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‘Green myth’: Scots oil industry sheds 1000s more jobs than gained by renewables

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It has raised serious concerns over promises from the Scottish Government that the just transition from fossil fuel production to low carbon “means an opportunity to protect, build and create jobs”.

The Scottish oil and gas jobs loss has come despite the UK Government pressing ahead with new licensing for fossil fuels projects.

Ministers have now been accused by unions of mismanaging Scotland’s energy sector and of having “no credible plan” for the future while the green jobs revolution is being described as “remaining a myth”.

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Data gathered by the trade association, Offshore Energies UK working with the multinational data analytics and consumer credit analysis Experian found that the number of jobs directly and indirectly employed in oil and gas in Scotland have crashed by nearly 40% since 2013 from 117,900 to just 74,100 in 2022.

During the period, the UK Government has issued roughly 400 new drilling licences in five separate licensing rounds.

According to official estimates, the numbers employed in Scotland in the low carbon and renewable energy economy employment has only risen from 23,200 in 2014 to 25,700 in 2022. It was previously revealed that jobs in the low carbon and renewable energy sector (LCRE) on Scotland had dropped by 13% in the year from 29,700 – while turnover has soared by 47% from £8.853bn to £12.992bn.

Over ten years ago the Scottish Government were championing the desire to be the green energy capital of Europe with around 28,000 jobs in offshore wind alone by 2020.

The Scottish Government’s own just transition plan alongside sets out how thousands of oil and gas workers will be moved into other energy industries as the North Sea sector declines.

Under the plans, the Scottish Government said that the number of green jobs will be increased to 77,000 by 2050. Ministers said there would be a “ramping up of jobs” before 2030 and expects a “further acceleration” after 2030.

Derek Thomson, the Scottish secretary of the Unite unite said jobs losses was a “devastating blow to the Just Transition agenda”.

The Herald:

He said: “It doesn’t take a mathematical genius to work out that the replacement ratio of jobs from oil and gas to renewables just isn’t possible on current trends.”

“When you drill down further the offshore and onshore wind sectors have contracted in job numbers. These are the industries which politicians have repeatedly said would lead to a green jobs bonanza.

“The hard truth is there is no green jobs revolution, it remains a myth.”

“The reality is that oil and gas will be part of the energy mix until at least 2050. We need to explore every policy tool to protect these jobs until there is greener jobs for oil and gas workers to make the transition. If not, we are on the verge of deliberately pushing tens of thousands of people into unemployment with no coherent energy plan in place.

“This situation would create a significant downturn in our economy and every one of us will pay the price for government failure.”

It can be revealed that the Scottish Government’s own just transition commission is itself over the strategy to move oil and gas workers to renewable industries.

A letter to ministers said the energy strategy needed to set out a “credible path” to deliver the workforce the sector requires, and ensuring “orderly pathways for those losing, or at risk of losing their jobs and a plan to establish structured intervention for new jobs in the green industries”.

It said that this “must include” the provision of meaningful support to offshore workers through the transition.

Scottish Renewables pointed to a report recently published with Strathclyde University’s Fraser of Allander Institute which showed Scotland’s renewable energy industry and its supply chain supported more than 42,000 jobs and over £10 billion of output in 2021. The report assessed the impact of the renewable energy sector and its spill-over benefits on Scotland’s supply chain and economy.

It says there needs to be “much more robust data collection” to understand how jobs and skills are tracked in a well-managed energy transition.

The OEUK’s estimates based on government data and industry modelling show that in 2013 the 117,900 employed by oil and gas in Scotland included 27,500 that were directly employed and 90,400 that were indirectly employed in a support capacity in the wider supply chain and whose work is calculated into a business’s costs. That fell to 74,100 in 2022 including 31,000 directly employed and 43,000 indirectly.

There was a further 61% fall in the estimated number of induced jobs in Scotland that are only viable in the wider economy because the oil and gas industry is active in the local economy, like restaurants and grocery stores. The fall is from 50,600 in 2013 to 19,500 in 2022.

It comes as the nation’s only oil refinery, which is set for closure next year putting thousands of jobs at risk, is expected to get a stay of execution – after a key reason for its demise was quietly brought back into action after a multi-million pound investment.

In November bosses at the Petroineos plant in Grangemouth told staff that Scotland “simply won’t be big enough to support a fuels refinery” and set a timeline for its closure next year.

The Herald:

Refinery owner Petroineos – the joint venture between Ineos Group – the petrochemicals giant controlled by Sir Jim Ratcliffe – and China’s state-backed PetroChina – which bought the refinery in 2005, said it will remain a refinery until spring 2025 and that jobs would remain safe in the short term.

