Think tank calls for managed transition for North Sea oil and gas


Following Covid-19, a think tank has called for the oil and gas industry to be reshaped to help achieve net zero and restore nature in Scotland and across the UK.

On 3 December, IPPR published a report, Net Zero North Sea, in which it set out the need for a “managed transition” for the oil and gas industry, which has been among those hardest hit by the pandemic. It called for a long-term plan that reduces oil and gas extraction from UK waters in the coming years; builds bridges out of the sector for workers and businesses set to be affected; and provides the right investment and support for the wider communities that will also be impacted.

It recommended a net zero deal, feeding into the government’s commitment to developing an oil and gas sector deal, that set targets and caps for oil and gas extraction, finds new opportunities to protect current and future workers, and outlines plans for investments in new low-carbon industries.

Recommended key components of this include that the UK and Scottish governments set clear five-yearly targets to reduce oil and gas production, consumption and exports in line with net zero targets; that the “maximum economic recovery” from oil and gas fields is changed to implement caps aligned to net zero; and that, where possible, local councils in affected areas are funded to purchase oil and gas assets to be transformed into community owned projects. It emphasised that the Scottish and UK governments should work with local councils to explore the repurposing of oil and gas infrastructure for technologies such as hydrogen and carbon capture and storage (CCS).

The government’s recently announced 10-point plan, while considered a “good start” when it comes to setting out investment in hydrogen and CCS, needs a route for oil and gas workers to access these employment opportunities, IPPR stressed.

A potential way to do this could be through reskilling academies, with the report recommending that they are set up in both Scotland and the UK, costing a collective £103mn a year – £40.5mn and £63.4mn respectively. This would allow for oil and gas workers to move into roles in industries such as decommissioning, offshore wind and energy efficiency retrofitting, as well as hydrogen and CCS.

Taking such action would hand the UK and Scottish governments the opportunity to show global leadership ahead of COP26, the report added. It would demonstrate the economic, environmental and reputational benefits of being a major historical oil and gas producer to announce a timetable to wind down fossil fuel production to align with both the net zero emissions target and the Paris Agreement.

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