Scotland can be proud of its great heritage and its central role in this evolving sector: with the most recent snapshot showing the oil and gas sector it supports 90,000 jobs in Scotland out of 214,000 across the UK and generates £ 16 billion of additional value in economies across the country. Over the lifetime of the basin, the sector has paid over £ 400 billion in manufacturing taxes to HM Treasury and, in 22/23 alone, the sector will pay £ 8 billion in corporate taxes and another £ 7 billion in the first. 12 months of energy levy on profit.
Of course, the industry is much more than a spreadsheet and it should always be remembered that, through economic, political and pandemic turmoil, thousands of workers living off the North Sea and many thousands more supporting them ashore, have fueled our lives, supplying nearly half of the nation’s gas, plus oil equivalent to over 80% of the UK’s needs.
In 2019, we were one of the first industries to take our weight behind net zero and publish our long-term plans to get there. However, as we race to reach net zero by 2045 in Scotland, we must remember that, for the time being, the resources of the North Sea remain critical to meeting our energy needs.
Although much of the public debate focuses on electricity generation, it represents only 22% of our total energy consumption. Domestic use (mainly heating) and transport remain our main sources of energy consumption (29% and 33% respectively). Transport is almost entirely powered by petroleum products (94%) and over 80% of UK homes depend on gas for heating.
Energy and Innovation
While oil and gas will remain part of our energy mix for a few years to come, the offshore energy industry is driving innovation to build the low-carbon energy infrastructure for the UK’s future. This includes technologies as diverse as floating wind turbines, facilities for mass production of hydrogen, and systems for capturing CO2 waste and then burying it, safely, deep under the seabed in empty oil and gas wells. Our most recent economic report found that the UK has the capacity to permanently store 78 billion tonnes of CO2, roughly the equivalent of two centuries of UK emissions.
And we can see this transition to new energies happening now. Nearly 44% of ScotWind’s capacity (60% of floating wind capacity) is supported by companies that traditionally would have been considered oil and gas businesses. This is an example of energy integration in action and demonstrates how the transfer of skills, capabilities and capital from the oil and gas sector will be a central part of offshore wind capacity growth.
As Scotland becomes home to a new generation of offshore power generation, we are working hard to support our supply chain organizations in entering this ever-expanding industry by helping them innovate, win contracts, create new jobs and export energy. their products and their skills the world. So far, the Offshore Wind Growth Partnership initiative has supported over 130 projects through funding of nearly £ 13 million, with plans to invest up to £ 250 million. And in February OEUK is proud to bring Share Fair back to Aberdeen, an event that showcases upcoming opportunities for supply chain companies, allowing energy operators and investors to raise their awareness of the experience, innovative products and of specialized services offered by suppliers across the UK.
Scotland now has the opportunity to realize the full potential of the energy transition and truly reap the rewards of our heritage and industrial experience. To support this we need an integrated energy strategy that recognizes our current and future needs, provides clarity for the sector and puts skills and communities at the center, so that together we can realize our shared ambition to reach net zero.
Jenny Stanning is responsible for leading OEUK’s external affairs, events and membership teams. In this role, her responsibilities include working with governments, parliaments, industry leaders, trade and industry organizations, and regulatory bodies to ensure that members’ interests are well represented.
This article is sponsored by OEUK.