Don’t Bank on the Bomb Scotland has produced an excellent new report that looks at the links between nuclear weapons, tackling the climate crisis and degradation of the environment. Written by Linda Pearson the report collects together a wealth of useful links for anti-war and climate campaigners alike. The aim of the report is ‘to highlight the connections between climate change, nuclear weapons, militarism, environmental destruction, racism, gender inequalities and social injustice in order to build a broad-based movement that can challenge existing power structures and bring about systemic change’.
Scot.E3 from its formation has argued that defence divestment needs to be part of the transition to a sustainable zero carbon economy. We agree with Don’t Bank on the Bomb that ‘… any Green New Deal plans should include a transition away from military production, as well as a transition away from fossil fuels’.
The new report highlights the expenditure of huge sums of money on ‘modernising’ nuclear arsenals around the world. The nuclear industry (military and civilian) is perhaps the most centralised and authoritarian manifestation of the military-industrial complex. We would argue that it’s not simply that the money spent on nukes should be spent on developing a new sustainable economy; the nuclear industry and arms manufacture more generally distorts economic and social choices and constrains civil liberties. The skills of engineers and scientists that could be devoted to productive, environmentally useful activity are instead harnessed to a system that produces waste, trashes the environment and risks all our lives. The report highlights the interconnections between the drive for profit, the impact of climate change and increased military tensions. One example of this is the race for commercial and military dominance of the Arctic.
Hundreds of environmental campaigners are calling on the UK Government to take urgent climate action by ensuring that future renewable subsidies are not used to fund burning trees in UK power stations. Over 800 individuals as well as 20 environmental campaign organisations have submitted critical comments to the consultation, which sets out proposals on how to award future renewable electricity subsidies, called Contracts for Difference (CfDs).
The NGOs and individual respondents to the consultation have called on the Government to ensure that safeguards vital for meeting climate commitments are reaffirmed, ones which would prevent new subsidies for large biomass plants reliant on imported wood from trees. They have urged the Government to protect forest ecosystems and the climate by ensuring that all future renewable power subsidies go to the cleanest forms of renewable energy, such as wind and solar power, rather than to more wood-burning power stations.
In 2018, the government announced new greenhouse gas and efficiency standards for CfD awards, which resulted in virtually all renewable power subsidies awarded since then going to lower carbon offshore wind and not to polluting biomass plants that emit at least as much CO2 as coal plants per unit of energy. They stated that failure to apply those changes “would lead to greenhouse gas emissions significantly above the projected UK grid average for most of the lifetime of [biomass] CfD projects”. The government’s proposal for future CfD awards, which they have just consulted on, makes no mention of extending those safeguards. The safeguards will automatically lapse unless they are explicitly extended.
Almuth Ernsting from Biofuelwatch said: “The UK already pays some £1.3 billion in subsidies for burning more wood in power plants than any other country in the world. At least, in 2018, the government’s new standards stopped the expansion of inefficient, high-carbon wood burning for electricity and thereby mobilised more money for non-emissive wind power. The government must not let those safeguards lapse now, after parliament acknowledged the climate emergency. It must not allow any more renewables subsidies to be misspent on a high-carbon source of energy which also harms wildlife and communities.”
Rita Frost from Dogwood Alliance added: “Following last Friday’s International Day for Biodiversity, I want to highlight the devastation that the biomass industry causes in the natural world. Living in the Southeastern forests of the North American Coastal Plain, I’ve been in awe of the remarkable biological diversity that’s all around me, and saddened by the devastating destruction of forest ecosystems by the biomass industry. Every day, this world-class biological hotspot of diversity, that includes species found nowhere else on the planet, is destroyed to make wood pellets for utilities like Drax [the world’s largest biomass power station, in Yorkshire]. The government has committed to planting 30,000 hectares of trees a year across the UK by 2025. Yet, just in the Southern U.S. in 2018 alone, over 43,000 hectares of forests were destroyed to feed Drax’s demand. No further biomass projects should receive government support.”
David Carr from the Southern Environmental Law Center stated: “It is very worrying that we didn’t see any confirmation in the consultation document that the Government will apply the same emissions and efficiency standards to new biomass plants in future as it did in 2018 and ‘19. Those standards were hard-won by environmental campaigners as well as scientists showing the true climate impacts of cutting down trees for burning. We urge BEIS not to backtrack on its own commitments at this crucial juncture for the climate and biodiversity.”
From soaring death-tolls to the threat of global famine, COVID-19, designated by the World Health Organisation as a pandemic only a month ago, has brought about the rapid disruption of our world economy like no other event in human history.
This is a public health crisis, but it’s also an unprecedented crisis of inequality, as lockdown guidelines, implemented around the world, are followed by the collapse of entire industries, unprecedented spikes in unemployment, a growing scarcity of essential commodities as a consequence of the ongoing disruption to global supply chains, and huge social dislocation arising from these.
