Yesterday (6th April) the UK Government announced a new ‘British Energy Security Strategy’. The shape of the strategy isn’t a surprise with many of the elements being trailed in recent weeks. Put simply the strategy is a disaster. It’s a recipe for failing to meet UK greenhouse gas emission targets and ignores the recommendations of the IPCC report that was published earlier in the week (4th April).
This post is a first response, and we will share more detailed analysis in the weeks to come.
The government’s press release notes that the strategy involves an ‘ambitious, quicker expansion of nuclear, wind, solar, hydrogen, oil and gas, including delivering the equivalent to one nuclear reactor a year instead of one a decade.’
Note the ‘expansion of oil and gas’. The aim will be to accelerate the approval of new oil and gas fields in the North Sea and west of Shetland. Essentially, it’s a doubling down on the oil industries so called ‘North Sea Transition Deal’. The aim of the deal is to make the North Sea a ‘net-zero’ oil and gas basin by 2050 – but this can only happen if carbon capture and storage can be developed and introduced at large scale, which is as yet uncertain.
Hydrogen is part of the oil industry strategy – the aim of the transition deal is for hydrogen to replace North Sea gas in domestic and commercial heating systems – these currently account for more than 20% of UK greenhouse gas emissions. The strategy talks about hydrogen supplying around 10% of energy needs. What it doesn’t say is that producing hydrogen by splitting methane or water is an enormously inefficient process and so a very significant proportion of all the new electricity produced from nuclear, wind, solar and oil and gas will be needed to produce the hydrogen!
After a period of equivocating on nuclear power it’s now back at the centre of the strategy. No figures are given, but if we extrapolate from the cost of the current Hinkley C project the proposed developments will cost around £150 billion. The government refers to nuclear as clean and safe. It is neither. This blog has looked at the arguments about nuclear elsewhere. It’s a hugely expensive form of energy, high risk with long construction times and a history of cost overruns and serious and unresolved problems with radioactive waste.
The new strategy says nothing about reducing energy demand through insulating new buildings and retrofitting existing housing stock. Retrofitting the majority of UK housing is estimated to cost around £160 billion – this is roughly what the new nuclear programme will cost. So, it seems like their plan is to construct large scale nuclear plants whose output will then provide the energy that is lost through the walls and roofs of homes, office and factories.
The supposed rationale for the new strategy is energy security. Currently working people are paying the price for the super profits being earned by the oil and gas sector. Led by that sector the strategy opts for a future of high energy prices – continuing oil and gas and new nuclear. Renewable costs continue to decrease, nuclear energy costs continue to rise. Currently renewable electricity is 6 times cheaper than gas and the gap is even bigger between the cost of renewables and the cost of nuclear.
It will be interesting to hear the response from the Scottish Government. Until now Holyrood has been firmly signed up the North Sea Transition Deal and the oil industry agenda, but it has had a firm position of no new nuclear. Similarly, it is now crunch time for the trade unions who have advocated just transition while endorsing the Transition Deal Strategy. The argument at root has been over jobs. It has been the case for a long time now that large-scale investment in renewables creates far more jobs than the same investment in nuclear. Yesterday’s strategy announcement means in effect no transition and no justice. There is an ever more urgent need for the workers movement and the climate movement to work together in opposition to the new strategy (really just the old strategy with more investment in false solutions). Less than 24 hours after its release the strategy has been widely criticised but we will need to do more than oppose this latest attempt at preserving an unacceptable status quo and reject the North Sea transition deal in its entirety.
A plug for a new initiative post COP – a series of broadcasts hosted by Independence Live that look at key issues for the climate movement in Scotland. Episode 1 is concerned with perspectives for the movement following COP 26 while episode 2 looks at war and the cost of living.
Since declaring a climate emergency in 2019, the UK’s developed oil and gas reserves have increased by 800 million barrels of oil and gas, bringing UK developed reserves to 6.55 billion barrels.
UK law and Scottish Government policy of Maximising Economic Recovery, which requires every last drop to be drilled from the North Sea, would triple UK emissions from oil and gas.
To limit warming to the Paris Agreement goal of 1.5ºC no new oil & gas fields, including Cambo, can be licensed or developed and North Sea production must be wound down in the next decade.
