77 pages of neoliberal propaganda, with passing references to climate change, inequality and racism to soothe the voters – all empty rhetoric, devoid of any proposals on how to address these social injustices other than through increased, top-down private sector activity.
But what else did we expect from a group of eight people hand-picked by a Government wedded to ‘Sustainable’ Growth (sustainable for capitalists) and to extracting the last drops of oil and gas from the North Sea, and which put profit before people’s lives by obsequiously following the UK Government’s response to the Covid-19 epidemic? 4,878 people have died in Scotland as a result of the epidemic at the last count on 16th June. People are still dying as the report is published.
That Graham Smith, previously General Secretary of the Scottish trade Unions Conference, which represents more than 500,000 workers, has put his name to this report is an ultimate manifestation of the successful co-option by neoliberal governments of the trade union bureaucracy.
On Just Transition we’re given “There is the jeopardy, as well as the opportunity, of the transition associated with climate change”, along with carbon capture and storage in the North Sea, and “positive behavioural change”.
This is not the time to “recast a new model”, or to follow “abstract arguments around the creation of new institutions”. By which the Group presumably means a National Climate Service, consisting of the National Investment Bank, a publicly owned Energy Company, and the creation of 100,000 carbon saving or carbon neutral jobs essential for improving the quality of life for people across Scotland, with training opportunities for all those who have lost their jobs as a result of the pandemic, the many more who will soon lose their jobs as the recession bites, and those who didn’t have a job to start with.
Instead we should rely on the “might of the private sector” to create more jobs, because (logically?) that’s where 79% of jobs currently are. The “backdrop” is “constrained public sector resources”, which we know is nonsense.
This has to be based, the Report says, on “transforming some aspects of the relationship between business and the Scottish Government” a relationship which is working “reasonably well for financial services, agriculture and renewables”, but not well enough in other sectors. “If one party in a relationship says it’s not working, it isn’t. This could be “an opportunity for the Government to draw on businesses to second senior executives”. The Group reminds the Government that an election isn’t far away, so it had better get on with improving its relationship with business if it doesn’t want to lose its voters. The tone is overbearing, arrogant and amounts to bullying.
Apart from the pressure of elections, and the need to create more private sector jobs fast, there’s no hurry. Change will take time and will rely on “patient capital”. We need to build an attractive prospectus for inward investment. We also need to develop a new “pragmatic approach to regulation and planning”, for which read privatisation.
Overall, “recovery” is taken to mean recovering growth, sticking to the 2015 Scottish Economy Strategy with its ambition for Scotland to reach the top quartile of OECD countries, as measured by GDP.
There is much further detail in the Report but given that the principles are set in the four pages of the Foreword, it’s questionable whether it’s helpful to study the proposals further.
The underbelly of the report which we can focus on is the triad of trusting the private sector to alleviate social injustice, which history has demonstrated time and again fails; the lack of urgency in relationship to global warming; and a top-down approach as opposed to grassroots leadership, which history has plenty to say about too.
So here, in the flesh, is the “madness”, that ScotE3 and many others have warned against. If we allow these recommendations to fool us, and don’t promote alternative, coherent and more attractive recommendations quickly, we will have lost any possibility of slowing down global warming, and of effectively addressing poverty, inequality and social justice in general. We know, already knew, that only a mass movement will save us against significant attacks from capitalism, of which this Report is the latest.
Matthew Crighton’s view of the report: Green Recovery – what a disappointment
Yesterday started with hearing on Radio 4 the Pope say that the recovery must be ‘just and equitable’. He called for integrity not hypocrisy from politicians. Then came Mark Carney on how getting to net zero is part of the solution to the crisis, for companies as well as countries. He reminded us that net zero is ‘the law of the land’. Would these two be the warm-up acts to the revelation of truly transformative recommendations from the Advisory Group on Economic Recovery?
What a let down, then, to hear at lunchtime from ex-banker Benny Higgins who chaired the Group, set up “to advise the government on actions for economy recovery but also to build a fairer, greener and more equal society”(Nicola Sturgeon 17 April). There were lots of words from him and Nicola, but little useful content that I could find.
There are mentions of inequality in this report – but not one of them comes in the Recommendations! Nothing here for the Pope.
There is a section on prioritisation and delivery of green investments. It reads quite well – but it stands on its own and doesn’t permeate into any of the other recommendations. This is ticking the green box, not delivering a green recovery. The authors haven’t grasped the zero carbon imperative which Carney reminded us of. Instead of using the recovery to drive urgent decarbonisation action, they want to use green investments to boost the economic recovery which is the subject of the other 23 recommendations.
Left to Benny Higgins and his crew, that would be a very conventional recovery. One good thing is that it does call for a boost to investment levels, but it has no suggestions about how to do that apart from asking Westminster for more funds or borrowing powers. No plan for Scottish Green Bonds here, no call for a massive increase in the capitalisation of the Scottish National Investment Bank, just a suggestion that it should invest in housing – which looks dangerously like a dilution of its commitment to funding a Just Transition.
It’s a set of headings taken from the conventional economic development text book which has brought us to the dire state our economy was in before Coronavirus. Why set up an Advisory Group when you have Scottish Enterprise to write this stuff, and do a better job? It’s as if a Green New Deal had never been proposed!
One idea which got some attention is a business-led Scottish Jobs Guarantee scheme which would offer employment for at least 2 years to 16-25 year olds. This is a worthy objective but it misunderstands the challenge. It’s based on the Edinburgh Guarantee, an excellent initiative to address problems of a relatively small layer of young people not in education, employment or training at a time when unemployment was relatively low. We are, however, facing a scenario in which businesses of all sizes will be struggling to retain existing employees, let alone take on new youngsters.
The reference point has to be the mass unemployment of the 1980s and 1990s and the appropriate responses have to include a publicly-led intermediate labour market programme – a Future Green Jobs programme which funds rate-for-the-job employment in green projects to give people skills needed in decarbonising the economy. Not just for young people, there must be a clear offer to the adults who lose their jobs as recession bites. Apart from the expansion of PACE services, which support people facing redundancies, and platitudes about skills and lifelong learning this report offers nothing to them. The Advisory Group doesn’t even want to try a Universal Basic Income.