A worldwide crisis is being exposed, of lack of access to even basic infrastructure – housing, clean water, energy and food – that would make a lockdown viable for many millions of people around the world. As the negative impacts of disruption set in, it’s the people most deprived of this basic infrastructure that feel the hardest impacts.
Inequalities of race, gender, age and ability are being exacerbated. Those with the means and security to self-isolate and access medical support are able to do so, while those without are left to suffer the consequences.
There are currently more than 70 million people around the world that have been forcibly displaced from their homes. 3 billion people have no access to hand-washing facilities.
This devastating level of deprivation undermines our collective power to contain and suppress the ongoing spread of new disease. We’ve seen no clearer illustration of the way that global inequality threatens the collective security of all of us.
The COVID-19 crisis and the inequalities it exposes are set against the backdrop of our greater ecological crisis. As the UN special rapporteur on extreme poverty and human rights has warned us, this crisis sees humanity on course for a century of “climate apartheid” as the impacts of rising temperatures fall with violent disproportionality between the wealthy and the poor.
As the repercussions of this pandemic plunge the world into deeper economic turmoil, we know that it’s those living already on the frontlines of climate crisis – indigenous communities, subsistence farmers, coastal communities and the urban poor, particularly in the global south – whose lives and livelihoods will again be most at risk.
Even before this pandemic, COP26 was billed as a crucial staging post in the challenge of bringing the world’s political leaders and civil society organisations together to achieve consensus on a pathway to rapidly reducing carbon emissions while building global resilience in the face of climate breakdown.
Necessarily postponed until 2021, COP26 will now be the first meeting of the world’s climate leaders in the wake of COVID-19. We will have survived one of the world’s worst public health crises in a century and we will be seeking a pathway to recovery from the worst economic downturn since the Great Depression.
COP26 will now be a vital arena in which to demand that this recovery, as yet to be imagined, be both a green recovery, and crucially a just recovery, that tackles the scourge of global inequality at the root, while reducing carbon emissions. The COVID-19 crisis has exposed the deep inequalities in our structures, and highlighted the vulnerabilities of ecological, social and economic systems. But it has also shown how we can and must respond to crises. Our response must put the most vulnerable and marginalised first. It must be urgent and ambitious. It must be democratic, and we must resist authoritarian attempts to use crisis responses to increase their power and control. It must be based on transformative, people-centered solutions rather than political and economic business as usual, and it must be informed by whole systems thinking to ensure a truly just transition.
As we’re now discovering so vividly, our futures are deeply interconnected; whether we acknowledge that or not, there is no path to ecological balance that doesn’t start by putting the goals of social and economic justice front and centre.
Now is not the time to stop talking about climate change. Now is the time to raise our voices even louder, to call out the profiteers, to resist exploitation, to build power and stand in global solidarity as we prepare to tackle multiple crises and fight common injustices. If you wish to add your group/organisation to the list of signatories, please do so by filling this form.
Neil Rothnie spent his working life on the North Sea oilrigs. In this post he looks at Covid-19 and the slump in oil process and how oil workers pay the price for the super profits stolen by the oil companies.
COVID19 exposes that there are no “market” solutions to the real problems that face us. In fact the, “neo-liberal” market-led society has left us with a precarious health service which has all but had to shut down looking after the health of the majority of people just to be able to cope with this virus. And it’s left us with insufficient resources in the form of testing kits and PPE and ventilators. The market can’t lead us out of this COVID19 emergency (no one is even making this claim) neither will it be able to lead us out of global warming and the developing climate emergency. When the oil & gas industry says that it is the solution to global warming it’s lying. Their plan is business as usual – produce every drop that can be economically produced from the North Sea and (presumably) worldwide. Greed, private property and getting rich drive the oil industry. Co-operation, the recognition of the crucial role of key workers, an end to poverty homelessness and the provision of basic necessities to all has to be the response to COVID19. No going back to the days when our “heroes” will once again be the “celebrities” that stand in for and apologise for the filthy rich. Our heroes are health and care workers, supermarket and delivery workers. Let’s make sure it stays that way.
Under conditions of this Covid19 pandemic, the exploitation of the workforce has taken on a more overt and sinister form, where workers are herded offshore under conditions where it is impossible to maintain social distancing. Only a virtual news blackout has allowed employers to try and mitigate the risks (to their reputations) by jumping the queue being formed by health and care workers, and privately organising COVID19 testing for oil & gas workers going offshore. Who knows how effective this is, or whether the infection is spiraling offshore only to come home with these guys at the end of their trip? Are all the companies quarantining all outward and inward bound workers? Are they testing everyone every day? Otherwise what possible precautions could be put in place to get workers offshore via helicopter to work eat and sleep (sometimes in shared cabins) cheek by jowl in an atmosphere of endlessly recycled air?
Belatedly the industry have organised their own “testing” regimes but are still capable of fucking that up by sending guys offshore before results are in and have, in at least one case, ended up sending one guy out who had tested positive to the virus and then disallowed his fellow passengers from self-isolating.
