How should poor countries which find themselves rich in oil and gas use their wealth in order to build a sustainable future for their people? There is a wide range of options and plenty examples of how to get it wrong.
The energy ministers of Saudi Arabia and Algeria will meet with OPEC’s top official Friday as major oil producers continue to lay the ground for a potential deal to bolster crude prices in Algiers later this month.
They’re among the oldest oil fields in Australia still in production. Now they are proving superfluous to some of the world’s biggest producers that are purging high-cost assets to weather crude’s collapse.
At time of writing, 5% of the UK’s electricity consumption is coming from wind. Another few per cent is powered by other renewables, mainly long-established hydro; 39% from gas, 21 from nuclear and 22 from coal.
When the Sea Gem rig struck gas off Durham in September 1965 and the North Sea’s potential role as an energy source impinged upon public consciousness, Harold Wilson was Prime Minister, America was digging deeper into the Vietnam War and the Beatles were at number one with Help!
For many in the North Sea industry, OTC in Houston has become part of the annual ritual. Unlike many such events which come and go in fashion, this one remains the top destination for many of the industry’s players and politicians from a’ the airts. The Offshore Technology Conference has been going strong since 1969 which means it has seen a few extreme ups and downs in the price of oil and plenty gloomy prognostications about the future. But in a sense, the event’s own longevity points to the underlying truth that this is an industry which has long since learned to take such fluctuations in its stride, and perhaps even turn them to advantage. For some of the old Aberdeen lags who have packed their suitcases once more and headed for Texas over the past few days, OTC is a great social occasion as well as a business one – a chance to meet old friends and particularly renew contact with many in the international industry who have, at some stage in their careers, passed through the North Sea industry.
Imagine an uninformed stranger arriving in Scotland and examining what passes for an energy policy. What conclusions would be reached about the self-contradictory, self-defeating chaos that has been achieved so far? On the one hand, we have a Scottish government which has made massive virtue out of a low-carbon energy policy, targeting a generation equivalent to 100% renewables. On the other, we have one of Europe’s most polluting power stations scheduled for near-imminent closure. Our passing stranger might reach one of two conclusions, or possibly both. First, the closure of Longannet is entirely consistent with the stated objectives of the current Holyrood administration.
By and large, the UKCS oil & gas story has been one of success. However, this has not been the case in the waters west of the Scottish mainland and the Hebrides. Rather, it has been one of disappointment and, unlike bustling Shetland, somehow oddly remote from Aberdeen. Scotland’s west coast has always had a slightly arms length relationship with the oil & industry – intimately involved at some levels but never the front line in terms of activity or economic impacts. It was not always expected to remain that way. I remember, almost 40 years ago, attending explanatory meetings in Stornoway and elsewhere at which oil industry executives talked confidently about the industry’s expansion to waters west of the Hebrides. It was not a case of “if?” but “when?” which explains why that expectation has never quite gone away even though it has rarely seemed close to being fulfilled.
The speed with which the North Sea’s prospects have become engulfed in crisis and doom-laden predictions has taken the world, and not just our own small corner of it, by surprise.
A very recent issue of the trade paper, Renewable Energy News, carried an apocalyptic headline: “Wave and Tidal Staring Into the Abyss”. It is difficult to disagree, at least in the short term. The gloom was prompted by the demise of two companies. Edinburgh-based Pelamis – which described itself as “the most advanced wave energy company in the world” – went into administration. Then Siemens shut down Marine Current Turbines along with the rest of its ocean power division. Pelamis and MCT have long been seen as front-runners in their respective technologies. Considerable sums of public money have been ploughed into them. But failure to deliver evidence for potential commercial success has been their undoing.
Sir Ian Wood wrote an interesting article recently in which he discussed the window of opportunity for Aberdeen to take advantage of its oil capital status in order to make radical improvements to the city centre. To those of us who are occasional visitors to the city, it has long been an enigma that there is so much wealth in and around Aberdeen yet this is so inconsistently reflected in the face it shows to visitors, at least on first acquaintance.
I was in Hamburg recently for the biggest wind power trade show in Europe with 33,000 people attending and 1,500 companies exhibiting.
Sir Ian Wood did not, I am sure, particularly want to get involved in the independence referendum debate. Eventually, he was driven to do so by the gross misrepresentation of a subject he knows better than almost anyone.
Last month brought a major announcement from regulator Ofgem that carried the glad tidings of the "green light" for a new £1.2billion link between Caithness and Moray.
It is a measure of how precarious our electricity supply industry has become that National Grid has put in place precautionary measures to protect us from the possibility of black-outs in the months ahead.
Scotland's record as an exporter is not as good as it should be or needs to be if we are to create economic growth and sustain employment. In recognition of this, the Scottish Government set its own target a couple of years back of doubling the number of companies engaged in exporting by 2020.
Dundee is the latest location to notice the chasm that exists between the Scottish government's rhetoric on renewable energy and the reality of what is being delivered.
When dramatic change occurs quietly, there is always a danger that its significance will be correspondingly under-estimated.
It is difficult to avoid the impression that the potential for a major new Scottish industry in renewable energy is slowly ebbing away.
For those of us who despair of the current focus of political debate in Scotland, Monday, February 24, confirmed our fears and should act as a severe warning for the months and years ahead.
I am writing this to the sound of Atlantic waves crashing against the cliffs and gales blasting the windows of my home. It has been a rough winter here in Lewis and it ain't over yet.
Over the past few months, I have been carrying out a review of Scottish exporting on behalf of the Scotland Office and I hope that its conclusions can be brought together early in this new year, writes Brian Wilson
A few days in China acts as a great corrective to all assumptions about energy policy and priorities, both domestically and globally.
Politics and energy are never far apart but the past few weeks have brought them into even closer alignment than usual. And there are huge lessons to be learned, or at least discussed.
It's time we had some honest, dispassionate assessment of Scotland's prospects as a significant developer of offshore wind projects - even if it isn't all good news.