Disappointed doesn’t do justice to my feelings about this report! Instead of being the climax of a gig with the Pope and Mark Carney as warm-up acts, this was like an embarrassing local band trying to sound like they could share a stage with the stars but fumbling their words and striking some discordant notes as well.
Now that this report has come, and will probably sink without trace, we need to look forward to something sharper and more radical from the Just Transition Commission (it’s Call for Evidence is open until 30 June). And we need to continue to press for the Scottish Government to come forward with a list of specific programmes and policies which can make a difference, like a massive energy efficiency programme for our cold and draughty homes. Nicola Sturgeon can still bring on policies for a just and green recovery but she won’t find much in this report to help her.
The supporters of nuclear energy are at it again, attempting to position it as key to a ‘green’ recovery from the Covid-19 pandemic, and as part of the solution to the climate catastrophe. In this post, first published at www.rs21.org.uk and republished here with permission Scot.E3 activist Brian Parkin exposes the dangerous myths of nuclear power.
Climate of doubt
Nuclear power has made many bold claims on economic viability, safety, reliability and environmental sustainability over the years. Again and again it has been disgraced. But nuclear power is the come-back-kid when it comes to energy technology reincarnation and rebranding. Backed up by state revenues, corporate confidentiality and operational unaccountability, the nuclear industry remains the biggest fraud of the industrial age.
One of the most persistent frauds is the claim that it is the most technologically advanced form of electricity generation available. In fact, the global nuclear inventory is ageing and, as safety fears mount, it delivers ever-decreasing load factors (efficiency) and availability (the amount of time when energy is produced). The industry persistently claims that past operational problems are being resolved with each successive advance in reactor design and waste management improvement. It is forever promising that technological leaps will bring the cost of nuclear-derived power inexorably down.
The advocates of nuclear power now see the current economic and climate crises as an opportunity. Nuclear power still holds onto its reputation as a clean source of energy since it produces neither acid-rain precursors nor CO2 emissions, and does not rely on relatively short-term finite fuel resources. Yet, despite this continually revamped argument, nuclear power cannot address either the prohibitive costs reality nor the safety issues that inevitably arise from an energy source created by fallible humans attempting to harness a power source hotter than the sun. It also hinders rather than advances the path to a low-carbon future.
This article will explain why the periodically disgraced nuclear dream is so dangerous, explain the political power that the industry can mobilise, and resist the arguments of supporters of nuclear power, such as George Monbiot, within the climate movement.
Today, nuclear power accounts for some 10.5% of all electricity generated worldwide. This power comes from a total of 457 reactors across a total of 31 countries.Initially, the promotion of nuclear power generation was limited to the post-war ‘spheres of influence’ contest between the Soviet Union and the USA that extended their influence via the means of offering client states a various range of infrastructural vanity projects. This arrangement was later complicated by the rift opened up between the USSR and China, mainly in the Indian sub-continent, with India and Pakistan respectively choosing Russia and China as economic allies.
Another factor was the post-war craze for the developing economies (‘Third World’ in the terminology of the time) to obtain sexy totemic technologies that marked their entry into the ‘First World’ via the procurement of mega-projects that gave swagger-power to the various state bureaucracies but little in terms of gross benefits to what remained impoverished populations. This often proved to be the case in countries where gross electricity demand was low and where the necessary distribution and supply networks were near non-existent.
In fact, what these projects did, via the means of fuel-cycle and operational technology, was to increase the subordination of developing states. Any illusions of sovereign security of supply and energy self-sufficiency, printed on the tin of the latest Pressurised Water Reactor or Boiling Water variants, were quickly blown out of the water. Operational ‘teething troubles’, low load factors and poor availabilities left developing states unable to pay off debts acquired throughout the construction, commissioning and life-time operation of reactors that had not been needed in the first place.
Nuclear power relies on the controlled heat energy released by the separation (fission) of the nucleus of an enriched heavy radioactive element, in most cases Uranium235. This process is therefore closely related to that of the uncontrolled fission of a nuclear weapon. With further ‘enrichment’, a totally artificial and radioactive element, Plutonium, can be created: the stuff of thermo-nuclear ‘hydrogen’ bombs. Consequently, it has always been a matter of international concern that civil nuclear programmes may well lead down the road to nuclear arms proliferation.
From its inception in 1956 at Windscale (now Sellafield) in Cumbria, nuclear power in the UK has been driven by the military imperatives of weapons grade material: supporting US missile ambitions, offering a means of repaying the US-UK lend-lease debts, while ensuring that by ownership of a military nuclear programme, that the UK would be ensured a seat on the UN Security Council. In this regard the post-war Labour government was as culpable as successive Tory administrations.
The International Atomic Energy Agency (IAEA) was established in order to promote nuclear power, albeit within a tightly set-down set of protocols policed by the United Nations. However, by this point nuclear weapons ownership had already expanded beyond the post-war Cold War four of the US, USSR, France and the UK to China, India, Pakistan and Israel.
The other IAEA concerns were the standardisation of operating standards, mainly in order to create a safety culture as well as control over the fuel cycle and the manufacture of fuel rods and subsequent ‘waste management’. The latter issue was never satisfactorily resolved either technically or economically. What these arrangements have ensured, though, are techno-dependencies whereby fuel-cycle management has been out-sourced to the wealthier ‘nuclear club’ states for fuel manufacture, enrichment and the alchemy of fuel recycling.
Reactor enigma variations: jam tomorrow
Over some 55 years of reactor design and development, little in the way of a standard ‘safe’ reactor consensus has arisen. This is largely due to state-sponsored nuclear competition looking for export opportunities.
Initially, the design of reactors was a military thing. In the case of the US, this meant a Pressurised Water cooled Reactor (PWR), which over time became the dominant and preferred reactor for US power utilities. Elsewhere, designs favoured other means of moderating (slowing down) neutron release via different core materials such as graphite or heavy water, while others favoured different primary heat/cooling cycle systems such as pressurised light (ordinary) water, heavy water, gas (usually carbon dioxide) or sodium (liquid salt). But whatever the means, the sole object remains to raise super-heated steam in order to drive a steam turbine in order to produce electricity via an alternator. Whatever the glitz, nuclear power is a steam-age technology.
