SCOTLAND will be £6 billion a year poorer by 2030 if Nicola Sturgeon's successor presses ahead with her draft energy strategy, the head of the North Sea industry trade body has warned citing forecasts given in the report.
David Whitehouse, the new chief executive of Offshore Energies UK, said the Scottish Government's own documents highlight the damage to the country's economy of an acceleration away from oil and gas production.
They also reveal that under the plan at least 25,000 jobs would be lost to the energy sector by the end of the decade.
Though licensing is reserved to Westminster, ministers in Edinburgh are consulting on whether there should be a presumption against new exploration for oil and gas in a bid to reach their climate change target of net zero by 2045.
Mr Whitehouse said the Scottish Government's proposed strategy noted a swift move away from oil and gas would lead to a dramatic reduction in money being generated by the sector.
David Whitehouse, chief executive of Offshore Energies UK. Photograph by Michal Wachucik/Abermedia
He appealed to the three SNP leadership candidates vying to succeed Ms Sturgeon as First Minister - finance secretary Kate Forbes, health secretary Humza Yousaf and former community safety minister Ash Regan - to reverse the current plan.
"Successful energy policy starts with what we already have. Use the great industrial strength we already have in Scotland as the basis for the transition and recognise the role of ongoing oil and gas production during the transition is critical," he said.
The projected drop in "gross value added" (GVA) was worked out on the basis that if fossil fuel production is rapidly wound down the number of highly paid jobs in extraction and in the supply chain (where the average salary is £88,000 and £51,000 respectively) would fall and would be likely replaced with jobs with salaries closer to the Scottish average of £29,000.
Projections published by the Scottish Government of an analysis of the strategy show a loss of GVA of £6billion a year to 2030 and of £7billion by 2050.
The summary analysis published on Friday stated: "By 2050, total Scottish O&G and low carbon GVA may be reduced to £12 billion compared to £19 billion in 2019. This is primarily due to the value of the jobs in the new low carbon sectors being lower than those in the existing O&G sector."
It added: "The forecast decline in employment and GVA is significant: from 57,000 to 32,000 jobs by 2030, creating a challenge for a Just Transition. Our modelling adopts conservative assumptions regarding the scale of the jobs/GVA in the Scottish supply chain, meaning impact of decline may be more severe."
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The summary report also warned moving rapidly away from domestic oil and gas could lead to increased emissions globally as Scotland becomes more dependent on overseas suppliers emitting more Co2 in their production processes.
It said: "ScotNS is a lower emitting basin than the global average, a sudden reduction in ScotNS production could open up capacity in the global market for higher-emitting basins to produce more.
"A decline in production more rapid than the current ScotNS forecast is more likely to increase Scottish O&G imports unless affordable low carbon replacement technology is available to meet consumers’ high expectations."
Mr Whitehouse told The Herald: "Fundamentally what the Scottish Government's document does show is a loss of value to the economy in the region of about £6 billion to 2030."
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He added: "The draft strategy talks about a presumption against further exploration. There is also the consultation on whether or not the Scottish Government should accelerate the cessation of oil and gas production.
"We think those are unhelpful. They are not needed. And part of the solution to deliver the just transition is to look to reverse those positions. I think part of our role now is to work with the Scottish Government to ensure that isn't the outcome."
Mr Whitehouse said the role of the oil and gas sector was critical in the transition to renewables as the latter required the support of the former's supply chain.
Moving away from oil and gas too fast would weaken the supply chain needed for the green energy sector and that this situation could see competitor countries gain an advantage in renewables over Scotland, he said.
"If we are not careful we will have undermined our own supply chain to the point where those jobs [in renewable energy] won't come," he said.
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"And what you will find is that the jobs in renewables won't be anchored in the UK or Scotland but will be anchored somewhere else.
"One of the reasons why it is right to invest in oil and gas is that is provides the platform for those new jobs in renewables. The concern is not so much that people will leave Scotland and go elsewhere to find jobs, it's that the jobs will not be here.
"If we prematurely end oil and gas investment then we run the risk that we will have an energy transition that won't be supported by skills and equipment that is not anchored in Scotland.
"We are at risk as a nation of importing energy transition plans. So cherish what we have in oil and gas and use that as a platform to build a future. And that is the support we are looking for from the Scottish Government."
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Ms Forbes supports the move to net zero, but has suggested she would curb action to accelerate Scotland’s transition away from oil and gas. She warned the transition must take place “at the right pace”, or risk job losses and damaging the Scottish economy.
Ms Regan is a member of the net zero, energy and transport committee, but has said she would not support "an accelerated net zero path", because it would see job losses and "hollow out" communities.
Mr Yousaf has suggested he would continue the progress on winding down the North Sea industry, pointing to “climate change not going away”.
Some 45 per cent of Scotland and the wider UK's gas supplies comes from the North Sea with just under a half imported from Norway.
Offshore Energies UK say by 2030, without additional investment, the UK will have to import around 80 per cent of its gas and 70 per cent of its oil.
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The UK Government is looking to boost domestic oil and gas output as Europe weans itself off Russian fuel and in January the first North Sea exploration licensing round since 2019 attracted 115 bids up from 104 in the last round, with licences expected to be awarded from next month.
The development has sparked anger from environmental campaigners, but Mr Whitehouse believes continued domestic output reduces reliance on imports and increases energy security.
A Scottish Government spokesman said: "As a responsible government, we have set out a pathway, through our draft Energy Strategy and Just Transition Plan, to ensure a fair and just transition for our energy workforce, and to bring a new generation of skilled workers into the energy industry. Given the North Sea basin is mature and production is already in decline, any other course of action would only serve to put jobs and our economy at risk.
“Our draft Energy Strategy and Just Transition Plan sets out a very clear vision to capitalise on the enormous opportunities that a net zero energy system offers the industry, our economy and our climate.
"As the draft strategy makes clear, economic assessments of our potential future pathway do not include the full GVA potential of exports of Scotland’s renewable or low carbon energy – such as the enormous potential for Scotland to develop a hydrogen export economy in the coming years.”
Scottish Green MSP Mark Ruskell said: "The dependence on oil and gas is having a devastating impact on our environment and our bills. There is no room for complacency or denial.
"It is absolutely vital that we move on from a fossil fuel based energy policy and invest in the clean, green renewable jobs of the future.
"We have seen a major shift from the Scottish Government, which has rightly recognised that if we are to have a sustainable future then we can't keep drilling.
"It is vital that we see a similar change from the UK government, which is in the process of approving 100 new climate wrecking licences for the North Sea.
"The climate crisis is the biggest crisis that we will ever face. It is already happening all around us. We can't afford to wait, not when the consequences of inaction are so serious."
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