP is co-convener of the Scottish Greens and a member of the Scottish parliament’s economy, energy and tourism committee