In May we welcomed the publication of an important report on North Sea Oil and Gas. Ann Morgan shares her reflections on the report here.
Sea Change: Climate Emergency, Jobs and Managing the Phase Out of UK Oil and Gas Extraction
Sea Change highlights the tremendous potential for a just transition and in outlining the scale of the potential increase in new climate jobs provides convincing evidence that trade unions, activists, politicians and economists can utilise in designing a sustainable economy.
Bella Caledonia calls the report a ‘landmark’. A landmark is defined as a’ turning point’ or a ‘critical point.’ However, as the report is released there are very mixed messages from policy makers. On the one hand the declaration of climate emergency by the Scottish Government and many local authorities and on the other the Oil and Gas Authority press release on 10thJuly 2019 announcing new licences for exploration and exploitation of hydrocarbons.
The Gas discovery by the Chinese State Owned CNOOC in January this year is said to be the largest in over a decade. Exxon Mobil and Shell and other oil companies are busy extolling the virtues of Natural Gas, greenwashing thus
No word of emissions of methane (research is currently underway to assess methane emission underestimated previously in the North Sea). As we know methane is a potent greenhouse gas and natural gas is not a ‘bridge’ fuel as the report emphasises.
The ScotE3 draft manifesto defines a just transition as
‘One that ensures no individual or community suffers economically or socially as old jobs end and new jobs are created’.
Sea Change makes it clear that a just transition to renewable energy is manifestly possible with the potential that three new climate jobs could be created for every North Sea job at risk.
Just transition is the way to win hearts and minds and the Sea Change report gives an informed and detailed bridge to that improved working and living environment. An effective campaign is needed to turn around the Oil and Gas Authority (OAG) insistence on opening up applications for the 32ndround of licensing.
To end fossil fuel dependence and move to the alternative, a clean and safe working and sustainable environment, will not be easy. However the structured and planned transition that Sea Change describes cannot be ignored. The report notes that oil and gas was developed with Government support and intervention. Indeed the big energy companies continue to attract subsidy for their hydrocarbon activities. It argues that it is now high time for intervention and investment to enable a renewable transformation.
Sea Change is an outstanding analysis of the importance of energy at the ‘production’ level and has relevance in the systemic changes required, in public ownership, in governance and accountability and in designing new social models. The report further illustrates a point also made by Asbjørn Wahl that solutions cannot be made on an environmental/scientific analysis alone. Action is required to change the power imbalance nationally and internationally.
The need to end extraction
Sea Change documents the current impact of North Sea Oil and Gas and demonstrates in the starkest terms that the continued practice of Maximum Economic Recovery (MER) Is incompatible with the Climate Change Act and emissions reduction. Mary Church Head of Campaigns at FoE (Scotland) puts it succinctly
‘ Climate Science is clear that we urgently need to phase out fossil fuels, yet the government and big oil companies are doing everything they can to squeeze every drop out of the North Sea … we must ban further exploration and redirect the vast subsidies propping up extraction towards creating decent jobs in a clean energy economy.’
The report finds that:
- The Uk ‘s 5.7 billion barrels of oil and gas in already operating oil and gas fields will exceed the UK’s share of carbon emissions agreed in the Paris Climate goals. Currently Government and industry aim to extract 20 billion barrels.
- The additional oil and gas extraction enabled by recent subsidies will add twice as much carbon to the atmosphere as the phase out of coal power saves.
- Given the right policies, clean industries could create more than three jobs for every North Sea oil job lost.
The authors call for the withdrawal of the OAG authority’s 32ndlicensing round. They recommend that the UK and Scottish Governments work with affected communities and trade unions in a managed phase out of North Sea oil and gas, investing in education, retraining and reskilling (although it is acknowledged that many existing jobs are highly skilled and transferable) and influencing the priorities of the Scottish National Investment Bank with a significant degree of public ownership. Infrastructure costs can be met with a rapid phase out of oil subsidies underpinned by a fiscal policy of support for clean energy to at least the level to which the oil and gas industry have been supported.
Otherwise the future looks bleak. The report notes that
- Offshore oil industry increasingly pressurised (See RMT union’s report on North Sea working conditions)
- Renewables – currently no significant UK jobs creation with manufacturing jobs going overseas
- Oil and Gas extraction from newly developed fields would push the world beyond climate limits
In short, the Westminster and HolyroodGovernments face a choice between two pathways to stay in climate limits.
- Deferred Collapse: Continue to pursue Maximum Extraction through subsidies until worsening climate impacts force rapid action to cut emissions globally. The UK Oil industry collapses pushing workers out of work in a short space of time.
- Managed Transition. Stop approving licensing permits and tax breaks and phase out extraction.
The report argues that a National Energy Strategy can mean an energy transformation that meets climate commitments while protecting livelihoods and economic well being. Local manufacturing and workforce participation needs to guide this transformation with new approaches in economic development, strong trade union rights and sectoral bargaining.
‘Clearly it is an ambitious project to transform the UK energy sector within a couple of decades, just as the rapid development of the North Sea was an ambitious project …’
The report models the impact on the oil and gas workforce of ending the development of new fields. Taking into account the jobs created through decommissioning and forecast retirement in the existing workforce, it estimates that 40,000 existing oil workers (direct and support chain) may need to be in a different job by 2030. To examine the scale of jobs that can be created in compatible clean energy industries and the level of policy ambition necessary, it models the numbers of new jobs that would be created in offshore wind, marine renewables and energy efficiency retrofits, sectors that have strong overlaps with existing oil and gas skills and finds that the number of jobs created will be at least three times more than the number lost.
The report also highlights the international justice commitment to ensure transition is fastest in wealthier countries and end operations, which harm poor communities and workers (Jake Molloy in the RMT report notes the harsh working conditions for Asian migrant workers in decommissioning in the North Sea for as little as around £3 an hour). Decommissioning should be paid for by oil companies and decommissioning plans should detail and provide for a Just Transition for workers.
Overall, Just Transition plans, guided by climate limits, should provide structured pathways for the existing workforce, new workers and communities. Terms and conditions of workers must be safeguarded and accountability to trade unions and local stakeholders in place.
Finally, the authors report that in other policy arenas restrictions on the supply of harmful substances (e.g. ozone depleting chemicals and asbestos) targeted the substances, whereas with fossil fuels only measures to slow the consumption have been taken leaving the market to determine extraction. This is beginning to change. It is to be hoped the banning of fracking in Scotland and UK wide in future will serve as an example of legislative measures to make unsafe practices unlawful.
It is worth noting that the authors place no great faith in carbon negative strategies such as capture and storage. While these technologies may have their place in future developments, philosophy of enabling business as usual must be guarded against. To finish with the words of the authors
‘Oil and Gas sucks investment …’
Investment in renewables could swiftly move us to reduction in emissions within climate limits.
‘Today’s decisions shape the long term energy future’.
Let’s begin the sustainable revolution.