The Grangemouth plant was established almost a century ago and became symbolic of Scotland’s ‘black gold’, used by the Scottish National Party during the 1970s in making their economic case for independence from the rest of the UK.

The vital Grangemouth hydrocracker unit, which produces jet fuel, diesel and Liquefied Petroleum Gas (LPG) went offline in April, last year and has not operated since. It is seen as a key reason why the the refinery was heading towards imminent closure.

But the Herald revealed that the profitable unit has been started up again with insiders saying it was expected to have cost around £30m to fix.

The development has led to calls to lift the immediate threat of closure.

Insiders told the Herald that the business is taking a “watch-and-see” approach and that mid-2025 is now seen as the earliest that the plant will halt production as an oil refinery. It is expected this will mean that an end point will be nearer to 2027 when new investment is needed on the hydrocracker.

The Scottish Trades Union Congress which has been concerned over the gains the nation is getting from the green energy revolution said that urgent action is needed to change the present course.

STUC general secretary Roz Foyer, said that when it comes to growing jobs in renewables to deliver the just transition, Scotland is the “poor relation” of where things are for the rest of the UK.

“Our governments are waving the white flag as multinational companies are left to take decisions of huge significance to energy workers and our economy. From Petroineos proposing to close the Grangemouth refinery to offshore wind companies bypassing manufacturing sites in Scotland, the mismanagement of Scotland’s energy sector has real world consequences.

The Herald:

“Although jobs may have fallen in renewables, we’ve seen turnover rocketing. Without a rapid change in approach, Scotland’s renewable resources will be handed away to multinational companies when it should be used to reindustrialise our communities and protect the livelihoods of energy workers. There is no credible plan on the table despite years of talk but the urgency is starker for every year of delay.

“We’re recommending that going forward the Scottish Government should bring the active involvement of the public sector into the green economy, using ownership at a national and local level alongside stricter conditions to guarantee the creation of new jobs, on good terms, and community wealth from renewable energy.”

Twelve years ago, the potential wind and marine energy power in the Pentland Firth – where the north-east Atlantic meets the North Sea – led the then First Minister Alex Salmond to dub it the “Saudi Arabia of Renewables” with Scottish firm BiFab at the time making turbines for offshore wind farms.

Video: Then First Minister Alex Salmond in 2011 compared the development of a new green energy revolution in Scotland to how the nation “started the design” of North Sea oil and gas platforms. 

In November, 2010, Mr Salmond, first announced a £70m investment fund to finance the offshore wind sector.

He said by 2020, 28,000 jobs could be created directly servicing domestic and worldwide offshore wind markets and add £7.1 billion in value to Scotland’s economy.

Opening the Scottish Low Carbon Investment conference in Edinburgh, he urged private finance leaders to seize the multi-billion pound opportunities arising from the renewable and low carbon technology revolution.

But Scottish jobs in offshore wind alone, according to Office for National Statistics estimates, fell from 3200 in 2021 to 3100 in 2022 – as concerns grew about the scandal of cheap foreign labour replacing British workers to serve Scotland’s green revolution.

Scottish Renewables which has previously queried ONS data, has approached the official statistics authority about the modelling it uses to gather data on the renewable energy industry.

Claire Mack, chief executive of Scottish Renewables, said: “While our members continue to focus on delivering the projects we will need to meet our climate ambitions, as an industry we want to clearly demonstrate how we are benefiting not only Scotland’s but the UK’s economies as we transition to a net-zero future.

“The UK and Scottish Governments urgently need to enable the Office of National Statistics to be able to better collect data on the renewable energy sector that will support transparency and accountability as our industry moves towards reaching its economic and environmental targets as part of the energy transition.”

It is not thought that any complaint has been lodged with the Office for Statistics Regulation over the veracity of the ONS data.

ONS said that the data is based on samples and was subject to variability.

A Scottish Government spokesman said: “The Scottish Government is absolutely committed to a just transition for the energy sector, and ensuring we take workers with us on our journey to net zero.

 “Independent analysis shows that employment in oil and gas sector is forecast to fall in line with the North Sea basin’s decline. However, it also shows the considerable economic opportunity from renewable energy to Scotland’s economy.

“We need to harness the skills, talent, and experience located in the North East to support the buildout of low carbon technologies in Scotland. With the right support, the number of low carbon jobs is modelled to rise as the result of a just energy transition, delivering a net gain in jobs across the energy production sector overall.”

The UK Government has been approached for comment.

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