Momentum around our dependency on fossil fuels and climate change has been building for many years, but it has only in the last 18 to 24 months become a leading agenda item in national and world politics. It has been projected into our public conscious and government policies to such an extent that it is now absolutely inconceivable that it can be ignored or pushed aside any further.
The leading agenda item for all world citizens today nevertheless is the COVID-19 pandemic. Our response to this on many levels from healthcare to the economy is absolutely the priority, however what is becoming increasingly evident is how COVID-19 and energy transition have become intrinsically related.
Oil & Gas has recently suffered from the double economic impacts of COVID-19 and crashes in commodity prices, both very sudden and deeply damaging with potentially long lasting implications to the industry in the North East of Scotland, and all other oil regions globally. It has been argued by some that this blow could be the most severe we have ever experienced and potentially irreversible.
Whilst the Oil & Gas sector was responding to the climate change debate long before anyone heard of a Coronavirus, the COVID-19 pandemic has provided further stimulus and catalysis to our collective public, corporate and political conscious for greener living and a healthier planet.
This was demonstrated on 12 June when the Scottish Government’s announced a £62million support package to help deliver a net zero future. The Scottish Government is not only showing real commitment and support to meet climate change targets, it also demonstrates its recognition of the importance of investing in the broader renewables Energy sector at a time where the Oil & Gas industry faces the reality of longer term challenges.
It could be expected that other governments and authorities around the world will follow suit by prioritising the environmental agenda in their support for economic stimulus and development. By direct consequence, this is expected to increase the motion in energy transition investment from other funding sources, including the private sector .
Our major export
It is often observed that in Oil & Gas, you can go anywhere in the world; in the field, on platforms and installations, on vessels, in projects, leadership teams and in the Boardroom – and you will often hear a Scots voice. For such a small nation, Scotland champions many parts of the Oil & Gas industry. In the subsea sector alone, the North East of Scotland leads the UK’s position of having an enviable 55% share of the global market.
The creativity, knowledge, expertise and resilience in the North East of Scotland’s Oil & Gas industry offers a major competitive advantage over other regions and oil hubs nationally and globally. These attributes are directly transferable to the broader Energy sector, including the drive for a balanced and “just” energy transition.
Our Energy talent, experience, innovation and technology are all significant global exports. Many skills are directly transferable from Oil & Gas into renewable energy technologies – from managing large offshore engineering projects to developing and operating niche technology in harsh environments. With significant changes impacting our more traditional Oil & Gas industry whilst simultaneously promoting energy transition, it is our requirement and duty to promote our major competitive advantages from the North East of Scotland to the rest of the world. By embracing these challenges and changes, we will create sustainable economic opportunities and jobs for the region.
By Neil Dinnes, Head of Oilfield Services and Corporate & International Taxes at AAB
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