Scottish government lays out ‘fastest possible’ move away from oil and gas

The Scottish government has proposed making the “fastest possible” transition away from oil and gas production, laying out an energy strategy that prioritises an accelerated shift to increased wind and hydrogen development.

The ruling Scottish National party said on Tuesday that its draft energy strategy had a “presumption against new exploration for oil and gas” and called for stricter environmental tests to be applied to developing already licensed fields.

The proposal marks the SNP’s cleanest break yet with an oil and gas sector whose revenues it once believed could help make the financial case for independence. The party has since switched to emphasising Scotland’s potential as a leader in green energy.

Michael Matheson, energy and climate secretary, said that while workers in the sector needed a “just transition”, projections for declining output in the UK North Sea meant the focus on renewables had to grow.

“The oil and gas industry has played an important role in our economy and has been part of our national identity for decades,” said Matheson. “[But] the previous policy position of maximum economic recovery is no longer appropriate.”

First minister Nicola Sturgeon said before publication of the paper, which will be open to consultation for four months, that it was necessary to “accelerate the clean energy transition and reduce Scotland’s dependence on oil and gas”.

But the push is likely to face opposition from an industry that argues fossil fuels will remain essential to the UK’s energy supplies.

Offshore Energies UK, the industry body, said it welcomed the “commitment to develop a Scottish hydrogen economy” but was “concerned at the statement’s suggestion of accelerating the decline in oil and gas production”.

“We need to ensure that the final strategy acknowledges the continuing role of oil and gas in Scotland’s energy security and economy,” said OEUK.

Sir Ian Wood, chair of ETZ, a company backed by the Scottish and UK government to drive the energy transition in the north-east of Scotland, said it made no sense to reduce oil and gas production prematurely, a move which would then need to be compensated for by an increase in imports.

The technology and job creation associated with renewable energy would “not be available at scale until 2030 at the very earliest”, he said.

While licensing is reserved for London, the Scottish government’s opposition to new exploration could deter companies from investing in the sector and speed the decline of output, opposition MSPs warned.

Matheson argued that, regardless of the climate “imperative”, independent research showed oil and gas output from Scottish waters would decline markedly in the coming years because of the maturity of the North Sea basin and the low likelihood of significant new discoveries.

By 2035, output could fall to just one-third of 2019 levels and, by 2050, stand at only 3 per cent of the peak level in 1999, the government said.

The SNP hopes Scotland will become a major exporter of renewable energy as well as meeting domestic demand. It is due to publish its export strategy later this year.

The draft paper reiterated the government’s support for expanding onshore wind generation to 20GW of capacity by 2030 from 8.8GW today, while targeting 8-11GW of offshore wind in Scottish waters.

The government also outlined its target of 5GW of renewable and low-carbon hydrogen production by 2030, rising to 25GW by 2045 — the date of Scotland’s plan to reach net zero.

Matheson said “low-carbon” jobs would rise to 77,000 by 2050 from 19,000 at present, representing “a net gain across the energy sector overall”. OEUK said the offshore industry supported 90,000 jobs in Scotland.

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