For over 50 years, nuclear power in its civilian guise has promised clean and infinite energy at a price ‘too cheap to meter’. In every respect, it has failed abysmally: due to impossible engineering challenges, rocketing costs, ever-demanding and failing safety systems and a perpetually irresolvable economic and technical waste management issue. Despite the continual claims that, ‘this time we have really got it right’, there is still no standard and generic design and operational culture.
When this is combined with newer imported costs and construction delays, the consequence has been that nuclear power has never been able to operate in a ‘free’ market, without state subsidies and a skewed regulatory environment.
Meanwhile, epic nuclear ‘incidents’ such as Windscale (now called Sellafield) (1957), Three Mile Island (1979), Chernobyl (1986) and Fukushima (2011) have all resulted in massive nuclear releases to the outside environment with melt-downs and huge reactor fires beyond the scope of established safety procedures. With each such incident, the nuclear ‘community’ has had to pause, think and then go into inventive mode regarding another excuse and a massive falsehood regarding the extent of environmental damage and long-term radiological health assessments.
Then, after a respectful moment of silence, this has been followed by another vast PR offensive, garnished with even more Jam Tomorrow.
An energy technology looking for a cause
Nuclear power has met each set-back with a new justification for its existence: security of supply, cheap power, clean power, infinite power and a source of power beyond the control of working class militancy (in the case of the UK, the miners). And at each challenge, a new fall.
But with the realisation of an impending climate catastrophe, the advocates of nuclear finally think that they have a irrefutable case. As nuclear power has no operational CO2 footprint, it is touted as the environmental answer for clean and sustainable baseload power. They foresee a new and massive worldwide programme of nuclear reactor construction, standardisation and replication costs that will set generating costs on a downwards trajectory.
One persistent argument is that the ‘replication costs savings’ would be possible if only the industry world-wide could agree on one generic reactor design that could be used as the architecture for an ongoing sequence of revisions. The new basic stations could be built in line to growing capacity demand and with an actual reduction in capital costs as new orders came on stream. Not so much as jam tomorrow as pie in the sky.
However, such ‘replication savings’ arguments persisted within the UK nuclear cabal up until 1988, where at the Hinkley Point C nuclear inquiry, the UK Central Electricity Generating Board (CEGB) insisted that the Hinkley Point PWR would be the first-born of a ‘small family’ of UK PWRs. This claim was blown out of the water by evidence submitted by the National Union of Mineworkers.
The nearest thing that an international nuclear agreement has come to is an emerging view that the Pressurised Water Reactor offers the best basic model upon which future reactors should be based. The US Westinghouse (now General Electric) AP100 PWR is now being copied by China as an export model within its developing ‘sphere of influence’. It also forms the basis for technically and economically disastrous ‘third generation’ European PWR (EWR) at Flamanville in Normandy and Olkiuoto in Finland. The EWR is also the reactor of choice for the massive cost and schedule over-running Hinkley Point C project in the UK, and has been accepted as the design favourite for China’s Taishan 1 project which started in December 2018.
A little jam today?
Beyond the third generation of PWRs there are a number of other technical options on offer. Hitherto aimed at big capacity baseload units of reactors with a 1,000 Megawatt plus output, the nuclear industry has been looking at the development of smart grids with response capabilities for inputs from more intermittent small scale units. Within this scenario, smaller and more operationally flexible nuclear reactors are envisaged: the so-called new generation of Small Modular Reactors with capacity sizes down to as small as 10 MWe. Such SMRs could be prefabricated and shoe-horned into existing conventional power station sites.
But even if operationally proved as safe and capable of high load factors, SMRs would hardly contribute much to the capacity need as stated by the advocates of nuclear power. Given that the SMRs will be little more than down-scaled versions of already tried and tested failed reactor designs, there is little reason to expect them to behave over time little better than their bigger grand-parents.
Moreover, funding for nuclear research and development (R&D) drains from the pittance devoted to R&D for renewable energy, and the development large scale storage batteries and disaggregated smart grids which could do so much to create baseload potential for otherwise intermittent and ‘micro’ renewables.
It is a dangerous fantasy to think that nuclear power is best placed to replace fossil fuel power production. According to the International Energy Agency, the installed global power generating capacity as of 2018 was:
All fossil fuels
All renewables, including:
Statistics compiled and amended by Dr T. Wang, Statista, 3 December 2019
Meanwhile, of non-renewable fuel sources, in terms of total % global electrical power consumed:
Non-renewable fuel source
% total global electrical power consumed (2017-18)
IEA World Energy Outlook 2019.
The projection of a 65% nuclear capacity to replace all fossil fuel power plant by 2040 does not just mean the replacement of all existing carbon power generation. It also means an immediate programme for replacing all existing nuclear power plants, two thirds of which will be due for end-of-life decommissioning within the next five to ten years anyway. With no standardised reactor type and operational culture, this would mean 65% of global power generating capacity depending on a variety of plant designs for which no commercial insurability safety assurance will be possible.
Then there is the issue of waste management. Given a present 10.5% global nuclear power generation with no waste management consensus, a capacity increase of six times over presents the stuff of nightmares.
The problem of waste recovery, recycling and long-term management (storage) has so far proved insoluble for the nuclear industry. The industry adopted wet storage – large underground cooling pools – pending proper technical waste management. This was meant to be a temporary solution, but it is still used to this day.
In the mid-1970s, the UK BNFL declared a worldwide solution with the development of a Thermal Oxide Reprocessing Plant (THORP) to be built at Sellafield in Cumbria. But dogged with a continuous string of technical problems, as well as very real doubts as to the safety of the Thermal Oxide process, the THORP project with a bill in excess of £5 billion was scrapped in 1989. THORP contracts worth many billions of dollars were force majeured, and nuclear states such as Canada, France, Japan and Sweden were asked to take their waste back home.
According to a 2019 report, some 250,000 tonnes of highly radioactive spent fuel material is in wet storage in some 14 countries awaiting a waste storage solution that will never come. Meanwhile, some 2 billion tonnes of uranium mining ‘tailings’ and process waste remain untreated and with no treatment or financial liabilities settlements in sight.
This is the legacy for future generations that 65 years of nuclear folly has bequeathed. Long-life and long half-life waste radioactive elements, isotopes and their ‘daughter’ products that will last further into the future that human civilisation has taken to reach this moment.