In line with equity, the UK – as a wealthy nation with high historic emissions and low economic dependence on oil revenues – should phase out of oil and gas faster than countries for which it would be much harder. Not all of the 6.55 billion barrels in currently producing or under developed reserves can be extracted – some will have to close early, before fully extracting their reserves.
Every delay damages the prospects of a well-planned and just transition for workers and communities currently reliant on the industry.
We plan to publish a more detailed review of the report and if you would like to contribute your thoughts on the issues that it raises please do get in touch.
Neil Rothnie – ex oil worker and one time editor of the OILC newsletter Blowout spoke to a conference of people involved in the creative industries in Aberdeen on Saturday 4th September. He talked about the North Sea, climate jobs and just transition. We publish his contribution in full here.
I’ve been asked to speak because a large part of my life has revolved around struggle in the oil and gas industry. I spent my working life offshore, mostly on the North Sea, latterly in the Norwegian sector. On the whole I enjoyed my working life. I miss it a bit. But mainly the Norwegian bit.
In my early days in the industry, I was active in the Aberdeen Branch of the National Union of Seamen. And during the strikes and occupations led by the Offshore Industry Liaison Committee, in the wake of the Piper Alpha disaster, I founded and produced Blowout. At that time a “nasty scurrilous” tabloid that aspired to giving oil workers a voice.
I became the Secretary of the OILC branch of RMT after OILC “merged with” the Rail Maritime and Transport union, and I briefly represented RMT’s oil worker members on the executive of that union. I remain a member of the Norwegian union, Industri Energi.
I was inspired to join the struggle against climate change by Extinction Rebellion. I’m also active with ScotE3, campaigning for jobs and a just transition (the three Es in ScotE3 are employment, energy and environment). I’m speaking for neither of these organisations. I’m sure a lot of what I say here would get agreement from many, but not all, of the supporters of these two organisations.
As I understand climate science, it is fossil fuels that are very largely the source of the greenhouse gasses that are heating the environment and causing climate change and threatening the existence of much of life on the planet. For fossil fuel read oil & gas, at least for the purposes of this meeting.
So, I find myself back in a fight with the oil industry. In the wake of the Piper Alpha disaster, I struggled alongside the very best, and most conscious of the offshore workforce, many of whom were lifelong trade union members. Today I struggle alongside the very best, and most conscious of the youth, organised in Extinction Rebellion and in other civil society organisations, and with other old guys in ScotE3.
It’s a lifetime of work in the industry, and recent activity as a climate activist that informs my understanding of a “just transition”. Global heating and climate change is not the fault of oil and gas workers, and it isn’t/wasn’t the fault of the coal miners either.
That’s the good news.
This thought consoles me just before I try and get to sleep while trying to imagine my grandchildren having long, happy and fulfilled lives, sharing a planet teeming with life.
The bad news is that blameworthy or not, oil and gas workers are going to have to stop being oil and gas workers. Sooner rather than later if they share my concern for their own grandchildren. The solution it would seem is a “just transition”. I think we should have a look at the two parts of this “just transition” construct.
The transition! It’s already underway. And insofar as I understand the science, there’s no going back.
One possible outcome is that we’re going to complete that transition to a sustainable habitable world powered by renewable energy and a planet where we’ve stopped the practice of dumping greenhouse gas pollution into the atmosphere.
The alternative is that we’re going to transition to a largely uninhabitable world where the earth’s delicate ecological balance is disrupted, and enormous forces of nature are released, eventually taking humanity and the rest of life on the planet into a premature and manmade fifth mass extinction.
Transition, it seems to me, is not a choice. It’s begun. We’re in the process. We WILL transition to a planet beyond fossil fuel burning.
Mind you there’s a possibility that there just might not be people there to see it. But if we and lot of the rest of life on this planet are going to survive oil and gas is going to have to go and soon.
But what about the “just” bit of a “just transition”? Does “just” mean “fair”? I only ask because it renders my next question into English.