The testing of oil & gas workers for COVID19 before many health services and care workers could get tests, needs I think to be challenged. It’s not on as far as I’m concerned. How essential are oil & gas workers during a pandemic and a global glut of oil? Even a 10% cut in global production isn’t enough to artificially hike the prices that we ultimately pay to levels where the rich can continue to get their “dividends”. Many of these workers, far from being “key” workers have turned out to not even be essential to the industry. The industry is sacking workers en mass in the midst of a social crisis that we’re all supposed to be in together. What bollocks!
Oil that workers have sweated and risked life and limb to produce is trading at negative prices in a market that’s driven by greed and geopolitics and periodically crashes. Where the workers pay with their jobs, again and again? An industry that cannot learn the lessons of the periodic disaster and near-disasters and must be very close to another. What kind of life is that for the workforce? And all this from the industry that threatens an existential crisis for people and nature.
If the employers can’t/won’t furlough their workers, then the Government should step in and do so directly. If the Government won’t do it they should come out and explain why.
At every opportunity, and to get out of the holes they’ve dug themselves into, the industry periodically drives up exploitation by driving down wages and increasing offshore work periods. Dumping whole swathes of the workforce is the traditional method of achieving this. We’re well into the latest phase of this with another 30,000 UK job losses predicted on top of the steady stream of redundancies already underway.
We need to go for the industry by the throat and break this unholy alliance that exists between them and the Government and in which the trade unions have been willing participants or “partners” in sweetheart agreements. The media has largely failed to be anything more than a propaganda mouthpiece.
Should we not shut-in oil production, furlough the workers and use up the global glut if need be. Is this not the time to start offering oil & gas workers the chance to retrain for the renewables sector (or for whatever they want) and escape the ongoing nightmare of an industry that is an eater of men and women and a threat to our very existence?
The coal miners, their families and communities were fucked-off in the last energy transition. Oil & gas workers will get the same treatment if they stand by and let it happen this time.
In this post, the latest in a series on the pandemic and climate crisis, Mike Downham discusses some of the lessons that we can learn. The article was first published in the Scottish Socialist Voice newspaper.
Yesterday I met two front-line doctors in Pakistan at a Zoom meeting. They described their work as a suicide mission. They have no PPE provided – they make what they can themselves. Health workers who protested were arrested and brutally treated. They have three ventilators for the whole country (population 213 million), and no staff trained to use them. Anyone who gets coronavirus pneumonia dies. The government doesn’t have a policy.
In India slumdwellers are being issued with hydroxychloroquine as an experiment – there’s no evidence that it’s effective. Getting food to these people, who by the way are human beings, is a bigger immediate problem than stopping infection. The government is panicking, already opening up the lockdown at a point when the epidemic is just taking off.
Yemen, after five years of civil war, has 2 million malnourished children. Malnutrition is notorious for reducing resistance to infections of all kinds. They don’t know how much coronavirus they have in the country because they don’t have tests.
As for Africa, a continent of poverty and underfunded health services, the predictions for numbers of deaths range from the terrible to the catastrophic – but how can you usefully describe the difference between hundreds of thousands of deaths and millions of deaths?
Meanwhile the Government of our rich, relatively small country, remains more concerned with covering its tracks than doing anything of significance. The Scottish Government didn’t adopt a better policy than Westminster’s at the point when they could have split, an act of subservience which the independence movement won’t forget.
Saving lives must be our priority, and I’ll come back to that. But, first, this pandemic is a huge learning opportunity, and if we don’t take action on the basis of what we learn, and begin to take action now, rather than wait until ‘it’s all over’- there will be other pandemics of new viruses, waiting for their moment. We need to act now to tackle the root causes, not just the symptoms.
There is little doubt that this new coronavirus originated in primary forests, as did Ebola, Zika, Swine Fever, Sars and Mers. All these viruses are thought to have existed for centuries in primary forests, where they were contained by sustainable ecosystems. The trouble started with deforestation to make way for agriculture – agriculture which has become more and more industrialised, monocultural and as a result unsustainable. There have been different intermediate hosts for each ‘new’ virus before it reached humans, and we don’t yet know which hosts were involved for the Covid-19 virus. Pigs are prime suspects, because pork has become a staple in China for the many who can now afford it. The Chinese eat an average of 39kg of pork in a year – even the Americans eat only 27kg. This appetite for pork has fuelled a huge expansion of highly profitable production by big companies. The animals are raised in factory farms with the usual inhumane crowding and conditions. Last year 100 million pigs died in China with Swine Fever. These farms are mostly sited on newly bulldozed forest land.
The initial theory that the pandemic started in a wild animal market in Wuhan is no longer holding up, though it may have contributed. An additional factor may also have been that wild-animal foragers were forced to push deeper into forests to satisfy demand, another large and profitable food market for big business, disrupting sustainable ecosystems as they hunt.
The first thing we’ve learned, then, is that the profit motive on the part of big agricultural companies is the root cause of this pandemic. These companies, as we know, have expanded by grabbing forested land in poor countries – less expense, and easier to buy off protest.
