'End North Sea oil production in 25 years' call as part of £170bn green plan

Since oil was first discovered in 1966, and full production started ten years later, the North Sea was found to have the largest oil resources in the European Union.

But all that has to change over the next 25 years if an influential think tank's £170 billion green new deal plan is sanctioned.

The Common Weal says oil and gas extraction should be phased out as part of a revolutionary £170 billion green new deal plan to be replaced by a raft of low carbon initiatives aimed at tackling climate change.

READ MORE: North Sea oil and gas industry in best shape for years finds key report

In a newly published report, the Common Weal's most costly suggestion in its Common Home Plan is a £50 billion scheme to build a low carbon district heating scheme, connected to every house on the gas grid where technically possible, and power it with large-scale renewable heat generation.

District heating is the supply of heating and hot water to multiple buildings from a centralised generation source, through insulated underground pipes.

This system is widely developed in the Nordic countries, but less so in the UK, and reduces the carbon emissions produced in supplying heat to homes.

In what the influential think tank says is the world's first comprehensive and costed proposal for how to implement a green new deal, it suggests taking all energy into public ownership, and move to the production of hydrogen, seen as a versatile fuel capable of powering everything from household appliances to transport to industrial processes. Hydrogen fuel has zero emissions when burned with oxygen. It can be used in fuel cells or internal combustion engines to power electric vehicles or electric devices.

The Common Weal suggests spending £45 billion to replace all non-renewable electricity generation with the help of a national energy company, upgrade the grid and build low carbon electrolysis plants to produce 800,000 tonnes of hydrogen. When hydrogen is produced using renewable electricity, it is entirely emissions free.

It also suggests creating a national housing company and spend £40bn to get every home in Scotland up to a thermal efficiency of 90 per cent, saving 40 per cent of heating bills.

It is also suggesting the biggest overhaul of housing since the Second World War, with a plan to have greener Scottish homes by installing loft installation, double glazing and renewable technologies.

That would involve setting up a national housing company and spend £40 billion to make every home in Scotland more thermally efficient, saving 40% off heating bills.

But the Herald can reveal it is all at the expense of an industry that the Scottish nationalists have fought over for decades.

It's value to the nation was recognised by the Scottish National Party when "it's Scotland's oil" was a widely publicised political slogan during the 1970s in making their economic case for Scottish independence.

READ MORE: Biggest find in more than a decade shows still lots to go for in North Sea

The SNP campaigned widely in both the February 1974 UK General Election and subsequent October 1974 UK General Election using this slogan But the report by the Common Weal said:" By the end of the 25 years of the Common Home Plan, Scotland must have stopped extracting oil and gas from its North Sea.

"To enable this transition the National Energy Company should do everything possible to build up domestic supply chains to create industries and jobs to replace those already being lost in the oil and gas sectors. Many of the supply chains for the oil industry can be redirected to provide the materials required for the roll-out of district heating."

The Common Weal says that most of the work requires "collective public action" and will only need to be done once so should be financed through public borrowing.

It says the infrastructure built will "future proof" Scotland for many generations to come so the report proposes that the borrowing be paid off over 50 years. The annual cost of repaying this will be around £5 billion but the think tank estimates it will bring in £4 billion in tax revenue.

"Crucially, this proposal will require no additional private spending by individuals to achieve a carbon-neutral Scotland so there are no hidden or extra costs which will be borne by households," says the Common Weal.

The think tank report says that while transport technologies are still developing, Scotland should immediately spend £3 billion on a national recharging and refuelling stations and be ready to spend at least £10 billion on the transition to zero-carbon transport over the 25 years.

It suggests a radical reform of land ownership, by reforesting 50 per cent of Scotland, train 20,000 expert land managers and implement a rural industrial strategy to build a large light engineering industrial sector located where energy and wood crops are available.

The Common Weal believes it will require independence to implement the plan, but that measures would be necessary whatever Scotland's constitutional outcome.

Commenting on the launch of the plan in Glasgow, Common Weal director Robin McAlpine said: “Producing this has been an enormous amount of work, but the threats we face are so great that an enormous amount of work is needed.

"We all need to be clear that this is in large part a major engineering project and until it or something very similar to it is complete, Scotland will continue to contribute to environmental decline.

"And this will take time and so the longer before we start, the longer until we stop doing harm. The urgency is clear and the time for targets passed a long time ago. Scotland needs a plan.”

Oil and Gas chief executive Deirdre Michie insisted earlier this week that the industry can help tackle climate change but admitted it needs to clean up its act in the North Sea.

The industry body has set out a clear plan for how oil and gas firms could help in the effort to reduce carbon emissions to zero, net of amounts absorbed, in its Roadmap 2035 report.

Oil and Gas UK, upstream policy director Mike Tholen said of the Common Weal report: “The independent Committee on Climate Change report forecasts oil and gas demand will continue for decades to come, to around a third of what it is today by 2050.

READ MORE: Greenpeace activists 'reboard' after nine BP North Sea oil rig protest arrests

"With world-class energy expertise, skills and capabilities, our Roadmap 2035 sets out how Scotland can pioneer an inclusive and fair transition which meets net zero, secures a diverse energy mix and protects affordability. We hope Common Weal and others will reach out to this important industry at a critical time in the transition.”

The Oil and Gas strategy will involve helping maximise the potential of new energy sources and carbon capture technology while reducing the emissions associated with the production of the oil and gas that will be needed to support the economy.

Energy UK, the trade association for the British energy industry with a membership of over 100 suppliers, including Shell, British Gas and EDF Energy declined to comment on the findings.