Fair to whom? Do we mean fair to our grandchildren and to their grandchildren? Those who are going to inherit the planet in whatever state we’re going to leave it? Do we mean fair to those who have spent their lives with little access to the fossil fuel energy that’s destabilising the planet? The very same people who are often at the sharp end of climate change? Do we mean fair to all other life forms on the planet? Or, as it’s usually understood in our corner of the globe, do we mean fair to the workers who currently produce and process the fossil fuels that have kept the lights on in the Global North? In the sense that oil and gas workers, and the communities in which they live, should not be dumped, as were the miners before them, when the UK transitioned from coal to gas in the 1980s and 90s?
Surely, we mean “fair” in all of the above senses of the word. But with, I think, an important qualification. “The transition” is primary.
Whether it is to be just or not, is entirely subordinate. No transition to renewables and the fairness or otherwise, really won’t matter a shit.
None of this means that I don’t think it matters what happens to oil and gas workers and the communities in which they live. But I think we should be clear that oil and gas workers and their families are not some sort of special case. The future for their grandchildren and their grandchildren’s grandchildren will ultimately be bound up with the future of ALL of our grandchildren.
There’s no special case, no “business as usual” scenario for the North Sea, where the transition doesn’t happen, and where oil and gas workers just keep on keeping on, producing fossil fuels. And the fairness or otherwise of the “transition” for oil and gas workers is going to be determined in some part by the stand taken by the workforce and their families and communities.
From the standpoint of a roughneck, or a scaffolder, or a caterer on an oil rig on the North Sea, this “business as usual” might well look, pretty damned attractive if you’re hanging on to even a precarious “ad hoc” job, and the alternative is a wage thousands of pounds a year less, and that’s if you could actually get a job ashore or in offshore renewables. In the same circumstances what would your initial reaction be? You’d have a bit more of the “business as usual” too, at least till you could plan your exit.
But what has “business as usual” really meant for offshore workers in the UK sector. Relatively good money! That’s true. But it’s been falling real wages and diminishing job security and major layoffs after successive oil price shocks going right back to 1986. You can have spent your whole working life on the North Sea and still be liable to arbitrary dismissal (I can explain the NRB later if anyone here is not familiar with it). And for many, work schedules in the UK sector are as ball bustlingly bad as ever. The boom days were pretty much over by the time Occidental killed 167 workers when they allowed Piper Alpha to blow up.
There are a lot of very good reasons for workers to get off the North Sea and into an industry with a future. The problem is how,and where, because the Government and the industry, are hanging on, as if to dear life, to a hydrocarbon future. Where is the clear plan to run down the industry and retrain and redeploy the workers in renewables, using the skills that they already have? And where is the plan for learning to live with the amount of renewable energy that we can reasonably expect to produce in the crucial near future? Which is what a Government and an industry would be doing if they gave a fuck for the workers, or the planet for that matter. .
And then there’s the offshore wind industry, driven by profit. They’ll have studied carefully how the oil companies have tackled decommissioning. They too would rather pay wage rates that might well allow a decent standard of living in Manilla, but certainly doesn’t cut it in Aberdeen or Middlesbrough or Burntisland. The workers who used to produce wind towers in Campeltown could tell you all about this. What we have instead of a plan for a just transition, is a deal between the Government and the industry to further support hydrocarbon production, to continue with “business as usual” on the North Sea, subsidised to the hilt by taxpayers’ money.
The end of oil and gas globally must look like the end of the world to the fossil fuel industry, the bankers who finance it, the traders who parasitise it and the politicians. Hopefully it’ll only be the end of a rotten and corrupt system.
The Government parrots the industry formula about oil and gas production being necessary “for decades to come”. They call their plan for the North Sea “maximising economic recovery”. Producing every barrel that they can turn a profit on. This perverse version of “business as usual” has been written into the UK’s statute books.
And it begs the question of whether our Government, hosts of COP26, self-anointed global leaders in the fight against climate change,are giving the nod here to maximising economic recovery of ALL oil and gas?
I shouldn’t think Vlad the poisoner or the Crown Prince murderer need much encouragement to follow suite.
