Mark Williamson: Europeans pose tough questions for Scottish Government amid energy crisis

With drilling activity in the area at record lows, Ms Truss’s team confirmed plans to award more than 100 licences in a well-trailed move. It forms a key part of the new cabinet’s response to the energy crisis sparked by Russia’s assault on Ukraine, which has left consumers facing crippling increases in their bills.

Increased domestic production may not be sufficient to impact on prices, which are set globally. However, it could help reduce the UK’s reliance on imports amid a scramble for supplies.

The Scottish Greens, on whom the SNP Government relies in its independence drive, were scathing when news broke of Ms Truss’s win in the Tory leadership contest.

Co-leader Lorna Slater declared: “Her proposals for a major expansion of North Sea oil drilling would leave us even more dependent on fossil fuels while doing real and lasting damage to our environment … when we should be investing in the renewable jobs of the future.

Friends of the Earth Scotland ramped up pressure on First Minister Nicola Sturgeon to be explicit in opposition to new oil and gas developments as the Scottish Government tries to finalise its own energy strategy. In March publication of the strategy was delayed until the Autumn.

The campaigning group noted that Ms Sturgeon had spoken out against Shell’s proposed Cambo development off Shetland last year, after sitting on the fence for months. It criticised Ms Sturgeon for failing to speak out against Shell’s recently approved Jackdaw field or the announcement by Norwegian oil major Equinor that it plans to develop the giant Rosebank field off Shetland.

After the SNP fought the 2014 campaign on the promise that North Sea oil and gas would fuel a prosperous future for Scotland, Ms Sturgeon appears to be treading a fine line in a bid to placate sections of the SNP who want the industry to be supported.

Former Holyrood energy minister Fergus Ewing told Border TV in March that Scotland needed all the oil and gas production it could get.

In the Programme of Government it released last week the Scottish Government said the forthcoming Energy Strategy would set out ambitious plans for Scotland to become a global green energy powerhouse, and include detailed analysis of the future pathway for oil and gas in the country, without elaborating.

In March Ms Sturgeon insisted North Sea production could not be increased fast enough to impact on prices and the best way to respond to the Ukraine crisis was to “accelerate the transition away from fossil fuels”.

However, with Russia still intent on pounding Ukraine into submission, there are obvious questions about whether renewables can allow the country to cut imports anywhere near fast enough.

Big renewable generation facilities take years to develop.

Industry body OEUK (Offshore Energies UK) noted last week that it takes around 13 years to progress developments from the concept and application stage through to operations.

Noting that gas is used to heat 85% of UK homes, it said that without increased investment in its own resources the UK will become more reliant on imports sooner, as production will fall faster than demand.

This would increase supply competition across Europe and keep prices high.

Anyone who supports oil and gas developments runs the risk of being deemed a mouthpiece for what is a hugely profitable industry but Ms Truss could help address such concerns by dropping her opposition to an increased windfall tax on the sector.

There may also be arguments in favour of boosting domestic production on climate grounds.

On February 24 the Climate Change Committee told then business minister Kwasi Kwarteng: “UK extraction has a relatively low carbon footprint … 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 same day Russia invaded Ukraine.

Champions note that gas could act as an important transition fuel to reduce reliance on coal while renewable capacity is developed.

Oil dependent industries such as transport have not become any easier to decarbonise since the Ukraine war started.

At the same time some of the arguments of opponents of oil and gas developments appear weak.

Exploration licences are not the same thing as development consents.

They are expected to be issued subject to the climate compatibility test the UK Government is developing.

Claims it could be years before finds are brought on-stream ignore the potential to complete developments close to existing infrastructure relatively quickly.

It is notable that Ms Truss also wants to increase gas imports from Norway, which is in a hugely privileged position as a net exporter.

Norway is one of the states that former first minister Alex Salmond claimed formed an arc of prosperity which an independent Scotland could join, along with Iceland and Ireland.

It has reaped huge rewards for encouraging the investment required to sustain high gas production levels, partly by providing generous exploration tax breaks.

Equinor expects to use the investment allowance introduced by the UK Government in May to help make Rosebank a success, with first oil possible in 2026.

The firm is majority-owned by the Norwegian Government.

Last month Norway unveiled plans to cut electricity exports after dry weather hit hydropower production.

Norway is not a member of the EU. However, representatives of EU member states see increases in gas production as an important response to the threats posed by Putin and climate change.

In July the European Parliament approved rules under which investments in gas and nuclear projects could be marketed as ‘green’ on sustainability grounds.

The EU’s climate policy supremo Frans Timmermans said then a short-term return to fossil fuels could help reduce the threat of civil unrest amid the energy price surge this winter.

Putin has tightened the screws on gas supplies even harder since then.