The second thing we’ve learned is that governments, for the most part, have failed us in controlling this pandemic once it started. The most despicable examples are the UK and USA Governments. For the UK Government to be prepared to sacrifice older people to save the shareholders is an abuse of human life which people will never forgive.
The third, and biggest thing we’re learning is that we have the power to control this epidemic ourselves. London bus drivers, having failed to get adequate protection from the Government, or from the Mayor of London, or from Transport for London, took things into their own hands. They organised through a whatsap group, sealed the front doors of their buses and waived fares. They were driven to this because they were dying – at the last count 30 TfL workers, bus drivers or Tube workers, have had their lives ended by corona virus infection.
Some intensive care NHS workers have decided, hospital by hospital, to refuse to work if they don’t have adequate protection. NO KIT, NO CARE. They feel they have a responsibility to make that painful decision, not only for their own survival as vitally essential workers, but also because they know that if they become infected they will pass on the virus to large numbers of both patients and other workers. They will not be complicit with intensive care units becoming coronavirus reservoirs.
Construction workers are forcing closure of non-essential sites – luxury flats and hotels for example – if they do not have adequate protection, either by persuading management to shut down, or by walking out. NO KIT, NO WORK.
People not at work are setting up highly effective mutual support networks in their communities.
That’s a lot to have learned in a few weeks, but it’s not all. We’re learning, through lockdown, ways of daily living that had been taken away from us – people are realising they’ve been working too hard, delegating too much of the care and education of their kids, delegating too much of the care of their older people, and relying too heavily on long and vulnerable supply chains for their necessities, especially food. They’ve learned above all that they like to have opportunities to be kind.
This pandemic isn’t the biggest crisis we face. Far bigger is the crisis of global warming. Yet there are similarities between these crises. Both are killing large numbers of people. Both are global. And the only solution is radical change of the economic system, mediated through participative and decentralised democracy.
Some of the things we’ve learned from this epidemic are directly transferable to the fight against global warming. Bulldozing primary forest is as lethal through its huge impact on global warming, as it is through the setting free of new viruses. As we come to understand more intimately the unsustainability of monoculture of pigs we’ll be able to more confidently reject the crazy proposal, supported by the Scottish Government, to replace Scotland’s old forests with monoculture quick-growing trees to capture carbon, harvesting these trees frequently to burn them in power stations – ‘Bio Energy and Carbon Capture and Storage’ or BECCS, which is nothing more than a capitalist scam.
One of the construction sites which was shut down last week on the insistence of workers was the building of a new gas power station at Keadby, near Scunthorpe. The workers saw this as work which was only essential to the company (SSE, headquarters at Perth), not to them or to the rest of us. It’s a short step from here to seeing the nonsense of building a new fossil fuel power station at the very point when we should be argueing, right now, for a Just Transition away from North Sea oil and gas. The construction workers will have jobs which are truly essential to all of us, and which will put their essential skills to better use. And we will be able to meet our carbon targets without resorting to carbon capture.
The action by London bus drivers to provide free bus travel puts us into a strong position to argue right now for publicly owned, democratically controlled, decarbonised and free public transport across the board. What’s more, people are already talking about how good it is to have less traffic on the roads. They know their health is benefitting from reduced air pollution.
I’ll finish by coming back to the immediate priority of saving lives. There are three things we can all do to save lives, on top of social distancing. We can encourage people in our communities and networks, particularly older people, who develop symptoms they think may be due to coronavirus, and become breathless, to phone for an ambulance if they can’t get through to NHS 111 or their GP. It’s become clear that many people are uncertain how ill they should be before calling for help, yet we’ve also learned that breathing difficulty can get worse rapidly, and that getting to hospital quickly gives people a better chance of being treated successfully. This decision isn’t easy to make, especially if you live on your own, or even for the people living with you. It can help to give your phone number to any older people you know so that they can at least speak with someone if they can’t get NHS advice when they need it.
Secondly, it’s also become clear that some people who suddenly become ill in other ways – they think they may be having a heart attack, or a stroke, or they have breathing difficulty because of COPD or asthma which has got worse – are hesitating about going to hospital at all. They may be frightened of catching the virus, or of putting further strain on the hospital and the ambulance service – or both. They may delay phoning, or even not phone at all. They can be supported to understand that although there is a risk of catching the virus if they go into hospital, the risk of not going into hospital is more certain. Paramedics are reporting that people are dying at home with these common non-Covid emergencies – or getting to hospital too late to be treated successfully.
Thirdly, we can join the swelling chorus of people demanding better PPE and testing in care-homes – for the sake of both residents and workers. It’s an on-going scandal that the Government continues to be slow to respond to the needs of care homes, and to be less than open about the numbers of deaths of people in care homes caused by this virus. In France, where care-home deaths have been added to hospital deaths in daily reports since early in their epidemic, around 50% of all Covid deaths have been in care homes. The lack of respect shown by the UK Government for people dying in care homes by not even counting them is despicable.