Virtually all of the statistical information referenced above was compiled before the present Covid-19 pandemic. It also predates another global economic event: a growing global recession that has so far been eclipsed by the immediate public health disaster. Such pandemics are, like recessions, treated as natural forces: events beyond the comprehension and control of mere mortals like the ‘rational self-interested actor’, much beloved by liberal economists.
Statistics based on real and reliable evidence make projections rooted in a status quo, which itself presumes business as usual. From such vulgar assumptions, trends are discernible and tendencies towards increasing capital accumulation, urbanisation and population growth can be factored in as verities based on a dismal human condition, unfettered population growth and the persistence of the rule of capital and the inevitability of capricious markets.
Against such projections the IEA and an ever-predatory World Nuclear Association now draw on the undeniable probability of worst-case climate catastrophe to create a new age for nuclear power need. So from a current 10.5% of nuclear generated power, we have to envisage a CO2 abated 2040 where nuclear power will provide 62% of electricity. This means that 70% of all currently operating reactors will have been replaced and that every 40 years or so, all reactor capacity will have to have been renewed.
This means that forever, humanity will have to exist on the brink of a barely containable climate threat, and a source of dangerous energy at barely affordable prices for the bulk of the global population- and that forever, the deceptive alchemy of waste management will remain the radioactive legacy for generations to come. Such a projection is both hopeless and apocalyptic. It offers an eternity of business worse than usual, and it offers a totally fraudulent scenario.
Furthermore, it denies the human capacities of both hope and redemption through struggle. It denies the organised agency of a proletarian class that by 2009 (by UN estimates) had already come to comprise over 52% of the world’s population. Statistical apologists for capitalism and its compendium of various barbaric imperialist scenarios may interpret the world in many ways, but it still remains the role of a revolutionary working class to change it. For the better.
 International Atomic Energy Agency (IAEA) report 2019.
 The PWR and BWR reactor types use ‘light’- ordinary water in the primary and secondary cooling cycles.
 The IAEA was set up as an ‘independent’ agency in 1957 for the promotion of ‘Atoms for Peace’. It is located in Vienna and has 171 member states. It reports to both the UN general and Security Councils.
 Former Secretary of State for Energy Tony Benn in his statement of case for the NUM at the Hinkley Point Inquiry, went on to describe the UK Magnox reactors as little more than ‘bomb factories’.
 Israel is neither a member state of the IEA nor a signatory to the Nuclear Non-proliferation Treaty.
 The ‘fuel cycle’ covers the process of mining Uranium or to the manufacture of nuclear fuel and its waste ‘management’.
 The so-called ‘Nuclear Club’ presently comprises Argentina, Belarus, Belgium, Canada, France, Germany, India, Japan, Pakistan, Russia, S Korea, Spain, Switzerland, Taiwan, Ukraine, UK and US.
 Heavy water is water with a molecule of oxygen plus two isotopes of deuterium- a hydrogen ‘heavy’ isotope with two electrons as opposed to the usual one.
 Baseload power is electricity from a reliable round-the-clock source not subject to daily or seasonal interruption.
 ‘Replication savings’ are the economic benefits arising from series production: i.e. the ‘economies of scale’. In the UK such replication benefits were promised with the Advanced Gas-cooled Reactors (AGRs) which now make up all but one of the UK nuclear inventory. In this case the ‘savings’ ended up as double the original project cost.
 The 1986-89 Hinkley Point Inquiry was for an original proposal involving a Westinghouse Type AP100 PWR. The present Hinkley Point project presently taking place is based on an Areva/EdF European PWR (EWR).
 NUM Proof of Evidence. Parkin et al. Hinkley Point C public inquiry. Proof denied on grounds of ‘misappropriation’ of confidence and ‘purloining’ of information.
In the final part of his four part post on food production and just transition Mike Downham puts forward some ideas for the demands we should fight for and how to organise. We’d welcome comments and responses to this important discussion. You can read or download the full text here.
Choosing and formulating demands has to be collective. If a large number of people, all of whom can see the benefits of winning the demands, haven’t been involved in the process, the demands will fail. This is so obvious that it might not seem worth pointing out, but a lot of GND proposals have fallen into the trap of making detailed proposals drawn up by a small number of well-intentioned activists.
A further general point about demands is that addressing them to governments is only part of their purpose. Equally or more important is that they should reach the whole of society – workers, Unions, civil society organisations and the general public. It helps in formulating them to remember that. The purpose of demands, beyond whatever response governments make or don’t make to them, is to increase the size, diversity and solidarity of the mass movement, giving it something concrete and specific to come behind.
With regard to local food production, it’s enough for now to suggest that we need two sets of demands, one about making land available and one about educational opportunities.
Land demands will need to take land reform much further than the pallid 2003 Right to Buy Act. It’s common knowledge that land ownership in Scotland is more archaic and more unjust than in any other industrialised country in the world. For lots of reasons on top of local food production, any GND needs to confront that fundamental class issue head-on. It would not be difficult to construct an immediate demand that landowners should be compelled to relinquish tenure on a quota of their land for allotments or community gardens or educational gardens or farms producing for the local market, as long as each proposal fulfilled centrally specified conditions.
Educational demands will need to cover classroom and kitchen staffing levels in schools, teacher training, and higher education course choices and staffing, formulated in discussion with workers and their trade unions. Given the recent strong protests of unionised college and university workers, we are in a good position to discuss with these workers and their unions whether this is the moment to demand that higher education should be taken back into public ownership.
Both land and educational changes will have to be anchored by state intervention, and democratically controlled at a local level. Our demands must include these conditions.
In considering how we should organise to achieve these demands the overriding point is urgency. The urgency of climate change is widely accepted, and we can’t afford to take our eye off the climate emergency just because air quality and carbon emissions have improved dramatically through lockdowns – though this does show what can be achieved by states when their backs are against the wall. The point is also being made by a lot of people and organisations that if we’re determined not to go back to the same normal once the pandemic is under control, we should start now to get together and say whatever it is we want to say about the new normal. It could take years, with further catastrophic waves of infection, before the pandemic is under control. We absolutely shouldn’t wait to act until then. Even these few weeks before the possibility of a second wave of infection in Scotland mustn’t be wasted.
An additional point argument for urgency in relation to Scotland’s food strategy is the growing prospect of a no-deal Brexit, which could leave the shelves of supermarkets empty again, and not just transiently.
