Published on December 11, 2023 at 10:59 a.m.
An “honest and frank” conversation. This is how the director of the Aberdeen Chamber of Commerce, Russell Borthwick, described the exchange between local business leaders and Labor leader Keir Starmer, who was visiting the European oil capital.
The leader of the opposition party, poised to win the next elections in the United Kingdom, has clearly announced the color: Labor wants to put an end to any new exploration in the North Sea.
A granite city transformed by BP
“We just hope that they will understand that it makes no sense to suddenly stop oil and gas, if it is just to import large quantities of it from elsewhere,” sighs Ian Wood.
A local figure in the oil industry, this entrepreneur built his fortune by transforming the small family business inherited in the 1960s into a logistics and engineering giant for the oil industry.
It was the time when the “granite city”, nicknamed for the monotony of its gray facades, was only a small fishing port, with a local economy based on paper and textiles. Until this day, in 1969, when “British Petroleum” (BP) discovered an oil deposit 150 kilometers from the coast. “What happened in the 70s was a revolution. Of course, we weren’t talking about climate change back then,” he says.
For him, the reconversion that awaits Aberdeen is of comparable magnitude. “And it won’t be simpler,” he believes, “because now many technologies will come into play. We will have to make a transition to a range of energy sources. » To offset oil and gas, Scotland wants to invest in offshore wind power, carbon capture and even hydrogen.
With its 47 million barrels of oil and gas extracted in the North Sea in nearly fifty years, Aberdeen is a textbook case in terms of energy transition. The Scottish city has already had its ups and downs. Its boom times built its reputation as having the highest concentration of millionaires in Britain, behind London. Mentalities are just as marked by periods of “crash”, such as in 1986 or 2014, when oil prices reached their lowest level.
Since its peak in 1999, UK oil and gas production has started to decline. While hydrocarbons are at the heart of the COP28 in Dubai, two positions stand out: some are calling for an acceleration of the transition, in order to give Scotland a pioneering role, others want to give time to the oil majors and gas. time to invest.
British Prime Minister Rishi Sunak recently joined the second camp by announcing the resumption of oil licenses in the North Sea.
A decision which delighted industry representatives, such as Ian Wood, in favor of an “organized transition” rather than putting the industry “facing the precipice”. “We must use our strengths in oil and gas to develop other sources of energy. We will not be able to make this transition without this industry,” he argues.
“A just transition”
But this discourse is increasingly encountering resistance. At the University of Aberdeen, researcher Daria Shapovalova has launched a chair to work on a “just transition” and propose “new ideas, debates and socially centered responses to “carbon neutrality”. “Traditionally, public debate in the north-east of Scotland has been largely dominated by the energy industry,” she said in a blog post.
Co-founder of Aberdeen Climate Action, Erik Dalhuijsen, a former engineer in the oil industry, speaks of a “form of addiction” to hydrocarbons in Aberdeen. “Companies want to develop carbon capture, but it’s just a way of perpetuating their old business model,” he explains. Few politicians really understand what the energy transition means. They think we can just replace oil with something else. »
Ishbel Shand, environmental activist, denounces the “greenwashing” of the industry. For her, the local population is not in favor of reviving oil: “But it is difficult to have this debate, because many people are employed by the industry and are afraid of losing their jobs. “, she admits.
90% transferable skills
The consequences on employment remain difficult to predict. A study from Robert Gordon University in Aberdeen indicates that 90% of offshore skills are transferable to renewable energy.
However, there is no guarantee that this transition will be equivalent in number of jobs. According to this same study, the number of jobs in offshore could increase from 150,000 to 225,000 by 2023 in the event of a successful transition, but on the contrary decrease by 15% if investment objectives are not achieved.
Indeed, the uncertainties at the industrial level are significant. Starting with the capacity of the British electricity network which does not, for the moment, allow it to follow the growth of the renewable energy base.
“Many investment decisions are on hold, waiting for a connection to the network,” explains Maggie McGinlay, managing director of ETZ, the energy transition business hub. To the point that the media are talking about “zombie projects”.
Another difficulty: rising supply costs for energy suppliers. A call for tenders launched in September by the government received no applications, the price proposed by the State being considered too low. Since then, the government has relaunched this offer at a more generous price. Despite these disappointments, Ian Wood is convinced that Scotland will achieve “carbon neutrality” by 2045. “But we will still produce gas and oil,” he assures.