This pandemic is frightening – people are dying around us in appalling numbers, and our governments have failed us. But the virus has brought with it a determination among people everywhere to change the way our world works. Nothing could be worse than a return to ‘normality’.
Taking a battering. Will North Sea oil withstand the coming Covid-19, world recession and Climate change storms?
For over 40 years the North Sea oil and gas industry has been hailed as Scotland’s economic and industrial crowning glory. But economic dips and global price wars have seen the industry drop in both output and workforce over the past decade. And now, the most-deadly of confluences- a Coronavirus pandemic, a global economic recession and a rapidly closing climate crisis- confront the industry with its hastened demise.
In this brief paper we examine the closing economic vice on the industry- a crashing oil price against a sudden and historic decline in petroleum demand- as well as the realities of the urgent need to cut and eliminate carbon emissions in order to offset an impending environmental catastrophe.
But here we will argue that rather than crises spelling the death-knell for workers and their communities, new industries requiring new skills and more jobs should emerge via a Just Transition that can offer workers, their families and communities hope for a secure, bright and clean future.
In his Black Gold Charles More dates the origins of the UK’s North Sea industry to a day in the early 1960’s when a Dutch family’s garden caught fire. Initially investigating for wartime explosives, the authorities eventually discovered that the fire was from an out-burst of gas from hydrocarbon bearing seams that ran west out to the North Sea- towards the UK. Initially, interest in North Sea hydrocarbons was restricted to natural gas- as a cheaper and cleaner option to town coking-oven gas- but with the founding of a Department of Energy with a sovereign security of supply remit, oil, which was found in equally abundant reserves, became a growing area of interest.
Then following a humbling miners’ strike in 1972, followed by the Yom Kippur war and subsequent OPEC oil embargo and price shock, gears were shifted to put UK Continental Shelf (UKCS) oil production (and nuclear power)- on high priority as energy security hedges. Subsequently a Labour government priority became the setting up of a British National Oil Corporation (BNOC) alongside a similar gas enterprise- British Gas, to ensure the fullest exploration and extraction of North Sea assets.
In late February Scot.E3 released a hitherto unpublished paper which in great detail explained how an intricate range of taxation vehicles and regulations had encouraged oil companies into the North Sea basin by ensuring that blocs would be virtually given away by the device of zero-valuing proven oil and gas deposits whilst also ensuring that capitalisation would be subsidised, investment risk deferred to the tax payer- along with future decommissioning liabilities.
The exploitation of offshore oil resources however, failed to realise any power-generation security of supply in that the oil from the first drillings (Aramco Montrose field developed 1967, BP Forties field developed 1969 and the huge Shell Brent field developed 1971-76) all proved to have oil totally unsuitable for burning in power stations. But nevertheless, UK Continental Shelf (UKCS) oil was able to provide up to 70% of crude for the purpose of refining into transport fuels. But the reserves were substantial.
And overnight the east of Scotland ports were transformed into oil and gas bonanza towns. Texans, Uzbekis and Arabs with exploration drilling skills flocked in- to be followed by newly recruited oil and gas workers with substantial numbers from the declining Scottish shipbuilding industry. And here it is worth noting that at its peak at the time of the millennium, total UKCS employment was around 600,000.
For Scotland, the offshore waters that proved to be the most fruitful were in the Central North Sea sector where at its peak, over 50% of all N Sea offshore activity took place- the more remote North N Sea and West of Scotland sectors being later in development. And with continued tension between the big OPEC producers and the ‘west’, up until the early 2000’s the UK Continental Shelf resource looked certain for continuous development- albeit on a slight declining output expectation.
DECLINE AND FALL
Oil, and to a lesser extent, natural gas, is the most necessary commodity on the world market. It is also the most precarious and volatile. Slight fluctuations in global growth, political tensions, commodity markets speculation- and more lately, growing environmental concerns, all influence a vast capital intensive and continually technologically evolving industry.
So with these factors in mind we have to then consider the status of the UKCS oil business as both marginal- in terms of total resource strength- as well in terms of exploration, development and extraction costs. Hence the tax and subsidy fiscal environment that the industry has enjoyed under successive UK governments since 1970 as explained by Juan Carlos Boue. But with a vastly expanding global hydrocarbon resource base, it was inevitable that a tendency to over-production would lead to a continued trend of downward prices- a trend that the high cost UK oil business would find impossible to compete under.
Wars are good for oil- particularly wars in the Middle East global energy hub. So some 20 years of Iraq-Iran, the US/UK- Iraq conflict has been good. But in 2014, OPEC led by Saudi Arabia started an over-production war in order to kill off the burgeoning US shale oil industry- which it virtually did by driving oil prices at one point down to $14 per barrel- only to be followed by an oil price 6 month long depression of a price at around $35-40 per barrel. And it is this historical juncture of 2014 that has since cast a shadow on the future of the UK oil and gas industry.
