All of us who live in the north-east of Scotland are acutely aware of how reliant our economy has been on a world-class oil and gas sector.
For almost 50 years the region has made a massive contribution to the UK’s economic and energy requirements and, in doing so, has sustained thousands of jobs in and across Aberdeen and Aberdeenshire.
I’m hugely fortunate and privileged to have been part of the oil and gas industry for the majority of that period but there is now, as the industry continues to mature, questions and concerns from many quarters as to what the future may hold for the region.
I am hugely optimistic about the future, one that builds on our existing and vast strengths in oil and gas and puts it toward realising the ambition to be an internationally recognised energy cluster focussed on the delivery of net zero.
2023 witnessed a number of developments and interventions that certainly provide the basis for that optimism.
Acorn’s approval and renewables funding
Somewhat belatedly but hugely welcome nonetheless, the UK Government approved the Acorn carbon capture and storage cluster at St Fergus on to its Track-2 process as part of further development of the technology.
The Scottish cluster remains one of the most cost-effective locations to advance CCUS in the UK given the capacity for CO2 storage in the North Sea and the existing oil and gas infrastructure available to repurpose for CO2 transport and storage.
© Supplied by StoreggaThe Scottish Government also weighed in with an announcement of a £500 million fund designed specifically to anchor a domestic supply chain to support offshore wind.
This has particular resonance given a majority of all successful ScotWind and INTOG projects are within 100 nautical miles of Aberdeen and we have the existing critical mass of diverse energy companies with the experience to support the high-value manufacturing, operations, maintenance and innovation required to deliver these developments at pace.
It is worth emphasising this includes a massive 17GW of agreed floating wind projects accounting for almost a third of the global floating pipeline.
The awarding of an investment zone to the North East of Scotland by both the Scottish and UK governments is a significant boost as we continue to transform our regional economy.
Our reputation as an innovative and productive region is both hard won and well deserved and the investment zone, a £160 million package of fiscal incentives and flexible funding over ten years, will help secure our position as one of the most attractive locations anywhere in the UK, and indeed Europe, for investment in low carbon technologies across different sectors.
Energy security to be ‘high on the political agenda’ as an election looms
It, therefore, appears that our governments, both north and south of the border, are increasingly alive to the sheer scale of the opportunity before us and, with an election year approaching, we can expect energy security, and therefore our region, to be high on the political agenda.
We need to use that position of profile to best affect and collectively pursue priorities that will ensure we fully realise the energy transition opportunity.
Firstly, politicians must recognise the importance of our oil and gas industry as the key enabler of energy transition.
The vast pipeline of new and green energy projects on our doorstep simply aren’t available at a commercial scale just now and won’t be for at least another decade or so at the earliest.
We therefore must sustain our existing energy supply chain and the innovation and skills that it produces, in the meantime.
Secondly, it makes no sense to prematurely cut back our oil and gas supplies only to increase our reliance on costly and carbon-heavy imports. This would be both economically and environmentally counterproductive.
Thirdly, there must be greater grid connections and capacity, and this remains a huge priority if we are to successfully commercialise the wider energy opportunities across the region.
There is, of course, no room for complacency and we should be under no illusions as to the challenges to be overcome if we are to fully realise the potential but the North East of Scotland is set to spearhead the UK’s green energy revolution and this should be a welcome source of pride for everyone who lives and works here.
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