Central to the UK plan is one mitigation measure. It’s an expensive, energy guzzling technology that has been stalling for the last three decades, and which would require a 1000 fold increase in capacity worldwide to begin to address the situation. It’s called carbon capture and storage (CCS) and it’s linked to so called “blue” hydrogen production. CCS at scale is not even up and running in one single location in UK. It’s pretty much only commercially viable as a tool for producing even more oil and gas mainly in the States, and only then when oil and gas prices are high. CCS is beloved of the oil industry and the Government, but is “disappeared” by the media in much the same way as the North Sea itself is largely disappeared in public debate about global heating.
And the questions that never get asked?
Who’s going to pick up the bill for producing the hydrogen from natural gas and then capture and store this polluting waste product. The oil and gas industry itself? Not very likely! They don’t even pay for the oil. And they’re not going to pay to clean up much of their old hardware on the North Sea when its useful life is over.
The taxpayer is going to have the privilege of paying for a vast amount of the decommissioning of redundant platforms.
The polluter pays? Huh!
Putting the cost of hydrogen and carbon capture on top of the cost of production of oil and gas sounds very much like the kind of squeeze on profits that periodic oil price collapses have repeatedly given us. And the oil and gas workers know what happens every time the oil price falls and profits are squeezed. Investment dries up and the workers get dumped, and if they’re lucky, rehired at lower rates down the line.
If hydrogen and carbon capture and storage is a serious solution to global heating, then we need to know how much more fossil fuels will have to be produced to fuel this energy hungry process and how much carbon will be captured and stored and by whom on what timescale and at what cost, to whom. We need urgently to open a conversation with those, and I’m thinking here of the hugely respected climate scientist Myles Allen, who sees the transition led by the oil industry. Which sounds a lot to me like putting the fox in charge of the henhouse.
Although it’s not the oil workers’ responsibility alone to change this situation, they are first in the firing line, and what they do is going to be decisive in deciding whether the transition is going to be fair or “just” from their point of view. They can swallow the plan of Government and industry for continued exploration and development of new oil and gas fields. They might gamble that the industry will see them out and fuck the consequences for their grandchildren and the planet. They might opt for the “business as usual” option that gives them periodic job crashes and diminishing wages and conditions, and very likely future disasters and loss of life, and leaves them negotiating their escape from the industry alone as individuals. Certainly, the last time any significant section of oil and gas workers took up a struggle was over three decades ago after Occidental dispatched 167 workers on Piper Alpha.
Back then the official trade union movement completely failed to step up to the challenge. They were utterly useless, and it took the rank-and-file Offshore Industry Liaison Committee to try and ensure that Piper Alpha would never be repeated. But a quarter of a century later, French oil giant Total did exactly that. They presided over a complete breakdown of safety offshore, endangering the lives of the 267 men on Elgin and the Rowan Viking in 2012. Only luck stopped Total blowing up the Elgin complex with all hands onboard.
The Blowout publication never reported on the Elgin Blowout. That edition coincided with the 25th anniversary of Piper and would have seriously challenged the “never again” and the “we’ve learned our lesson” mantras.
So, who can predict what lies ahead, and what the workforce might, or might not do? We’ll no doubt get the measure of the offshore unions’ commitment to fighting climate change when we hear what their response to the proposed new Cambo oilfield West of Shetland will be.
Yesterday’s Just Transition Coalition Conference featuring the trade unions gave us a bit of a clue. The unions kept quiet on the issue.
But not one section of society alone is going to turn the climate crisis around. And the offshore worker is no more to blame than anyone else for the crisis, and no more responsible for solving it.
But if the oil and gas workers are to play a part in securing a just transition for themselves and their communities, they’ll certainly need all the support they can get.
The environmental movement have the responsibility for making sure that oil and gas workers have access to the science and an understanding of the role that fossil fuels play in global heating.
Creatives also have a role, maybe even some sort of responsibility here. And indeed this exhibition and related events suggests that this community is awake to oil and gas and its colossal implications locally, and for the planet. Maybe here in Aberdeen we’ve seen an end to an era, when for almost two decades, BP could sponsor the Grays’ School of Art degree show, drink their champagne in their own cosy enclosure, and with their own invited guests.