So it is 2014 we should use as the pivotal point where we see the immediate loss of 75,000 offshore and onshore support jobs, after which there is a marked decline in both employment and investment- as well as a weakening of world oil prices alongside a further expansion in marginal cost producers entering the market. By 2015 total N Sea related job losses were put at 185,000.
UKCS Report Sept 2019
The balance of offshore UKCS jobs is elsewhere in the Irish sea and West of Shetland.
The oil price recovery since mid-2014 has been patchy but generally upwards. Contract prices have on occasion held at around $100 per barrel, although more recently, $85 pb has tended to be the average price which has been sufficient to maintain global output at a growing over-capacity level. Once again OPEC has attempted to control over-capacity by throttling out-put in a bid to kill off the higher cost and marginal cost fields. In this endeavour, they have sought the cooperation from Russia- a joint venture that although unstable, was able to drive down prices from the $65 pb at which 2020 opened.
But 2020 opened with the signs of a global economic recession. And now the Covid-19 pandemic.
PRICE CRASH…AND GOING DOWN
2020 began with oil prices at around $65 per barrel- which for most N Sea production requiring a $40-50 as a ‘comfort zone’- looked set to ensure a good rate of return on the more ‘mature’ N Sea infrastructure. Output from the N Sea is divided into two grades; Brent and N Sea Light crude. The Brent grade due to its viscosity and chemical content characteristics is a ‘premium marker’ grade, which along with West Texas Intermediate (WTI) provides the benchmark prices by which world traded oil prices are measured.
By early February 2020 the international oil markets had come to realise that a forthcoming pandemic was about to hit an already faltering global economy- and this, combined with the OPEC-Russia oil price tussle- was about to have a massive impact on the future of whole sections of the oil industry- let alone immediate oil prices.
By mid-February N Sea oil and gas prices were ($ per barrel or unit):
N Sea Light 25.76
Natural gas 1.484
Then by 17th March (at which NYMEX trading was suspended) prices were:
N Sea Light 18.27
And of 20th April:
N Sea Light 15.05
These prices are subject to speculative swings and as such give no certainty to which point the oil and gas prices will level out. But with world oil and petroleum products storage at about 98%, there is clearly little- if any room- left for further production above what is an already collapsing rate of consumption. And it is also clear that world prices for the foreseeable future are likely to remain well below the cost of N Sea production.
But by the morning of 21st April the Financial Times, in a departure from its usual austere and responsible mode, was in full panic flight with a front page screaming about how for the first time ever the commodity markets had turned negative. Overnight the price of premium grade crude oil had been trading at minus $40 dollars per barrel. And elsewhere analysts were suggesting a possible market intervention by producers and traders alike where for the foreseeable future oil has a traded ‘floor’ where a demand-led ‘swing’ of between $10-20 per barrel would be permitted.
However, such a ‘swing price’ would eliminate the higher cost producers such as the US shale sector, the Canadian tar sands, about 35% of OPEC members- and with certainty- the entire North Sea operation. But in the first stage of the crisis many big drilling and appraisal contractors are already cutting back on their operations with some 40% of forward investment cut overnight and hundreds of workers sacked under force majeure terms with neither redundancy pay nor furloughing support.
If we look at the employment profile of Scottish workers engaged in N sea oil and gas we find around 110,100 overall in the direct production sector. And if we then factor in a c.£45,000 per capita annual income, this translates into £4.95 billion in total earnings of which some c.£3 billion constitutes disposable income into the regional economy per year.
If we look at recent job loss events in the Scottish economy (going back some 30 years) we find that losses in coal up to 2000 were 10,100 and steel (Ravenscraig) 14,000, pale by comparison to what could happen in oil and gas losses. By any measure the present situation represents a schism from which point the status quo is irrecoverable. The terminal collapse of UK oil and gas is now a possibility, which for Scotland would be an economic catastrophe.
Oil has no cover of long-term contracts. It is a Just-In-Time commodity which in the past has been robust enough to weather any market storms. But as Goldman Sachs have reported, the free market advocates of the US oil business have just issued an emergency appeal to the Federal Reserve for a $600 billion bail-out. And at the same time Brent has been trading at a mere $21.54 with its sister marker grade, West Texas Intermediate at $14.85- and falling.
The International Energy Agency now reckons that over 1 million oil and gas jobs will go by the second quarter end of 2020.And if it comes to screwing more effort and more oil out of the workforce- then forget it. Since April 2014 to January 2020 North Sea oil workers have contributed to a 16% increase in annual productivity from an offshore workforce cut of 38%. Furthermore, almost punitive working conditions of 17-hour shift on a 7-day week, with a three week onshore/offshore regime have been imposed- what some workers have suspected as being ideal conditions for the cultivation and transmission of the Covid-19 Coronavirus.
The confluence of the Covid-19 pandemic, a protracted global recession and a mounting antipathy to hydrocarbons in what is now widely perceived to be a growing climate crisis make any return to an oil and gas status quo inconceivable. And from this a North Sea high cost marginal offshore industry faces a bleak future. But the principal asset of that industry- its workforce could be easily redirected to a green economy urgently in need of a growing renewable infrastructure.
