Official analysis reveals accelerating the decline of Scotland’s oil and gas production will increase Scotland’s emissions, threaten jobs and ultimately could make Scotland poorer.

The report, commissioned by the Scottish Government, says Scotland will need to ‘carefully manage’ the decline in oil and gas alongside the growth of the new low carbon sector to ‘minimise any negative impacts of the energy transition on society and the economy’.

It also finds the industry was responsible for a total GVA of £16bn to the North East, equivalent to 9% of total Scottish GDP in 2019 – highlighting the importance of the sector to people and jobs in the region.

The independent report was commissioned as part of the draft Energy Strategy and Just Transition Plan (ESJTP) consultation process. The initial draft of the strategy suggested the North east should accelerate the decline of oil and gas production.

Scotland gets 79% of its total energy from oil and gas. Across the UK, about 24 million homes (85% of the total) rely on gas boilers, 32 million vehicles run on petrol and diesel, and 42% of electricity comes from gas.

Offshore Energies UK, which represents 400 companies involved in producing energy from gas, oil, wind and hydrogen, says the new analysis reaffirms the ongoing need for domestic production as Scotland transitions to lower carbon forms of energy.

Jenny Stanning, OEUK’s external relations director, said:
“All three candidates to be the next First Minister of Scotland should read this report. This new independent analysis shows accelerating the decline of North Sea oil and gas production could increase Scotland’s emissions because we’d simply import more. It’s why we remain concerned about the Scottish Government’s draft plan, which suggested accelerating the decline of Scottish oil and gas production.

“Increasing reliance on imports would be bad for Scottish jobs, the economy, and our climate goals, because as this report shows, imports tend to be associated with a higher carbon footprint.

“More broadly, this independent analysis shows the Scottish economy is set to lose £11 billion per year under existing Scottish Government transition plans. Scotland will be poorer under these plans and we cannot allow this to happen. Our brilliant skilled people, world class expertise, and unrivalled capabilities mean we are well-placed to realise a successful offshore energy future for Scotland.

“We have to get this right – 25,000 jobs, 98% of which are in the North East of Scotland, depend on this. We all know we need to expand sustainable energy production as fast as possible. Our industry is already working to deliver the UK and Scottish Governments’ climate goals through cutting emissions from the production of oil and gas while ramping up investment in renewables.

“In the meantime, and as this report shows, we should continue to support domestic production of oil and gas to meet ongoing demand.  

“We are reviewing this paper in full with our members and look forward to responding to the consultation. We continue to make the case that the Scottish Government’s energy strategy must both acknowledge the continuing role of oil and gas in Scotland’s economy as well as our sector’s role in a rapid transition to a low-carbon future.”

KeyFacts Energy Industry Directory: Offshore Energies UK