While BP were basking in the glow of appreciation from academia and creating a warm and fuzzy image in Aberdeen, they were breaking all the rules on the Deepwater Horizon where they killed 11 men, and in the process trashed the Gulf of Mexico with the world’s worst oil spill? I’m guessing BP’s paltry sponsorship money didn’t stretch to getting that years photography class from Garthdee over to Louisiana’s beaches. Not that that would have appreciably added to their 65 billion dollar costs that included a 4 billion dollar criminal penalty.
Andy Kennedy, old friend and neighbour, and one time tutor at Gray’s and known to a few of you here today, told me
Artists are encouraged to practice thinking, questioning, observing and reacting. It’s what they do.
Artists are supposed to upset the apple cart, knock on doors and ask for change
He said a lot of nice things about artists but these are the only bits I understood.Ah! Some of you do know him I see.
Maybe from here on in we’re likely to see, reflected in the degree show, a much more critical appreciation of the industry that’s dominated Aberdeen for the last 5 decades. Maybe that’s not how it works.
But at least creatives should be checking what is being funded by Oil and Gas, what if any hidden strings are attached, and ask themselves just what are the BPs and Shells of this world getting out of sponsorship of the arts.
We all, including the workers, will have to work out where we stand in this existential crisis. Nobody on this side of the fence is forcing the workers into a corner. It’s the climate crisis itself that’s doing that to all of us.
So, who knows whether the transition is going to be just? The brightest light in this gloom are the youth inspired by Greta Thunberg. They include the sons and daughters of oil workers, and they now find themselves on the front line of struggle. It’s their future that’s at stake. They are more likely than anyone to speak truth to the workers and to the industry.
The climate movement, armed by climate science, has a responsibility not to shy away from the very difficult questions posed by the transition for the industry workforce. The workers need to know the facts about climate change and fossil fuels. The workers and their communities will themselves have to come to terms with what continued hydrocarbon production means.
Maybe climate activists in Aberdeen and the North East bolstered by the creatives might consider opening their doors for a couple of days during the COP to activists who will be in Scotland from all over the global south.
Maybe together we can challenge Shell, Siccar Point, and the Oil and Gas Authority in Aberdeen, and let them know what we think of their Cambo plans.
Maybe together we can get out to the heliports and into the city and open up a conversation with the oil workers about what would be a “just transition” for everyone, and how that might be achieved.
Maybe we can set the tone for a global conversation about the future of hydrocarbons.
Thanks to Friends of the Earth Scotland for sharing this call to action from a working class community in Aberdeen. Residents in Torry, just south of Aberdeen, are having their only green space threatened by an oil industry land grab in the name of ‘energy transition’. The group has been campaigning to protect their local park and for a just transition that meaningfully includes local communities.
The oil industry and Aberdeen City Council are planning to destroy a much-loved greenspace called St Fitticks Park, which lies in the heart of Torry, a community in the south of Aberdeen. The council, together with a consortium of oil companies and Aberdeen Harbour want to dig up the park and build an ‘Energy Transition Zone’. This project now also has funding from the Scottish Government.
St Fitticks Park is the main greenspace in Torry and is enjoyed by generations of Torry residents, as well as attracting people from outside the community due to its thriving wetland, which is a home to a variety wildlife.
A community group has formed to resist the proposals (The Friends of St Fitticks) and they have various plans to safeguard the future of the park. They support the idea of an energy transition zone in response to the climate emergency, but argue this should be located on vacant industrial land to the south and west of Torry, not on their beloved greenspace.
Unwanted industrial development has been imposed on the people of Torry down the years. In the 1970’s homes were demolished to make way for a harbour expansion to accommodate the new oil industry, but many people living in Torry have seen little economic benefit from an industry that dominates the city. So once again they are fighting one of the most powerful industries in the world.
On Saturday 28th August, local people will gather in the park for St Fitticks day. We need to show that the community has wider support and help them to get their message heard. Please show your solidarity with the people of Torry, by either:
A) Taking a photo with ’Save Saint Fitticks Park’ placards (on your own or with your group) in your local green space and posting on social media with #HandsOffStFitticks
B) Share the graphic on social media with #HandsOffStFitticks
Both the UK and Scottish governments remain committed to continuing extraction of North Sea Oil and Gas. Carbon emission from the burning of these fuels are more than five times those of the whole Scottish economy. Yet these emissions are not included in Scottish or UK targets for emissions reduction. The assumption is that other countries will cut usage and the market will then drive down demand or, and more often, that we can carry on producing willy nilly but consumers will find ways of capturing the carbon. Both of these events are deferred into the future and exploration and development of new fields continues. The Sea Change report shows how these plans are incompatible with a zero carbon economy and with a just transition.
