A balanced energy transition: our responsibilities as leaders in the energy sector

15 October 2020

The Scottish Government’s announcement in the early summer of a £62million support package to help deliver a net zero future was warmly welcomed across the Energy sector. Not only does this respond to and show real commitment and support to meeting Scotland’s ambitious climate change targets, it also demonstrates the importance of investing in the Energy sector at a time where a more traditional oil & gas industry faces the reality of longer term challenges. 

Threats to the oil industry

Oil & gas has this year suffered from the double economic shock of Covid-19 and crashes in global commodity prices, both sudden and deeply damaging.   

The biggest existential threat and crisis facing the oil industry, however has always been climate change.  Long before Covid-19 struck and with roots going back many years, the drive for energy transition was gathering momentum and moving further up the agenda – thrust into the public conscious by street protests, demonstrations and political debate.   

Now, it is widely thought that the oil industry may permanently change because of renewed commitments and heightened attention given to climate change issues.  This is even reflected in larger oil & gas companies with their publicly profiled net-zero targetsindicating that in the long run they will be investing less in oil & gas and more in clean energies. 

The Scottish Government’s multi-million Energy Transition Fund is therefore extremely timely, but it also highlights progressive activities and initiatives that have been underway for a considerable time already.  It recognises that our Energy industry will need to change.  And it supports that through a process of change and adaptation, we will need to protect jobs, reskill, preserve and grow talent, and nurture economic value in Aberdeen, Grampian and throughout Scotland.

How should leaders move forward? 

As global energy leaders, it is crucial that we embrace and grasp the many opportunities of energy transition.  This is undoubtedly the future and if we play our cards right, it will enhance our standing.   

An energy transition process that is too rapid, and one that turns its back on oil & gas too soon could return more damage that good however.   

It’s easy to get carried away quite quickly with some statements and beliefs declaring that this is now the end of oil & gas.  Oil and especially gas, however will be key to managing the transition from one dominant energy source to another.  An energy transition that is too quick and shuts down oil & gas may lead to near term power shortages because we physically cannot get enough renewable energy into the system. 

The environmental impact of green energy

What is also often missed or misunderstood, is the fact that many green energy sources such as wind and solar, along with the drive to electrification of our infrastructure and transport also have a dark side to their environmental credentials.   

Firstly, there is the issue of responsible and sustainable sourcing of metals, minerals and rare earth elements.  Major concentrations of the latter are often found in developing countries, such as throughout Africa where working conditions and environmental standards can be ashamedly poor.  Left under or un-regulated, these issues will become huge problems for communities and our planet.   

Secondly, there is the potentially overwhelming question of decommissioning and disposal of green energy technology and equipment that has come to the end of its life span.  Currently for example, the only way to deal with used wind turbine blades is to bury them.   

It seems that through our serious efforts to improve one environmental problem, we are in danger of creating new environmental problems.  There will always need to be a trade off somewhere – but surely a more measured plan to tackle energy transition would retain and create greater benefits for all stakeholders, local and globally?  Oil & gas will need to play a very large role here so we cannot try and move on and away from it too quickly. 

The creativity, knowledge, expertise and resilience in the Scottish Energy sector is significant global export and is something that as a nation we should take more pride in and look to enhance .  Finding new and different ways of tackling a just and managed Energy Transition challenge through innovation and inventiveness will always create new job opportunities and better solutions than those available today across all parts of the sector, including in oil & gas.   

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