But how do we get together? Building community knowledge, consciousness and solidarity in the context of neoliberalism can take years. In Jackson, Mississippi, they’ve been at it for 40 years. The poor neighbourhoods of North Edinburgh have been at it for at least 10. We don’t have time for that. But the pandemic has created a unique context, in which governments across the world are in a weaker position, and communities in a stronger one, than at any point in the history of industrial capitalism. One immediate opportunity in Scotland is to build on the mutual solidarity networks which have mushroomed during lockdown. Some of these networks are new, while some developed from previous neighbourhood organisations. Other groups are likely to emerge as the full economic consequences of the pandemic bite. As the structure of the economy has changed over the last 50 years, with workplaces that are smaller and often distant from where the workers live, some people working from home, and the predominance of services over production, it’s become clear that we have to organise not only where we work, but also where we live. So we need to join and become active in any local formations which are concerned about the future for working class people, and for most of us there are or will soon be opportunities to do that. And we shouldn’t see existing legislation, including the legal obligations of Local Authorities, as things which can’t be swept away by a mass movement.
More will have to be done about Scotland’s food than the development of local food production. That was illustrated by the traffic chaos in Glasgow last week on the day 31 Macdonald’s drive-ins opened. But development of local food production, as an integral part of a Green New Deal focussed on both a Just Transition and a Just Recovery, bringing with it jobs and training and neighbourhood solidarity, is a good place to start. We can take on Macdonalds and intensive farming later.
In this penultimate part of his extended article Mike Downham looks at different forms of local food production. Production and local democracy are fundamental to radical change. Tomorrows final instalment explores demands and organisation.
I’ll consider local food production under four headings: allotments, school gardens, community gardens, and farms.
Allotments have a long and mostly successful history. In 1908 the Small Holdings and Allotments Act placed a duty on local authorities to provide sufficient allotments, according to demand. Originally a plot was defined as 250 square metres, based on the area needed to produce enough vegetables for a family of four. With the escalation of land prices and the erosion of local authority funding by central government, local authorities, desperate to sell land they owned, fell behind with provision. This led to waiting times of as long as 10 years in some places. Length of waiting list became a criterion for additional provision, but with the loophole that there was no statutory timescale within which local authorities were expected to meet their obligation to increase provision. By 2007 most local authorities had responded to unmet demand by simply halving the size of plots. Communities responded by trying to persuade private landowners to lease land to associations of local residents. Their efforts often failed, or leases were grudgingly granted with conditions slanted to suit the changing whims of landlords. Private sites are now common but the people working them often experience insecurity of tenure.
Individual plots are relatively affordable, at around £50 a year, paid to the site Association, who pays the landowner. Though plots are worked individually, sites are in practice usually strongly collective in the sharing of knowledge, skills, implements, plants and seeds. For many plot-holders they are an important place of belonging.
For some people, particularly those living on their own or without children, a 250 metre plot is too big, and plots are often halved. Others, who have developed the knowledge and skills needed to produce reliably good crops of vegetables and fruit on every inch of their plots, would like to expand. “I just wish my plot was bigger” they say.
School children love to garden. Without necessarily articulating it they recognise that growing veg and fruit isn’t just play but an opportunity to contribute their work to necessary production. Even nursery children can contribute significantly, their small fingers well-suited to sowing seeds, planting out seedlings and fine weeding. You have to be 5 or 6 before you can wheel a barrow, usually best if you have a partner to help you not to cowp your load of muck before you get to your destination. Digging straight trenches in gangs works well with older children. All ages like watering and love harvesting. Even weeding, notoriously unpopular, turns out to be satisfying if the task of clearing a specific area is shared between the right number of hands or hoes.
The learning opportunities in all this are enormous – I’ve heard primary teachers say they can teach everything on the curriculum while children are working in a veg garden – plants, wildlife, habitats, ecosystems, climate, weather, maths, history, the meaning of work … and of course food.
But there are certain conditions for making school gardens a success which these days often don’t exist. The first of these is that the garden has to be significantly productive. Too often school gardens are side-lined to an area which is too small, may be shaded and impoverished by trees, bushes or hedges, and may be badly drained.
Secondly, there needs to be a teacher or a parent who has gardening knowledge and skills, and the time available to plan and work the garden with the children. There’s often no teacher in the school with the necessary skills and knowledge, and anyway their timetable may not give them enough time or flexibility to devote to learning in the garden. Parents sometimes or grand parents often come to the rescue, but they are increasingly unlikely to be able to give enough time now that two or more jobs per family is the norm, the grandparents preoccupied with caring for the pre-school children.
Thirdly, the whole educational experience in relation to food only has an impact if children have the opportunity to prepare and eat the food they’ve helped to grow, as experienced by children growing up on farms or in families with allotments or veg gardens at home. Most larger primary schools have their own kitchens where the school meals are prepared. Many of these schools have school gardens, but few if any of these gardens yield enough produce to contribute significantly to meals in the school.
Secondary schools contract out the preparation of their meals, so students who don’t have the privilege of living in families which produce vegetables are one further step removed from the experience of preparing food from vegetables they’ve helped to grow.
The current community gardening movement in Scotland began in the late 60s with a renewed interest in green spaces in cities. As health and social issues for working class people have escalated during the neoliberal period, so has the number of urban community gardens.
Though there is much diversity in the design and aims of these gardens, the main driver has been social or therapeutic, rather than scale of production. In terms of physical and mental health, community adhesion and organisation, and as habitats for wildlife, community gardens have become important for a large number of communities.
Among the many benefits of community gardens, the therapeutic opportunity they offer to people with mental health issues stands out as a priority. At this moment there’s a conjuncture between on the one hand a new wave, precipitated by lockdown, in the epidemic of mental health issues spawned by neoliberalism 40 years ago and inflamed over the last ten of those years by austerity; and on the other hand the dialectic response to that epidemic now emerging in the revolutionary form of tearing up 60 years of psychiatry. Community gardens have the potential to play an important part in the new multidisciplinary mental health service.