Thanks to Friends of the Earth Scotland for these notes on the latest development west of Shetland.
Oil giant Shell and Siccar Point Energy are seeking permission from the UK Government to develop the Cambo oil field, West of Shetland, just months ahead of COP26. In the first phase, due to start in 2025, the companies expect to extract 150 million barrels of oil – the emissions equivalent of 16 coal-fired power plants running for a year. They anticipate operating the Cambo field, which contains 800 million boe, until 2050, by which time Britain has pledged to be net carbon neutral.
The Cambo Field is the second largest oil and gas development waiting for approval and once up and running is set to be the fifth largest producer in the North Sea. If approved, Cambo Field will be the first UK project to get the green light since the International Energy Agency Net Zero report calling for no new investment in oil and gas starting this year and the Shell ruling mandating the company to slash carbon emissions 45% by 2030.
The UK Government is currently expected to give its final approval on the project over the next six to eight weeks. Moving forward with the Cambo Field contradicts the findings of the IEA’s net zero report and is incompatible with limiting warming to the Paris Agreement target of 1.5C.
The climate impacts of opening the Cambo Oil field would be devastating. In the first phase alone, developers want to extract 150million barrels of oil; the emissions from which are equivalent to running a coal-fired power station for 16 years. The field is expected to operate until 2050 – the point by which your government has committed to reaching net zero emissions. And this is just the beginning. Cambo Field is only one of many oil and gas projects waiting for government approval that have the potential to extract 1.7 billions barrels of oil.
Approving the Cambo field will be a massive failure of UK climate leadership and threatens to undermine the success of the crucial UN climate talks. In just a few months, the eyes of the world will turn to the UK as the hosts of the UN climate talks in Glasgow. Approving the Cambo field will send a clear message that this government is not serious about climate action and not willing to do its part to phase out support for oil and gas. If the UK keeps extracting oil and gas, how can it expect other countries to do anything different?
The International Energy Agency has stated that to meet the 1.5°C target in the Paris Agreement, there should be no more new investment in oil, gas, or coal. Further, the recent UK Climate Change Committee assessment clearly laid out that current UK policies are far from delivering the UK’s climate goals. The amount of oil and gas in already operating fields in the UK will exceed our share of emissions in relation to the Paris climate goals. The world cannot afford to open new fossil fuel frontiers. This starts with rejecting the Cambo Field.
If Boris Johnson is serious about being a climate leader, he must reject Cambo, all new fossil fuel developments and support a just transition for oil and gas workers and impacted communities. It’s time to end the UK government’s support for maximising the economic recovery of oil & gas and commit instead to a rapid and fair energy transition. With the right policy support, the UK could create three jobs in clean energy for every oil & gas job at risk. We need a clear, credible plan to wind down production and deliver a just transition that is driven by oil and gas workers, their unions and affected communities.
The Cambo Field will bring few jobs, little tax and a potentially huge clean up bill for the public purse. Contracts for construction and installation have been awarded to overseas firms, meaning the bulk of jobs will be outside of the UK. As part of a global oil market 80% of UK crude is currently exported, and so this field would not contribute significantly to UK energy security. Siccar Point Energy, who owns the majority stake in the proposed field, paid no net tax between 2015 and 2019, instead receiving £41mn from the government to cover decommissioning costs. Meanwhile, the complexity of the field and high cost of operating in the West of Shetland makes the project high risk, with similar projects suffering from large cost overruns that have driven producers to bankruptcy.
One of the key issues we heard from oil and gas workers in Offshore was the high cost of training, borne by workers as more and more are forced into short-term contracts, posed a barrier to moving easily between similar offshore jobs in renewables as well as oil and gas.
