AMID fresh indications that the green jobs boom the Scottish Government has said is in prospect remains distant, a North Sea visionary has underlined the value of domestic gas production.
IOG has started production from two North Sea fields as the awful events in Ukraine highlight the scale of the risks involved in relying on imports of gas at a time when demand for the fuel in Scotland is likely to increase.
While greens appear to believe that it is self-evident that Scotland will be able to meet all its needs from renewable energy, the end of generation at the Hunterston nuclear plant in Ayrshire in January has left a huge gap that will likely have to be filled by fossil fuels.
Hunterston closed shortly after the results of the landmark ScotWind offshore leasing round left champions of the renewables industry celebrating the prospect of a huge increase in both wind energy generation and supply chain activity.
Crown Estate Scotland hailed the outcome of the round, which generated interest among energy giants, industrialists and investors around the world.
However, amid the celebrations of greens, important words of caution that were included in the announcement of the results by the organisation received less attention.
“This is just the first stage of the long process these projects will have to go through before we see turbines going into the water, as the projects evolve through consenting, financing, and planning stages,” it said.
An update last week from two successful ScotWind bidders may have been intended to highlight the potential supply chain benefits on offer. However, it did not suggest these will be available soon enough to compensate for the fact the huge investment already made in windfarms in Scotland has failed to generate anything like the expected boost to the economy and jobs.
ScottishPower and Shell announced that they would make £75 million funding available to support the development of the windfarm supply chain in Scotland in connection with three huge windfarms they plan to develop on ScotWind acreage.
Shell said the funds will directly support the Scottish supply chain and could be used to help businesses that are keen to make the transition to the renewables sector.
But ScottishPower indicated that details of how the funds will work have yet to be worked out.
A spokesperson said: “It’s still very early days and we’re going to work with members of the supply chain, industry, partners and government to shape the fund so we maximise its benefits for the supply chain and the economy.”
The spokesperson said the three windfarms are expected to involve total investment of more than £20 billion, with around half to be spent in Scotland.
Firms in North East England will probably be looking forward to bidding for related work. Teesside has drawn on the benefits of free port status to attract investment from businesses such as US giant GE, which is to build a major turbine blade manufacturing plant in the area.
READ MORE: Montrose in line for windfarm support jobs
The Scottish Government declined to support the Westminster administration’s free port initiative in favour of developing the green port model which it unveiled last month.
By contrast IOG has shown that there is potential in the North Sea that can be realised relatively quickly after winning backing for a bold plan to bring undeveloped finds into production from US billionaire Warren Buffett.
The famed Sage of Omaha’s CalEnergy Resources paid £40 million for a 50 per cent stake in IOG’s Southern North Sea development project and agreed to cover up to £125m of the group’s costs.
The former Independent Oil and Gas developed the plan during the slump in the North Sea that followed the plunge in oil prices from 2014 to 2016.
After bringing the Blythe field onstream on Monday, IOG started production from the Elgood find yesterday. The production hub it has developed could be used to develop other finds in the area.
READ MORE: Leading Scottish oil firm underlines appeal of North Sea amid war in Ukraine
A range of firms, including Cairn Energy and Deltic Resources, have highlighted the potential of gas prospects in the North Sea.
The output from these may not be anywhere near enough either to meet all the UK’s needs or to have a big impact on wholesale prices. However it could still provide a boost to the country’s energy security. The development work concerned would provide valuable jobs.
Moreover, new North Sea gas fields could play a part in the drive to reduce emissions. The output from them could be used as a feedstock for hydrogen production plants linked to carbon capture and storage schemes that would utilise depleted reservoirs.
Against that backdrop, it’s worth remembering that a recent intervention by the UK’s Climate Change Committee that some thought sounded the death knell for the North Sea actually highlighted benefits associated with gas production in the area.
In a letter to business minister Kwasi Kwarteng last month the committee said it would support a tighter limit on production, with stringent tests and a presumption against exploration.
However, it conceded: “The CCC has not been able to establish the net impact on global emissions of new UK oil and gas extraction. UK extraction has a relatively low carbon footprint (more clearly for gas than for oil) and the UK will continue to be a net importer of fossil fuels for the foreseeable future, implying there may be emissions advantages to UK production replacing imports.”
The SNP Government appears willing to risk frightening off firms that might want to develop fields in the North Sea as it looks to keep the Scottish Greens onside in its bid to separate Scotland from the rest of the UK.
Last week energy minister Michael Matheson told MSPs the answer to the Ukraine crisis was for Scotland to decarbonise at a faster rate.
READ MORE: ScottishPower feels gas price impact as windfarm output drops
While we await details of how this could be done, Mr Matheson and ministerial colleagues must address the awkward implications of an assessment of their actions which was issued by the Climate Change Committee this week.
This found that while the Scottish Government talked a good game on climate its practical response has been inadequate in key respects.
The chair of the CCC’s Adaptation Committee, Baroness Brown, said: “We commend the Scottish Government on its vision for a climate ready Scotland, but the reality is that action is not happening at the scale or pace required. In most sectors including the natural and built environments, health, infrastructure and business, action has stalled.”
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