North Sea and Just Transition – let’s talk about public ownership

We republish this article with thanks from the excellent People and Nature blog (well worth following) – it has also been reposted by the Ecologist.

The UK paid Royal Dutch Shell $116 million of tax rebates in 2019, while the company reported $92.1 billion revenues in the UK for the year.

Internationally, Shell made pre-tax profits of $25.5 billion in 2019, and paid $7.8 billion income tax and $5.9 billion royalties, in dozens of countries. But the UK, France, South Africa and Indonesia handed money back to Shell.

The figures were published last month by Shell. The UK tax rebate to Shell also shows up in the UK Extractive Industries Transparency Initiative (EITI) report, published last week, along with a smaller £14.7 million tax rebate to BP.

At least the UK’s upstream oil industry as a whole paid some tax in 2019 – £1.43 billion – unlike 2015 and 2016, when the Treasury paid out more 

in rebates than it collected in tax (as shown in this earlier EITI report).

Shell and BP’s rebates are part of the hugely generous system of tax breaks for North Sea producers, linked to the decommissioning of declining oil fields (and analysed last year in the Sea Change report by Platform, Oil Change International and Friends of the Earth).

These are subsidies to fossil fuel production, running into billions of pounds, devised by a Tory government that claims to be taking action on climate change.

And the problem runs deeper. North Sea oil production has since the 1980s been taxed with profit-based, rather than resource-based, methods, which gave the international companies access to the resources in the ground on unprecedentedly favourable terms.

The central role of these tax arrangements in the neoliberal “process of redefinition of the economic frontiers of the state” was analysed in this article by Juan Carlos Boué, published by Scot.E3, the just transition campaign group. The UK tax model was promoted across the world and “destabilised many key petroleum producers, whose governments found themselves starved of fiscal income”, Boué argues.

This is all politically relevant right now, as trade unionists and environmentalists seek ways to unite to ensure a just transition away from oil and gas production on the North Sea. 

There have been some vital steps forward in recent weeks.

In September, a report compiled by Platform, Friends of the Earth Scotland and Greenpeace gave voice to North Sea workers’ views on just transition. It was based on a survey of 1383 workers, all in upstream oil and gas.

The report showed that most people who actually work on the North Sea (91% of respondents) had never even heard the term “just transition” – a reminder of the yawning gap between working people on one hand and political, academic, trade union and “left” circles on the other.

The report – which was greeted by the Rail Maritime and Transport (RMT) union – also showed that North Sea workers definitely embrace the idea of moving out of oil and gas production and into offshore wind, in particular,

Oil and wind. Photos by Berardo62 (oil) and David Dixon / Creative Commons

and other twenty-first century ways of doing things in general. The respondents were overwhelmingly positive about retraining and moving to other industries, and offshore wind was the favourite choice.

On a webinar arranged by Platform last week, three offshore workers gave their views, together with a trade union official (Jake Molloy of the RMT), a Labour politician (Lewis MacDonald, Member of Scottish parliament) and an energy researcher (Anna Markova, Transition Economics).

The workers spoke of the hardship and demoralisation caused when the oil price falls and big companies shed labour, which they have been doing throughout the coronavirus pandemic. The high level of casualisation on the North Sea makes matters worse.

Workers who hope to move to offshore wind jobs are further aggrieved by an unjust, bureaucratic qualifications regime. They are required to pay for re-training courses from their own pockets – at the very moment when they are looking for a job and short of money. Many companies add insult to injury by requiring them to do e.g. basic safety training that covers issues they have learned over decades offshore.

The webinar provided space to reflect on what a worker-led just transition would look like. Jake Molloy of RMT pointed to the huge job, now starting, of decommissioning old oil rigs. “The steel should be recycled and used for wind turbines”, he suggested. (He said similar things when addressing the Scottish TUC recently. See this recording, at 4 hours 52 minutes.)

Such suggestions will take on meaning if they are linked to calls for public ownership, and for an end to the subsidies paid to oil and gas producers, in my view.