But most community gardens are not productive to a significant scale. One reason for this is that they are generally sited on land whose fertility and soil structure have been compromised by previous industrial use. They are physically hard to work, and fertility isn’t easy to restore unless there is a farm or stable nearby. As with education, the health and social benefits of growing fruit and vegetables are enhanced if production is significant in relation to use by the number of people involved
By ‘farm’ I mean any area of land for commercial food production too large to be farmed by hand, whatever its acreage. Defining a farm according to its acreage isn’t helpful because production methods depend on what is being produced, which in turn depends on the quality of the particular piece of land. It’s perfectly possible to raise a cow, a few sheep or goats, or hens on an acre of poor land without mechanisation or draft animal power, but very difficult to grow vegetables or fruit by hand on an acre of good land, unless it’s in a walled garden or covered by greenhouses or polytunnels. The term ‘market garden’, which attempted to capture 1-10 acres of land good enough for the production of vegetables and fruit, was never well-defined and has fallen out of use. With the escalation of land commodification, if you google ‘smallholdings’ you are offered for sale at extortionate prices every manner of land which can just about get away with not being called a garden along with a house. In the Highlands and Islands we also have crofts, which, despite their importance to remote communities and in relation to the radical legislation governing their land tenure, I’ll leave to one side because they aren’t able to contribute significantly to food production for urban populations by virtue of their location.
Farms, so defined, will play a highly significant part in a radical GND. Scotland is particularly well provided with land and climate suitable for growing vegetables, fruit and cereals in the east and for raising cattle and sheep in the west. Much of this land is close enough to the centres of population to supply locally, and the quantity of food production land is adequate for the size of Scotland’s population. There are not many countries in the world which are in this fortunate position. In this context agricultural skills and knowledge have remained strong despite industrialisation. Exceptional skills in low-cost field-scale vegetable production have developed in the face of low profitability, absence of subsidies (in contrast to other agricultural products) and increasingly fickle weather as a result of global warming.
Yet a staggering 80% of food is imported (that’s a UK-wide figure – I’m not aware of a separate figure for Scotland but there’s no reason to think it would be much different). The chief reason for this mismatch is of course the global commodification of food. What determines the food we eat isn’t where it comes from, how healthy it is, or the impacts of its production and distribution on carbon emissions and biodiversity, but how profitable it is to the big food corporations.
But the other big reason we don’t eat more food produced in Scotland is the price of land. If people had affordable access to land, we could have more allotments, more community gardens sited on good growing land, not the left-over, infertile land which nobody wants, and bigger and better school gardens.
And if affordable land was available we could have more farms producing for the local market, with lots of new job opportunities – a range of jobs all of which would be satisfying because they have a close connection to a product essential to society, and which would include jobs to suit people with different physical and mental abilities . We could have farms of 1 to 5 acres for people who want to have a go at producing food commercially for the first time, whether young people looking to make farming their career, or people who have lost their jobs or never had one, or retirees, or people ready to expand from a successful allotment or community garden. We could have community-run 10-acre farms acting as local food hubs, providing training, advice, start-off tools, seeds and plants for a local network of allotments, community gardens, school gardens and small farms, as well as producing for the local market. We could have larger farms for secondary schools and colleges, as common in the days before land prices exploded.
In the final part of this article to be published on 13th June Mike looks the kinds of demands we can raise and how we organise . If you’d rather read the full text of the article you can find it here.
The second part of Mike Downham’s four part series in which he looks at the extent to which local food production features in different versions of the Green New Deal. You can read the introduction here.
Green New Deals
One of the demand formulations now gathering widespread support is for a Green New Deal. There are many versions of GNDs, but they have in common huge expenditure by states, decarbonisation, new jobs and, to a greater or lesser extent, urgency. Until recently GND movements tended to focus tightly on renewable energy. Proposals then began to embrace additional approaches to decarbonising energy, particularly through improved heat efficiency of buildings and public transport initiatives.
But now something new has come into sight – the idea that a GND should not be focussed exclusively on energy but should cover every sector of society. The International Panel on Climate Change, in its October 2018 Report responding to the Paris Agreement’s readiness to settle for a 2.0⁰C rise in global temperature, said that “rapid, far-reaching , and unprecedented change in all aspects of society” were necessary to limit warming to a 1.5⁰C rise. But their definition of ‘all aspects of society’ included only “land, energy, industry, buildings, transport, cities” – a limited definition of society inevitable given the political influence the IPCC is subject to.
A few months later, in February 2019, Senator Markey and Representative Ocasio-Cortez proposed a more radical GND for the US, which includes job security for all, along with “providing high-quality health care; affordable, safe, and adequate housing; economic security; and access to clean water, clean air, healthy and affordable food, and nature”. But the way this was presented exposed them to dismissive right-wing attacks that these non-energy proposals were just ‘socialist add-ons’.
Later last year, in November, A Planet to Win – Why We Need a Green New Deal by Aronoff, Battistoni, Cohen and Riofrancos was published in response to the Markey / Ocasio-Cortez initiative. I was among those who had an opportunity to meet with three of the authors at a ScotE3 zoom meeting on 15th May (see report on this website). They have developed the idea of a trans-sector GND extensively. Just as the root causes of global warming go beyond energy policy to the whole capitalist system steered by the market, they argue for a GND which addresses energy, jobs, housing, transport, recreation, nature conservation, education, and health and social care services. They explain that these aren’t just add-ons, but practically essential to reduce emissions, in three ways.
By shifting more people from carbon-emitting jobs into carbon neutral jobs, which include education, health and social care services, overall emissions will be reduced.
Secondly, as a GND can only be effective with intervention and massive investment by the state, market control over what is produced will necessarily be replaced by regulation. Without the distortion of profit, the ‘good life’ will be more closely aligned with the rationales of low resource use, low carbon emissions and well-being, rather than with status based on consumption of what the market tells us to buy. As the authors of Planet to Win give as an example, people will prefer to spend their money on dancing classes than on another ipad. This shift will leave large numbers of workers without jobs – those who are currently employed by companies selling products which emit carbon, either in their manufacture or their use. In the context of a cross-sectoral GND these workers can readily be offered carbon-saving or carbon neutral jobs, accompanied by whatever training they need.
Thirdly, a just transition from fossil fuels can only be achieved through public ownership under local democratic control. Local control cannot be truly democratic and effective without removing inequality and poverty. Job guarantees for all workers are a pre-requisite for reduction of poverty and inequality, so we will need a flexible and responsive employment sector. Any job whose purpose is to improve the quality of life, and which does not emit carbon, will be understood as a climate job.