This new survey shows that these workers are paying an average of over £1,800 a year in training costs, and among more results that:
97% are concerned about the UK’s offshore energy industry training costs
74.5% are employed ad-hoc as contractors
65% said their employer contributed 0% to their training costs including safety and first aid training in the past two years, which is up from 45% before 2015
94% of respondents said they would support an offshore passport, which licences accredited workers to work offshore in any sector through a cross-industry minimum training requirement.
War on Want’s new report ‘A Material Transition’ exposes the environmental destruction and human rights abuses that mining for renewable energy could unleash. The climate crisis, the Covid-19 pandemic and rampant global inequality all have their roots in our resource-intense society.
The report highlights what can be done to avert this devastation and sets out a pathway for a globally just energy future: respect for the rights of affected communities, ensuring just and fair supply chains, and a reduction to harm for workers and the need for new resource extraction.
We’d like to publish a review of this report please get in touch if you would like to submit one.
We republish this article with thanks from the excellent People and Nature blog (well worth following) – it has also been reposted by the Ecologist.
The UK paid Royal Dutch Shell $116 million of tax rebates in 2019, while the company reported $92.1 billion revenues in the UK for the year.
Internationally, Shell made pre-tax profits of $25.5 billion in 2019, and paid $7.8 billion income tax and $5.9 billion royalties, in dozens of countries. But the UK, France, South Africa and Indonesia handed money back to Shell.
Shell and BP’s rebates are part of the hugely generous system of tax breaks for North Sea producers, linked to the decommissioning of declining oil fields (and analysed last year in the Sea Change report by Platform, Oil Change International and Friends of the Earth).
These are subsidies to fossil fuel production, running into billions of pounds, devised by a Tory government that claims to be taking action on climate change.
And the problem runs deeper. North Sea oil production has since the 1980s been taxed with profit-based, rather than resource-based, methods, which gave the international companies access to the resources in the ground on unprecedentedly favourable terms.
The central role of these tax arrangements in the neoliberal “process of redefinition of the economic frontiers of the state” was analysed in this article by Juan Carlos Boué, published by Scot.E3, the just transition campaign group. The UK tax model was promoted across the world and “destabilised many key petroleum producers, whose governments found themselves starved of fiscal income”, Boué argues.
This is all politically relevant right now, as trade unionists and environmentalists seek ways to unite to ensure a just transition away from oil and gas production on the North Sea.
There have been some vital steps forward in recent weeks.
In September, a report compiled by Platform, Friends of the Earth Scotland and Greenpeace gave voice to North Sea workers’ views on just transition. It was based on a survey of 1383 workers, all in upstream oil and gas.
The report showed that most people who actually work on the North Sea (91% of respondents) had never even heard the term “just transition” – a reminder of the yawning gap between working people on one hand and political, academic, trade union and “left” circles on the other.
The report – which was greeted by the Rail Maritime and Transport (RMT) union – also showed that North Sea workers definitely embrace the idea of moving out of oil and gas production and into offshore wind, in particular,
and other twenty-first century ways of doing things in general. The respondents were overwhelmingly positive about retraining and moving to other industries, and offshore wind was the favourite choice.
On a webinar arranged by Platform last week, three offshore workers gave their views, together with a trade union official (Jake Molloy of the RMT), a Labour politician (Lewis MacDonald, Member of Scottish parliament) and an energy researcher (Anna Markova, Transition Economics).
The workers spoke of the hardship and demoralisation caused when the oil price falls and big companies shed labour, which they have been doing throughout the coronavirus pandemic. The high level of casualisation on the North Sea makes matters worse.
Workers who hope to move to offshore wind jobs are further aggrieved by an unjust, bureaucratic qualifications regime. They are required to pay for re-training courses from their own pockets – at the very moment when they are looking for a job and short of money. Many companies add insult to injury by requiring them to do e.g. basic safety training that covers issues they have learned over decades offshore.
The webinar provided space to reflect on what a worker-led just transition would look like. Jake Molloy of RMT pointed to the huge job, now starting, of decommissioning old oil rigs. “The steel should be recycled and used for wind turbines”, he suggested. (He said similar things when addressing the Scottish TUC recently. See this recording, at 4 hours 52 minutes.)