Only public corporations, acting in the interests of society as a whole and not for profit, would be able to act on proposals such as Molloy’s. Running down oil and gas production, and decarbonising the economy, needs integrated approaches by entities that take full account of the social and climate consequences of their actions.

Only moves towards public ownership can challenge the energy companies who see the North Sea as one part of their global operations, and use their lobbying power to mould the tax regime to their interests.

At last week’s webinar, repeated mention was made of work that could be done in the UK, e.g. building and repairing rigs and wind turbines, being done elsewhere.

There is a danger of the labour movement approaching this as a competition between workers in different places, going back along the road trod by Gordon Brown, with his notorious call for “British jobs for British workers”.

This can only feed the divisive nationalism and protectionism to which the Johnson government appeals.

A campaign for public ownership, by contrast, highlights the fact that the state can be used to challenge the power of multinational capital and constrain its exploitation of working people and of natural resources.

It highlights the fact that state action could run down oil and gas production on the North Sea, expand electricity generation from renewable sources, and develop other industries in the areas where communities now rely on employment offshore.

A campaign for public ownership to underpin a just transition could start to challenge the multinational oil companies and their accomplices in government, and unite offshore workers with school students and all those demanding rapid action to stop dangerous climate change. GL, 15 December 2020.

■ As the discussion on just transition got started in Scotland, Shell’s truth-bending claims that it is doing something about climate change have been taking a beating. Several senior executives in its renewables energy business have quit, amid what the Financial Times reported is “frustration” at the minute quantity of investment in non-carbon technologies. Two big court cases against Shell by Friends of the Earth Netherlands are close to their conclusion. The first is to compel the company to clean up the damage it has done over decades to the Niger Delta, in Nigeria, where it produces oil. The second case is aimed at forcing Shell to reduce its carbon emissions.

Further Reading

What the BiFab disaster tells us about class rule – Scot.E3

Bifab- time for action – Scot.E3

Crisis, North Sea oil and Covid 19 – Platform

North Sea oil and gas: the elephant in the room – People & Nature, October 2019

North Sea workers ready to switch to renewables, survey shows

This post by Gabriel Levy was first published on Tuesday 29th September on the People and Nature website. We are pleased to repost it here with permission.

Most UK oil workers would consider switching to another industry – and, if given the option to retrain, more than half would choose to work on renewable energy, a survey published today shows.

The survey blasts a hole in the argument by trade union leaders that every last drop of oil must be produced, supposedly to preserve jobs. Actually, workers are ready to move away from fossil fuel production – as long as they can work and their families don’t suffer.

The 1383 offshore workers who responded to the survey crave job security, above all. Nearly half of them had been laid off or furloughed since oil prices crashed in March.

Many complained about precarious employment and the contract labour now rife on the North Sea.

The survey, Offshore: oil and gas workers’ views on industry conditions and the energy transition, was put together by Platform LondonFriends of the Earth Scotland and Greenpeace.

The survey’s authors seem to be the first people who have actually asked workers what they think.

The Scottish government has a comfortably-funded Just Transition Commission, including trade union chiefs, that recently ran a consultation on its interim report.

But it was campaign groups, working with activists on the ground, who bothered to talk to offshore workers.  The survey, distributed via social media and targeted advertising, garnered 1546 responses. The results excluded replies by 163 people who work in midstream or downstream industries, and are focused on the 1383 respondents who work upstream. That’s a representative sample: about 4.5% of the workforce.

Let’s go! Wind turbines, with an electricity sub-station, in the North Sea (German sector). Photo: SteKrueBe / Creative Commons

One of the survey’s most sobering results is that, when asked if they had heard of a “just transition”, a staggering 91% of survey respondents said no. (The term “just transition”, nowadays used and misused by politicians, was coined by trade union militants in the 1990s to define the need to fight for social justice during the switch away from fossil fuel burning and other ecologically ruinous practices.)

