Lewis Macdonald - Carbon-neutral Economy (Just Transition)

15 January 2019

Last month, hundreds of energy workers and employers came together at a breakfast briefing in Aberdeen to consider how Scotland’s existing energy industries can play their part in the future energy transition.

Chris Stark, the chief executive of the UK Committee on Climate Change, set out the wider challenges. He stressed the importance of containing the increase in global temperatures to 1.5°C rather than 2°C.

He showed where Scottish and British emissions fit into the wider global picture, and he laid down a challenge to the oil and gas industry, which is still by far the largest energy employer in Scotland, to get involved in planning and delivering the transition to a low-carbon future.

The answers were interesting—not least those from people who work in oil and gas.

Will Webster, who is the energy policy manager at Oil & Gas UK, introduced the publication, “Energy Transition Outlook 2018: A global and regional forecast of the energy transition to 2050”, which is the industry’s first annual report on the implications of and opportunities from transition for existing energy companies.

That publication, and the briefing to launch it, tell their own story. Oil and gas workers, like coal miners before them, are citizens of the world as well as being skilled workers in energy production. They know that change is coming, and they want to be partners in that change, not victims of it.

That is surely what today’s debate is all about.

For example, oil and gas workers want their offshore safety training certification to be fully recognised in offshore renewables, and they want the expertise and experience that has been gained in production of hydrocarbons over the past 40 years to be put to good use.

They want that, too, for the infrastructure, for sequestering carbon and storing it below the sea bed in the North Sea.

Workers in Aberdeen, sadly, know only too well the impact of unplanned change, and not just in the context of the recent oil downturn.

Only yesterday, the Arjo Wiggins Fine Papers Ltd mill at Stoneywood was placed in administration, which puts at risk hundreds of jobs in the last paper mill in the north-east.

If the Government has a responsibility to support jobs that are threatened by global market trends—as, I am sure, ministers accept it does, in the case of Stoneywood paper mill—it has all the more responsibility when it comes to jobs that are put at risk in the name of public policy.

Many people who worked in Scotland’s coal and steel industries—and in shipbuilding, which Gillian Martin mentioned in the same context—remember only too well how their jobs were sacrificed in pursuit of Government policy objectives a generation ago.

The impact is still with us.

The whole point of a just transition is that such devastation should not be repeated in the name of public policy, however laudable the policy objectives seem to be.

That is why Chris Stark’s approach to our existing energy industries is the right one.

Asking those industries what they can do to support the energy transition is far more constructive and far more likely to succeed than advocating an end to production of oil and gas from the North Sea without reference to what the energy mix of the 2020s and 2030s might look like.

It is nearly 20 years since UK demand for oil and gas overtook UK production.

As Tavish Scott said, reducing that demand to below the level of production is likely to take at least as long.

Of course we should support ambitious targets for renewable energy generation and renewable heat, for stimulating demand for alternative fuels across the economy, for improving energy efficiency and for reducing emissions, but we need to start by considering what we want to happen—not which jobs we want to abolish and which industries we want to close down.

Surely, setting out how we can make progress without making redundancies is what a just transition commission is for.

Last week, when we debated ultra-low emission vehicles, I quoted motor industry experts who argue that 2018 might well turn out to have been the peak year for petrol and diesel consumption worldwide.

That will not have happened because of a fall in demand for transport or a decision to decommission car plants: it will have happened because of action here and elsewhere to promote electric cars and vans and hydrogen buses and trains, so that future transport needs can be met from lower-carbon sources.

We should take the same approach to other markets for oil and gas. Electricity generation has made big strides in the right direction, and there is still more to do, but the decommissioning of Longannet came after 15 years of expanding wind power, not before it.

The next challenge is heat. Eighty per cent of British homes are heated by natural gas, but many homes in rural Scotland are off the gas grid and suffer from serious fuel poverty as a direct result.

We cannot force households to give up affordable gas heating for much more expensive electric alternatives.

Instead, we must promote lower-carbon alternatives, whether we are talking about biomass, air-source and ground-source heat pumps or hydrogen, which might be a way forward in that sector.

A just transition is not only about justice for those who work in the energy industries; it is also about protecting consumers.

Energy policy must address climate change and security of supply; it must also ensure that future energy is affordable for all, which is no small task.

We must also protect jobs in the wider economy.

I mentioned the paper industry, which is only one of the manufacturing industries in Scotland that currently produce high levels of CO2 through their production processes.

Increased energy efficiency in industry is essential, but it is not enough. We must also seek to drive down emissions from the energy that will continue to be required.

That is why carbon capture and storage will be critical.

I hope that the Scottish ministers will work with UK colleagues to ensure that the next attempt to develop CCS on this island is more successful than the attempts that have gone before.

For all those reasons, we need an approach to a just transition that is serious, long term and truly inclusive, as Claudia Beamish and others have said.

I hope that Parliament can broadly agree today on how to achieve that.

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