A Planet to Win came out just one month before the start of the Covid-19 pandemic. The book’s recommendations are extraordinarily timely. They might have looked far-fetched at the point of publication, but now here they are – proposals which we can immediately move forward with and develop. That they are available at this point is a bonus for the climate movement, which has no time to lose.
The pandemic has not only ripped off the protective blanket from the capitalist system, revealing the bankruptcy of its ideology for all to see. It has also presented us with new opportunities for organising. But before I move on to discuss those opportunities, what is it that at this moment is so important about local food production?
Local food production as part of a Green New Deal
Few would disagree with the importance of local food production, the benefits of which I summarised at the start of this piece. In contrast, few of the GNDs which have been tabled have dealt with it in any detail. But, if for no other reason, the fact that food production and distribution are estimated to account for at least 30% of global carbon emissions, food has to be given a prominent position in the articulation of any GND. Furthermore, as agreement grows that GNDs should be trans-sectoral, the argument for putting food at the heart of a GND becomes stronger, given the big but less easy to measure impacts of food on the physical and mental health, security and biodiversity of communities.
The authors of A Planet to Win acknowledge that food is an important omission from their book, implying that it’s too big a subject to cover in a short book. This perhaps says something about the extent to which American people have become habituated to the commodification of their food.
The IPCC did not include food in its list of societal factors which we need to address (though it did list land, without saying anything more about it).
The US Green New Deal recommends access for all to “healthy and affordable food” but is silent on how that might be achieved.
You could be forgiven for thinking that the EU GND, trotted out again last week by the European Commission in the context of a Just Recovery from the pandemic, does better by giving a whole section to food in its proposals, headed From Farm to Fork. Butthat section reads, along with its heading, as if written 20 years ago, with nothing more radical than improved labelling.
The Labour Party’s Green New Deal, agreed at its conference in September last year, is broad and radical and has urgency. But the word ‘food’ appears only once in the large document, at the bottom of the list of Universal Basic Services the Party intends to introduce, without any detail about what that ‘service’ would consist of.
All GNDs need to some extent to be country or region specific, while learning from each other about how best to articulate their demands. In Scotland the Green Party’s GND proposals, announced in April 2019, are limited to investing in low carbon industries, restoring our natural environment, giving everyone a warm home, and providing access to cheap, reliable and green transport. Food is not mentioned.
In contrast the Commonweal GND proposals for Scotland, put out in November last year (the same month as the publication of a Planet to Win) include a wordy 17-page paper on food. This, along with all the Commonweal GND proposals, is about long-term strategy. The proposals do not articulate the urgent demands which we need to make at this moment if we are to limit global warming effectively. They also do not address the imbalance of power which confronts us. Notably, the paper on food says “It’s easy for food to become a class battleground, and we need better ways to talk about it”. But we don’t – a class battleground is precisely where we need to muster if we are to change food policy in Scotland, because the current confused policy is a reflexion of the class struggle, as is global warming. Once we’ve won that battle the Commonweal proposals will come into their own as contributions to the public debate about our collective strategy. To give them the respect they deserve, the Commonweal proposals were put together before the coronavirus pandemic, which has changed everything.
The climate movement in Scotland needs to make urgent demands, addressing them not only to the Scottish Government but also to workers, including the many who have lost their jobs, or will soon loose them as a result of the coronavirus epidemic and the simultaneous collapse of the North Sea oil and gas industry. Rapid change will only be achieved through the combined agency of the state and of workers. But we have to be clear first about what changes we are going to demand as part of a radical GND. As there’s been little discussion so far about demands in relation to food, here are some suggestions for starting that discussion. The suggestions are all about the production of food locally. Production and local democracy are fundamental to radical change.
In Part 3 to be published on 12th June Mike looks in more detail at different forms of local food production. If you’d rather read the full text of the article you can find it here.
Over the next four days we publish a series of articles by Mike Downham on local food production in the context of a just transition to a sustainable zero carbon economy
The local food story so far
Growing veg wasn’t in my family, and from what I can remember I never had any contact with anyone who grew veg when I was growing up in London. But from some instinct – perhaps because it’s not so long for most of us since there were farmers in our families – as soon as I had a garden, I wanted to try growing something I could eat. As I liked to eat purple sprouting broccoli and strawberries, I chose to concentrate on those – it was only a small patch in front of a terraced house in central Newcastle. Thinking I’d better do something about fertility, and with no farms nearby to beg or buy muck from, I collected some buckets of waste from the local slaughterhouse. This raised some eyebrows in the terrace, but my reputation was restored when the neighbours saw the size of the broccoli plants and the strawberries.
Having been overpaid by the NHS for 20 years I was privileged to be able to move on from that front garden to an allotment, then a subsistence smallholding, then a commercial farm with a Community Supported Agriculture scheme.
It’s not surprising that people, on their own or getting together with others, have been producing food in their urban neighbourhoods for a long time – it makes so much sense at so many levels. Theoretically the benefits embrace physical health, mental health, biodiversity, food security, food sovereignty, reduction of carbon emissions and political organisation. On top of theory, both the work of producing food and the eating of it are a lot of fun, especially if done collectively. Wherever working class people can get hold of land, in backyards, allotments, unused corner sites, reclaimed industrial sites, school grounds, or, if they can’t find land, in window-boxes and pots on doorsteps, they will grow vegetables and fruit, run hens for eggs, and when they have a bit more elbow room even raise a goat or a cow or two for milk, or animals for meat.
Historical surges in this activity, successfully driven by states because they were so popular, include the UK County Council smallholdings made available for servicemen returning from the first World War; the UK Dig for Victory campaign in the second World War; and urban food production in the Cuban Revolution. These surges did not last for long once war or the threat of war had subsided. In 2006 there was a resurgence of local food production driven by the Transition Towns movement across 43 Countries, mostly in the Global North. But this initiative soon petered out because it did not seriously challenge the powerlessness of communities, particularly in relation to land tenure, even when producers and consumers came together in cooperatives.