The North Sea workforce embraces a wide range of skills only found in the most modern production processes of construction, shipbuilding, aerospace and chemical engineering. This young workforce- average age 34 years- could easily be set to task in a new vertically integrated renewables industry where point of power production to plug via a publically owned and accountable energy company could provide Scotland with a secure, safe, secure and equitable future. For that, a Just Transition is crying out.
Brian Parkin 22nd April 2020.
Goldman Sachs. Financial Times, 22nd April 2020
IEA. Energy trends April 2020.
Oilprice daily bulletin quoting Bloomberg, New York 20th April 2020.
Charles More Black Gold: Britain and Oil in the 20th century. Bloomsbury, London 2011.
COP stands for ‘conference of the parties’. Organised by the United Nations, it’s normally held on an annual basis and it is the place where the nations of the world come together to discuss policy on climate action. So to give it its’ full title COP26 is the 26th annual Conference of the Parties to the United Nations Framework Convention on Climate Change.
COP 26 was due to take place in Glasgow in November 2020. However, the actual event is always preceded by a number of inter-governmental meetings. These have not taken place because of the global pandemic and as a result it has been postponed until 2021. The new date is not yet known. At the moment Glasgow is still expected to be the venue.
A history of failure
The first COP was held in 1995 in Berlin. It has taken place every year since then. 2020 will be the first year that a COP has been postponed. In terms of making an impact on greenhouse gas emissions the COPs have been an abject failure. The two most common greenhouse gases are carbon dioxide (CO2) and methane. When COP 25 took place in Madrid at the end of 2019 the amount of carbon dioxide in the atmosphere had risen 67 parts per million by volume (ppmv) above what it was when the first COP met in Berlin. To put this in perspective CO2 levels increased by more during the 25 years of COP discussions than they had in the previous 200 years. Methane levels have tripled since 1995. Greenhouse gases act like an insulating blanket over the earth’s atmosphere and are responsible for rising global temperatures. So the massive increase in the amount of these gases in the atmosphere is the reason why the climate crisis is now acute and why rapid action to cut emissions is so important.
The Paris Agreement of 2015
Back in 2015 the COP (21) took place on Paris. The conference ended with an agreement that has since been ratified by 189 out of the 197 countries that participated (The Paris Agreement). Ratification committed countries to developing plans that would curtail global temperature rise to less than 2 degrees centigrade. Those who have not ratified include some important oil producers. Moreover, the USA ratified under Obama but has now withdrawn.
In principle ratifying the Paris Agreement commits countries ‘to put forward their best efforts through “nationally determined contributions” (NDCs) and to strengthen these efforts in the years ahead.’ The realityhas been that progress has been negligible. The agreement is essentially voluntary and avoids specific targets. Patrick Bond notes the ‘Agreement’s lack of ambition, the nonbinding character of emission cuts, the banning of climate-debt (‘polluter pays’) liability claims, the reintroduction of market mechanisms, the failure to keep fossil fuels underground, and the inability to lock down three important sectors for emissions cuts: military, maritime transport and air transport.’
Along with committing countries to regular reporting on progress the Paris Agreement also scheduled 2020 and COP26 as a major milestone at which all the countries would need to assess progress. Had the COP gone ahead in November an honest assessment could only have been that the Paris Agreement has been a failure. The failure will have intensified by the time COP26 takes place in 2021. No one should have high expectations that COP26 will take action to address this failure but it is an important opportunity for the climate movement to hold the rulers of the world to account. Success for our side must mean a bigger, stronger, better-rooted movement that develops the strength to insist that governments take action.
COP fault lines
The COP is dominated by the big powers. So in the negotiations there are sharp divisions between the major industrial nations that are responsible for most greenhouse gas emissions and the global south, which endures the biggest impact of climate change. These divisions were much in evidence at COP 25 in Madrid. At the COPs and in the run up to them there is also a great deal of activity from non-state organisations. Businesses, NGOs and union federations lobby before the event and can obtain credentials that enable them to be within the main conference areas. There is of course a huge imbalance in resources between the corporate lobbyists and the climate campaigners. Groups that represent women, indigenous people and poor people struggled to have their voices heard within the conference – indeed in Madrid some were excluded for holding a peaceful protest. The climate movement is mostly excluded from the conference zone by barricades and police; we make our case on the streets and in meetings and the counter summit. This will be the case in Glasgow.
Why should we organise for the COP?
From the start the COP process has operated within the domain of market economic orthodoxy. Crudely it has assumed that market forces will drive a move towards less carbon intensive technologies and hence reduce greenhouse gas emissions. There have indeed been significant developments in sustainable technologies – particularly wind and solar. And yet at the same time the big energy companies have also pursued a ruthless drive to exploit new hydrocarbon resources in a way that is completely incompatible with even the most modest targets for limiting global warming.
