Over the past five decades, North Sea production has established an industry that has generated over £330 billion in corporation taxes and petroleum duties, over and above income tax, VAT and other revenues. The industry currently supports almost 125,000 Scottish jobs.
Our draft Energy Strategy reaffirms our strong commitment to the oil and gas industry in Scotland and the positive role that the sector will continue to play for decades to come. The Scottish Government remains committed to maintaining domestic oil and gas exploration and production, and maximising economic recovery. For the first time, we clearly articulate this within the context of our climate change objectives under the 2009 Act.
North Sea production is highly-regulated, with some of the most advanced and comparatively least polluting production methods in the world. The sector also contains a range of innovative and world leading companies, many of which I have had the privilege to visit as Energy Minister.
Sustaining North Sea production will allow our offshore oil and gas industry to play a positive contribution in the required transition to a low carbon economy. It will also result in lower net global emissions than under a scenario where our energy system becomes too dependent on imports, which, in many cases, have a higher production and transportation carbon-intensity.
As a result of advances in technology, many of which are developed here in Scotland, new and innovative ways of using hydrocarbons are emerging. This will be a continuing opportunity for decades to come with new energy sources and technologies such as Hydrogen and Carbon Capture and Storage having the potential to substantially reduce the cost of decarbonisation.
And at the same time, the expertise in the sector, such as vital subsea engineering skills, will also prove invaluable for the engineering and innovation challenges posed by the low carbon transition.
Unlike the UK Government’s Industrial Strategy – which has fleeting mention of oil and gas – our Energy Strategy is clear about the role that oil and gas can play in reducing UK exposure to energy price fluctuations and maintaining security of supply.
Our draft Energy Strategy conveys a clear message to industry – the efficient recovery of North Sea oil and gas as a highly regulated source of hydrocarbon fuels will continue to be a priority for this Government for decades to come.
Paul Wheelhouse MSP is the Scottish Government’s Minister for Business, Innovation and Energy.