Such suggestions will take on meaning if they are linked to calls for public ownership, and for an end to the subsidies paid to oil and gas producers, in my view.
Only public corporations, acting in the interests of society as a whole and not for profit, would be able to act on proposals such as Molloy’s. Running down oil and gas production, and decarbonising the economy, needs integrated approaches by entities that take full account of the social and climate consequences of their actions.
Only moves towards public ownership can challenge the energy companies who see the North Sea as one part of their global operations, and use their lobbying power to mould the tax regime to their interests.
At last week’s webinar, repeated mention was made of work that could be done in the UK, e.g. building and repairing rigs and wind turbines, being done elsewhere.
There is a danger of the labour movement approaching this as a competition between workers in different places, going back along the road trod by Gordon Brown, with his notorious call for “British jobs for British workers”.
This can only feed the divisive nationalism and protectionism to which the Johnson government appeals.
A campaign for public ownership, by contrast, highlights the fact that the state can be used to challenge the power of multinational capital and constrain its exploitation of working people and of natural resources.
It highlights the fact that state action could run down oil and gas production on the North Sea, expand electricity generation from renewable sources, and develop other industries in the areas where communities now rely on employment offshore.
A campaign for public ownership to underpin a just transition could start to challenge the multinational oil companies and their accomplices in government, and unite offshore workers with school students and all those demanding rapid action to stop dangerous climate change. GL, 15 December 2020.
■ As the discussion on just transition got started in Scotland, Shell’s truth-bending claims that it is doing something about climate change have been taking a beating. Several senior executives in its renewables energy business have quit, amid what the Financial Times reported is “frustration” at the minute quantity of investment in non-carbon technologies. Two big court cases against Shell by Friends of the Earth Netherlands are close to their conclusion. The first is to compel the company to clean up the damage it has done over decades to the Niger Delta, in Nigeria, where it produces oil. The second case is aimed at forcing Shell to reduce its carbon emissions.
There’s a compelling case that we are living in an age of pandemics. It’s possible, although by no means certain, that successful vaccination programmes will have had a significant on UK population immunity in 12 – 18 months. Given the profit motivation of Big Pharma it’s likely to take much longer in the global south. However, the likelihood of a mutation from Covid 19, or one or more completely new viruses over the next 5 years is high. So, a longer-term strategy for the campaign ought to be to ensure that we live safely in the face of recurrent pandemic. This is not a new idea – the British government had plans for such contingencies at the start of the millennium, then failed to maintain and update them and trashed the public health infrastructure that was needed for effective pandemic control.
So, one demand that should be campaigned for is that we learn the lessons of Covid and establish a well-funded local based public health service as part of the NHS. No place for private companies. It would be a tragedy if we are as ill prepared for the next pandemic as we were for Covid 19.
But we need more, and this is where the link with climate comes in. To be prepared we need to reimagine and redesign public transport systems so that they are safe to use and carbon free. We need to build new zero carbon houses and retrofit existing housing stock to high insulation and good ventilation standards. New public buildings and retrofitted existing public buildings also need to be zero carbon and have good effective ventilation. All of this is technically possible and is good for health and the environment.
All the key things we need to do to address both virus epidemics and global warming are not only largely the same (it’s very important that we keep stressing this point, though it’s been made before) but also their technical solutions are linked. Pumped air recirculation in buildings reduces virus cross-infection and improves energy efficiency. New bus design, rolled out in quantity production, can incorporate low-carbon motility and virus infection safety in one design, especially if the buses are in the context of no fares (protecting drivers, and passengers too because of reduced queuing and shorter journey times). Workplaces for the construction and maintenance of renewables can be much safer in relation to the spread of virus infection than oil and gas rigs. More people working in non-intensive local food production, whether commercially or in voluntary organisations, will mean more people working outside.
There are some things, like deforestation and food production, with their linked impacts on global warming and the liberation of new viruses, which we have little chance of influencing until we’ve stopped competitive capitalists from exploiting everything and every person for their profit. But these things related to housing, transport, energy production and food production are technically (and politically) achievable now. And if we don’t achieve them now there will be untold additional human suffering.