The Offshore report’s authors comment:

Clearly, campaigners and NGOs lobbying for just transition, and policymakers tasked with implementing one, have failed to reach oil and gas communities – the people who ought to be most central to transition plans.

Despite not sharing vocabulary with the chattering classes, North Sea workers are very clear that the future lies away from oil and gas. 

Asked, “would you consider moving to a job outside of the oil and gas industry?”, 81.7% said yes, 7% said no and 10% said they did not know. The survey’s authors commented:

The fact that a huge majority of workers are interested in leaving the industry speaks volumes about the stability and future of oil and gas. There are of course a multitude of reasons why anyone would consider changing jobs, but it is clearly that the offshore workforce is willing to make large lifestyle changes given the opportunity.

In case studies and written responses, the vast majority of offshore workers state that they are fed up with the lack of security, decreasing employment rights and hostile conditions.

Of the 7% who would not consider moving, the three main reasons given were that they were close to retirement age; that the offshore work schedule allowed them to spend time with their families; and concern that their skills would not be transferable.

Asked what was most important to them in considering a move, respondents replied: (1) job security (contract length, pension, etc), 58%; (2) pay, 21%; (3) similar work schedule, 11%; (4) health and safety regulations, 5%.

The survey’s authors reported “a palpable exhaustion with the precarious nature of work offshore”.

North Sea workers are also ready to participate in the transition to renewable energy production, judging by the survey.

Asked, “if you could receive training or education to help you move to a new part of the energy sector, what education or skills training would you be interested in?”, and allowed to choose as many of ten options as they liked, the responses were:

Offshore wind 53%

Renewables 51%

Rig decommissioning 38%

Carbon capture and storage 26%

Non-energy sector 20%

Solar installation 19%

Geothermal technologies 18%

Battery technologies 16%

Transport 15%

Electrical engineering 13%

Other 2%.

A barrier to the transition to renewable energy is the lack of adequately-funded training schemes, the survey showed. Respondents complained that they are expected to pay for courses and qualifications themselves – and the bills are counted in thousands of pounds.

Survey respondents criticised the lack of government support for workers:

The overwhelming majority [of respondents] asked for some form of training, support to leave the industry or investment in renewables. Other prevalent themes included a need to invest in decommissioning, financial support and local supply chains.

The report ends by saying that Platform, Friends of the Earth Scotland and Greenpeace will be running a participatory consultation of oil and gas workers across the UK. “Workshops will enable energy workers to draft policy demands for a transition that works for them, and a renewables industry they want to work in.”

The report urges “energy workers, union branches, local communities, environmental groups or other stakeholders” to get involved.

Today’s report shows that North Sea workers are well aware that the false choice that trade union leaders talk about – fossil-fuel production or unemployment – has nothing to do with reality.

On the contrary, a move out of the oil industry could be, from workers’ point of view, a chance to say goodbye to precarious contracts and the constant fear of sudden lay-offs.

Offshore workers’ readiness to retrain to work on renewable energy, as shown in the survey, strikes a refreshing contrast with trade union officials’ approach. They back the oil companies’ and governments’ plans to keep pumping oil until there is no more money to be made from it.

Edinburgh May Day, 2019. Photo: Friends of the Earth Scotland / Oil, coal and resistance

The oil companies present this climate-wrecking policy in “green” wrapping paper, Vision 2035 – which cynically claims to aim at “net zero” emissions, while continuing to pump a million barrels a day.

But the underlying strategy of “maximising economic recovery”, i.e. wringing out every last drop, is unchanged.

This approach is not only incompatible with combating dangerous global warming, but also avoids focusing on the really urgent job of closing down oil and gas production and planning other futures for workers and communities (as NGOs have argued in the Sea Change report, for example).

In April, when the oil price slump triggered a new wave of lay-offs, the union bosses reiterated their sympathy for “a longer term investment strategy” in oil, rather than accelerating the switch to non-fossil technologies. The Unite, GMB, RMT, Nautilus International, BALPA and Prospect unions all fell in line, rather than treating the Covid-19 crisis as an opportunity to leave behind the fossil-fuel-centred economy.

