Associate Feature: Reasons to be cheerful about Scotland’s energy future

It’s an important time to be part of Scotland’s offshore energy industry. At the same time, it’s a concerning period as well. Both of these truths coexist, and how we navigate the challenges and capitalise on the opportunities will define the future of Scotland’s energy sector and economy.

As we move toward a net zero future, the offshore energy sector can and should help power Scotland’s economic and industrial potential. Today it supports around 200,000 jobs, with 90,000 of those jobs in Scotland, and is a cornerstone of the nation’s economy. It provides homegrown energy to 5 milliion people across the country, making it a critical participant in our national infrastructure. But how do we make sure this remains the case as we look to the future? 

The answer lies in choosing a homegrown energy transition—one that recognises the value of the resources and expertise we have here in Scotland. This is the case I made to the First Minister and Cabinet Secretary Gillian Martin in September, and one we continue to make to all parties and leaders on behalf of the sector. By working together, we can build a future that delivers energy security, decarbonisation, and economic growth. 

The Challenges of Deindustrialisation 
Since the 1970s, Scotland’s manufacturing capabilities, much like the rest of the UK’s, have significantly diminished. Manufacturing as a proportion of the UK economy has shrunk from around 25% to just under 10%. The service sector now dominates, accounting for approximately 80% of the UK’s economic output and an equal share of tax receipts.

Deindustrialisation has left a once-thriving industrial base, including refining, diminished, with much of the work outsourced to other countries. Many MSPs will know all too well the pain of unmanaged transitions for affected communities. While some have praised the resulting reductions in domestic emissions, it’s critical to remember that emissions from these activities still exist - they’ve just been relocated. Known as “scope 3” emissions, these emissions occur outside our borders but are tied to the products we import.

This is a problem we can’t ignore. Decarbonisation should not mean deindustrialisation. We need to retain our strategic industrial capabilities, and the expertise within Scotland’s oil and gas sector can play a vital role in this effort. 

The Role of Oil and Gas in Scotland’s Transition
The North Sea has long been at the heart of Scotland’s energy economy. Over the years, the industry has become increasingly adept at reducing the emissions from oil and gas production. These skills will be essential as we transition to a low-carbon economy.

OEUK’s Energy Transition Outlook emphasises the importance of ensuring resilience in our journey to renewable electricity with continuing oil and gas production during this transition. Carbon Capture, Utilisation, and Storage (CCUS) technology alongside leveraging hydrogen as a clean fuel will also play a pivotal role in decarbonising heavy industries like steel and cement sectors that are hard to electrify.  

This will help Scotland retain industrial capacity while meeting its climate goals. 

Offshore wind, too, provides ample reason for optimism. Building on our 50 years of offshore expertise, Scotland is recognised as a world leader in floating offshore wind technology, with its waters offering the second-largest potential globally, behind only China. 

Reasons to Be Cheerful
There are indeed reasons to be cheerful about Scotland’s energy future. We have a skilled workforce, a wealth of natural resources, and a strong foundation in energy innovation. The offshore energy sector has the potential to lead Scotland into a new era of economic prosperity while addressing the urgent need for decarbonisation.
 
However, this future is not guaranteed. It will require a clear pathway in the Scottish Government’s upcoming energy strategy that builds on our industrial strengths, recognition of the role of the industry and private investment in the Green Industrial Strategy and close collaboration between industry, government, our skilled workforce and other stakeholders. By choosing a homegrown energy transition, we can ensure that Scotland remains a global leader in energy and that the benefits of this transition are felt by everyone—from the 200,000 people who depend on the energy industry for their livelihoods to the millions who rely on it to power their homes and businesses.
Important times. 

This article is sponsored by Offshore Energies UK

https://oeuk.org.uk/