COP 26 will take place in 2021 in the economic and social aftershocks of a global lockdown as a result of the Covid-19 pandemic. Mobilising for the COP is necessary because the event will be the occasion for a huge onslaught of ‘greenwashing’, aimed at persuading us all that the leaders of the world know best, and that the market, ‘business as usual’, can protect us. Now more than ever we know that ‘business as usual’ is not simply ineffective in face of global crisis, it costs lives. So building for mass protest in Glasgow is necessary, but is only part of the ongoing struggle to win a just transition to a people centred zero carbon economy.
Myles Allen has made an important contribution to our understanding of role of human activity on the global climate. He was interviewed on Radio 4’s ‘The Life Scientific’ last week. Well worth listening to the podcast on BBC Sounds.
UCU, NUS and other organisations have got together to produce themed resources on the climate crisis. The aim is to get as many schools, colleges and universities as possible using the resources in the week 10th – 14th February. The resources are relevant and useable at any time and we’ve added the link to the Resources page on this site. If you are a student or work in education do check them out and think about how they can be used in your institution.
New Year 2020 is a critical time to be taking the campaign for climate action into our workplaces. Below we’ve pasted a model motion that can be used or adapted in your own workplace context. (You can also download a PDF here and a Word version here. If you have already raised a similar motion in your workplace we’d love to hear about it and would be pleased to share the text (with permission) so that others can build on your experience. We think there’s a particular case for developing clear policies in education, from school through to university, and would be really interested to get feedback on particular demands and actions for the education sector. Please send feedback to firstname.lastname@example.org
Draft model motion
This (branch/region/committee/trades council/union/conference) notes the urgent need for action on the climate emergency, both in response to existing negative impacts such as extreme weather, fires, droughts, floods and loss of habitat and species; and to avoid the catastrophic and irreversible climate damage which people increasingly realise the world is on course for, after the 2018 Intergovernmental Panel on Climate Change (IPCC) report.
We recognise that big business, the military and the richest individuals are responsible for the vast majority of climate change, yet the global working class and poor are disproportionately at risk. A just transition (that protects the lives, livelihoods and rights of the poor and disadvantaged) to a decarbonised economy is not only right, but is the only way the movement against climate chaos will secure the mass support needed to win, and avoid a rich minority protecting themselves at the expense of the planet and the vast majority of people.
We congratulate the school students striking around the world for real climate action and welcome the decision of the TUC to support them and call for a solidarity stoppage. We note that many workers did strike on 20 September 2019, despite Britain’s repressive legislation, by campaigning to pressure employers not to apply sanctions to climate strikers.
We note that there is discussion about the possibility of making Friday 1 May 2020, traditionally International Workers’ Day, also a climate strike. We note that the UN ‘COP’ climate change conferences have become a major focus for campaigners, that COP26 will be taking place in Glasgow from 9-20 November 2020, and that many organisations are already making plans.
We resolve to:
Publicly state our support and solidarity with the climate strikers and the wider movement for rapid and effective climate action
Invite climate strikers to speak at our meeting
Educate our members about the climate emergency
Give practical support to the climate strikes, without adults taking it over. This will include asking schools and local authorities to commit to imposing no sanctions against striking students, promoting the strikes on social media, encouraging members to attend, taking our flags or banner if agreed with the strikers. If requested, it could include co-hosting events, providing sound systems, staging and stewards, using our public liability insurance, help with press releases or police liaison.
Support workers joining climate strikes and maximise member involvement
Work with other local labour movement and environmental organisations to arrange discussions locally and within workplaces about practically how workers and unions can learn from 20 September, join climate strikes or show solidarity
Promote through the labour and climate movements the idea of making 1 May 2020 a climate strike as well as International Workers’ Day
Organise to make COP26 in Glasgow, 9-20 November 2020, a major focus of campaigning for effective action on the climate emergency
Call on employers and local authorities to declare a climate emergency and involve workers and communities in planning, implementing and monitoring to rapidly achieve zero carbon emissions, including ending investments in fossil fuels
Call on employers to recognise union green/environmental reps and give them work time for their activities
Create climate action groups at workplace level and within union structures
Look for opportunities for unions, communities and the climate movement to work together, for example for improved housing and public transport
Call on unions and the TUC to back the climate strikes, call and build action
Call on our union to carry out a major exercise to understand the potential positive and negative impacts of the climate crisis and responses to it on employment
Campaign for a legal right to strike and to repeal all legislation that makes it harder to strike over climate
Discuss what climate-related demands to include in collective bargaining, including ones which could be the basis of a lawful “trade dispute” under current legislation and to call on our union to produce guidance on this
Ensure that unions are visible as relevant and useful organisations within the climate movement and that participants are encouraged to join a union
Demand massive public investment in the jobs required to address climate emergency, including massive improvements in renewable energy, housing and public transport
Send this motion to our local trades union council, up through our union structure, and to local SNP, Labour Party and Green Party branches