I was in the world’s offshore oil & gas capital, Houston, on the day that the Scottish National Party swept to its historic victory.
Clear, decisive and I suspect way beyond the dreams of its leader, Alex Salmond, this win really should pave the way to very big advances by the energy industry in Scotland.
However, while the SNP’s bold ambition is for 100% of Scotland’s power requirements to be renewables-based by 2020, and, of course, that this small country becomes a major exporter of electricity over the next several decades, do not for one minute think that this election marks the demise of North Sea oil & gas as a key component of the Scottish economy.
Time and again one comes across people who simply cannot wait for renewables to vanquish the petroleum industry; and some especially want a swift end to the North Sea. However, to hold such a view is naive. It displays a fundamental ignorance about the lifestyle that we in the West have built for ourselves; a lifestyle fed by petroleum. And, of course, it is a lifestyle that most other societies aspire to or long ago grabbed on to avidly.
Just look around your house. With rare exceptions it will be stuffed with plastics. And plastics, as we currently understand them, are among the many products derived from oil and condensates. Of course there are substitutes, including near facsimiles derived from biomass, but their availability is severely constrained.
Rather like cropping for biodiesel, the large-scale growing of crops from which to derive plastics substitutes also poses major challenges, including competition for land that might otherwise be used to grow food, though it is perfectly possible to grow species that satisfy both requirements.
Of course there is algae, and trials in various countries show great promise, especially in North America and to a lesser extent, Europe. But it is early days yet in terms of working out which algae offer the best potential for the production of biodiesel and other petroleum feedstock substitutes.
And, lest we forget, there is also the possibility that off-peak power from offshore windfarms could be utilised for ammonia production from seawater; an elegant feedstock solution according to the late Matt Simmons – the often controversial energy investment banker and founder of Simmons & Company International.
But let’s get back to the practicalities of building Scotland’s renewable power generation capability. While it is indeed laudable to aim for 100% by 2020, this must not be done on the basis that most of the equipment – primarily wind turbines – is simply imported from overseas. By and large, that is what has happened to date.
It is imperative that we create a world class supply chain capable of designing, developing, manufacturing and supporting a long-term suite of appropriate technologies – wave, tide and, even though we are decades behind, big wind turbines too. Nor should pioneering work on other fronts such as algae be sidelined. This needs developing and commercialising.
And it is essential that the oil & gas supply chain be properly engaged. I’m relieved that real progress has been made since the first All-Energy show 11 years ago, but we must temper expectations.
For example, never over this period have I said that Aberdeen is a suitable venue for the manufacturing/assembly of offshore (let alone onshore) turbines. To my mind that is unrealistic.
No one ever built small oil & gas platforms, let alone large ones, in Europe’s energy capital; the main centres of manufacturing in Scotland at one time were Nigg, Ardersier, Methil and, occasionally, Hunterston. So why would anyone expect a big turbine maker to set up shop in Aberdeen?
However, it is not unrealistic that perhaps key components of control systems for wind, wave and tidal technologies could, and even should, be manufactured in Aberdeen and, for sure, specialist equipment for use in the construction and operations & maintenance of maritime renewables infrastructure, such as the innovative crawler bed developed by Fugro for the deployment of work-class remotely operated vehicles in close quarters hostile tidal environments, such as the Southern North Sea.
High end engineering/manufacturing has long been an aspect of the Aberdeen scene, especially subsea-related.
Aberdeen’s core role in maritime renewables should be much the same as for offshore oil & gas – project planning and execution, engineering, masterminding installation of infrastructure, commissioning and, of course, operations & maintenance and HSE (health safety and environment).
Late last year, at the Alex Salmond-led summit in Aberdeen, concern was expressed that Aberdeen was in danger of missing the maritime renewables boat. To my way of thinking that is rank scaremongering and unjustified.
While there could/should be significantly greater respect for what the oil & gas supply chain can do for maritime renewables – and I am regularly reminded that RenewableUK has some way to go in that regard – a dialogue is underway and there is a growing recognition that reinvention of the offshore engineering wheel mostly does not work.
The execution of many of the UK’s Round I and Round 2 wind projects has not been as successful as it ought, precisely because the developers thought they knew better and could make civil engineering practices work offshore. It seems they were wrong; hence today’s greater willingness to engage with the North Sea supply chain, oh, and at least some oil & gas-related HSE practices.
But is that hugely successful supply chain keen to engage in renewables? Judging by the rapidly growing membership of Aberdeen Renewable Energy Group (AREG) and the North Scotland Industries Group (NSIG), and the fact that underwater contracting majors like Fugro, Subsea 7 and Technip have made significant commitments in the hope of cashing in on maritime renewables opportunities, the answer is surely yes.
And yet there is a niggle at the back of my mind to the effect that, yes, they are interested but prefer the oil & gas business. My response is that they ignore the opportunity at their peril.
This is a key reason why All-Energy is so important. This show and its conference represent the perfect forum for both sides to come together, network and forge relationships that could, in time, work to mutual advantage.
With UK Round 3 projects looming – not forgetting the impact of the UK Treasury’s North Sea tax banditry – now is absolutely the right time to be doing this.