Surely what is needed now is a real discussion in communities and among workers about how to shape the just transition, to achieve social justice and to contribute to tackling climate change. Hopefully, the participatory consultation proposed in today’s report will be part of this. GL, 29 September 2020.

Comments by North Sea workers (from the report)

On precarious work …

  As I was self employed prior to April, the company put me on a PAYE contract even though the government delayed its implementation of the IR35 rule [rules that apply to off-payroll work contracts]. Consequently I now earn less, have to pay for all my courses out of my wages, and I have no employee safeguards or protection. It seems the oil companies have got away with everything but the workforce gets hammered. […] A union won’t stop this, it needs government intervention to hold these companies to account in the way they are treating the entire workforce.

 I’ve gone to agencies who employ contractors as staff, and have had to go back as an independent contractor and take a 25% pay cut. This is happening on a wide scale. It’s very attractive to companies because they have to take on the risks of employees. I fear in the long term that IR35s will allow for companies to get rid of workers whenever they want. They have zero risk, they can take 150 guys and then get rid of 150 guys six months later.

On retraining …

 At my last job […] our safety guy had worked in oil for 15-20 years. He applied for a job on [a wind farm] and it was going to be offshore. He was told he’d have to do the offshore survival course for wind. If he wanted the job he would have to spend at least £1000 for offshore wind qualifications. But the main theory behind offshore survival is surviving a helicopter crash, and it’s the same helicopter if you are going offshore to a wind turbine or an oil rig. Even a half day conversion course would be better, because as it stands it’s perceived as a money-making scam.

 We need retraining and a job at the end of it. I can’t get any work. I was an agency worker so I get no money or help whilst not working. I have to use the money I have previously earned to live. I can’t claim one single penny from the government, it’s soul destroying. I am 52 years old and I feel my life is finished already.

 Offer courses either free or heavily subsidised, unlike the last downturn in oil and gas where it was an absolute nightmare to get funding for retraining. They made it so difficult and unrealistic that the local governments basically pilfered the funds for themselves. They should offer better rates than what is given from the completely useless and proven to be absolutely abysmal Universal Credit. No-one can survive on that.

On the energy transition …

 Up until now we’ve been quite reliant on oil and gas for transport, heating and generation of electricity, and obviously that’s going to have to change. […] If we want to look at training people towards understanding how we maintain our planet, it’s really important that people understand that there are ideas out there that are fantastic. But of course, not all of them are that sustainable, including biomass. I’m interested in a degree in tidal generation, mostly because we live near Montrose and there’s a three square mile basin that fills with seawater every day. […] It empties and fills twice a day, and I can’t help but think ‘surely we could be taking advantage of that’.

North Sea Oil and Gas – workers voices

A very important report has been published today by Platform that collates the results of an extensive survey of the views of more than a thousand offshore oil and gas workers on their lives, the industry they work in and energy transition. We’ll publish more on the report over the next few days but we strongly recommend downloading the full version.

Front cover of the report

Key survey results include:

81% of offshore workers would consider leaving the industry 

43% had been made redundant or furloughed since March 2020 

91% of respondents had not heard of the term ‘just transition’

Given the option of retraining to work elsewhere in the energy sector, more than half would be interested in renewables and offshore wind.

Over 50% of workers deemed government support at all levels “nowhere near enough”

Current job security satisfaction was rated 1.9 out of 5, with 58% of respondents also identifying job security as their top priority in considering changing industries

Platform’s worker survey

Platform recently released a survey for workers in the oil and gas industry, its supply chain, and relevant bodies that interact with both. Its objective is:

  • To find out how the oil crisis and Covid19 has impacted job security and work conditions
  • To understand what a ‘Just Transition’ means for oil and gas workers. 

If you are a worker in any of the industries that Platform would like to talk to please take a few minutes to complete the survey.