Across the Global South, and in the less industrialised parts of the Global North, small farmers producing for local markets are under increasing pressure from one set of capitalists who want to buy their land to farm it intensively or sell it on, and another set who want to sell them chemicals, seeds and machinery as must-haves for ‘modernisation’. Despite this, 70% of the world’s food supply still comes from small farms, and there’s a strong international movement of small farmers fighting to hang onto their land and achieve food sovereignty – the right to choose what food they produce, and how they produce it, in local partnership with the people who eat it. Via Campesina represents 200 million producers across 81 countries.
The new opportunity
The conjuncture of the coronavirus pandemic with the rising global movement for climate jobs as the basis of an effective strategy to limit global warming, and with the discreditation of capitalism by its evident inability to deal effectively with these two emergencies, has the potential to change the balance of power between labour and capital. Demands which were unrealistic a few months ago have become realistically achievable. As consciousness of new possibilities grows, organisations have started to formulate demands, or to push more urgently through coalitions for demands they had already formulated.
In Part 2 to be published on 11th June Mike looks at the extent to which food production is integrated into proposals for a Green New Deal. If you’d rather read the full text of the article you can find it here.
The economies of Norway and Scotland have both been shaped by 50 years of exploitation of North Sea oil and gas. Both countries have governments that talk about tackling the climate crisis while remaining wedded to the further extraction of oil and gas from the North Sea basin. There is however, a sharp divide between the two countries. After 50 years Norway has the biggest Sovereign wealth fund in the world. Scotland in contrast has no such fund and UK governments since the 70’s have pursued taxation policies that have resulted in massive net subsidies to the oil industry. Right now job losses are taking place in the Scottish sector as companies respond to the overproduction of oil and the drop in price – in the worst-case scenario this could mean (including the multiplier effect) up to a quarter of a million jobs lost in Scotland out of a total workforce of 2.6m.
On the 24th May we were fortunate to hear from Andreas Ytterstad who is part of the Norwegian Climate Jobs Campaign – Bridge to the Future. You can watch a video of Andreas’ introduction below. This was followed by a very lively discussion in the course of which participants shared questions, ideas and links to resources. It’s hard to do justice to such a rich discussion but in the rest of this post we have sketched a summary of the issues raised and included links to further reading and useful resources.
Summary of the discussion
Andreas and others argued that state intervention and public control is essential for just transition. The door we’ve been pushing against is now slightly open – for example the growing scepticism in the Finance Department of even the right-wing Norwegian Government about further investment in oil extraction. All governments are now under huge financial pressure from increased expenditure and reduced receipts in the Covid-19 pandemic. This is an entirely new situation – we can push for things we couldn’t realistically push for before. Oil companies have no interest in funding transition, especially as they are led by men coming to the end of their working lives, not up for taking risks.
There was a lot of discussion about Climate Jobs, what they are and their relative importance in the overall economy. Speakers noted the importance of studies by the Million Climate Jobs Campaign and the Green European Foundation in establishing a rigorous case for climate jobs. Andreas noted that even if the current target number is too small it could act as the battering ram to break through to State acceptance of Climate Jobs and Just Transition. He argued the need to win acceptance of the idea but that by itself it was insufficient. The campaign also requires the agency of workers as active participants to ensure that ideas become implemented. Offshore workers’ skills will be important in new housing, energy efficiency retrofit of buildings and public transport. We are going to need huge numbers of Climate Jobs across all sectors, not just the energy sector. An aerospace worker added that there is also huge need for Climate Jobs arising from redundancies in the Aerospace industry.
Andreas noted that regional variation is important in planning and achieving Just transition. It will be most difficult in communities, which have grown and are now entirely dependent on oil. Aberdeen is similar to Norwegian examples, but less remote and therefore more easily incorporated into a national plan. In the meantime we should support even defensive actions by these communities. One speaker noted that in England, Sheffield and County Durham for example, are both developing their own Climate Jobs / Just Transition plans. In both Norway and Scotland (and England) there’s potential for local and regional state authorities to join the Climate Jobs movement. There were questions and contributions on the role of local authorities from contributors in Glasgow, Edinburgh and Aberdeen.
Other questions raised in discussion included:
How to fund the transition? Without a national investment bank how can manufacturing of renewables and other socially useful products for climate jobs be financed?
What are these green jobs?
Who will create them?
Who will fund these new jobs/businesses?
What is the response from Norwegian oil workers to transition jobs?
Will the jobs be from the private sector, or subsidised by national/regional governments, or state/regional publicly owned and financed? Responses to this included ‘That’s fundamental – I think the devil is not just in the detail of when or how much but also who will own it! In Aberdeen the oil and local political establishment have ignored and then when they had to, slowly started to talk about transition but mainly to manage it and make sure they were still in control of transition! What about pushing for transition without them in control? Where all could the money be taken from.’
James Masson is a university student who is also involved with environmental activism. Coming from the North East of Scotland Just Transition is of particular interest to him. We are really pleased that he’s given us permission to republish this article on Just Transition, which was written as a journalism project.
In recent years, climate change has become a key issue and we are only starting to realise the full impact that it could have on our lives. The Intergovernmental Panel on Climate Change (IPCC) fifth report stated in 2013 that they are 95% confident that climate change is being caused by humans burning greenhouse gases. More recently the UN Chief called climate change an existential threat to humanity. In light of the scientific consensus that burning fossil fuels is bad for the planet and therefore all life on Earth it seems obvious to suggest we stop burning fossil fuels, and of course we should. However, we cannot forget about all the jobs and money tied up in the fossil fuel industry.
The North East of Scotland is a region that depends upon the oil and gas sector for much of its wealth. Scottish government stats show that in 2019 the oil and gas sector accounts for £16.2 billion or 9% or Scotland’s economy. The high concentration of fossil fuel jobs within the North East has meant that the employment rate in Aberdeenshire, in 2018, was 82.3% compared to the UK average of 74.8%.
The North East relies heavily on the existence of the oil and gas sector for its prosperity and therefore we must replace the oil and gas industry with an equally strong industry that will mean the local area isn’t hurt economically. This is a concept that is referred to as a just transition. The aim of a just transition is to ensure that communities reliant on fossil fuel industries are not economically disadvantaged when moving away from fossil fuels and are provided with opportunities to grow economically in other sectors, namely the renewable industry.
If we want to avoid the worst consequences of climate change a just transition needs to happen very soon. Scotland just like the rest of the world is warming at an alarming rate.
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.