Sea Change: Climate Emergency, Jobs and Managing the Phase-Out of UK Oil and Gas Extraction

A landmark report by Friends of the Earth Scotland and Oil Change International reveals, for the first time, the climate impact of North Sea oil and gas extraction, and urges the governments to prioritise a job-creating energy transition. The report lays out in the starkest terms the simple reality that the UK’s oil and gas drilling plans, and Scottish Government’s support for them, are incompatible with any coherent response to our climate emergency.

This is a groundbreaking report which shows not only the dire ecological consequences of the business as usual model projected over the next thirty years, but also the huge potential for a just transition.

Mary Church, FoES’s head of campaigns, stated:

“Climate science is clear that we urgently need to phase out fossil fuels, yet the government and big oil companies are doing everything they can to squeeze every last drop out of the North Sea. To tackle the climate emergency head-on we must ban oil and gas exploration now, and redirect the vast subsidies propping up fossil fuel extraction towards creating decent jobs in a clean energy economy.”

“Real climate leadership means making tough decisions now that put us on a path to a climate safe future. A just transition for workers and communities currently dependent on high carbon industries is an essential part of that.”

Just two weeks after the Climate Change Committee’s net-zero carbon target and UK, Scottish and Welsh “climate emergency” declarations, the ‘Sea Change’ report found that:

• The UK’s 5.7 billion barrels of oil and gas in already operating oil and gas fields will exceed the UK’s share in relation to the Paris climate goals – whereas industry and government aim to extract 20 billion barrels.

• The additional oil and gas extraction enabled by recent subsidies will add twice as much carbon to the atmosphere as the phase-out of coal power saves.

• Given the right policies, clean industries could create more than three jobs for every North Sea oil job at risk, which can enable an “equivalent job guarantee” for every oil worker.

The authors call for termination of the soon-to-be-completed 31st oil licensing round, and cancellation of the 32nd round, which the UK Government plans for later in the year. Instead, they say the UK and Scottish Governments should work with affected communities and trade unions on a Just Transition plan to create new decent jobs in clean industries, alongside a managed phase-out of oil and gas extraction.

The report warns that failing to begin a transition now will mean later action would have to be so rapid as to cause a collapse of the industry, putting tens of thousands of jobs and regional economies at risk.

 

The report further highlights how the UK and Scottish Governments face a choice between two pathways that stay within the Paris climate limits:

1. Deferred Collapse: continue to pursue maximum extraction by subsidising companies and encouraging them to shed workers, until worsening climate impacts force rapid action to cut emissions globally; the UK oil industry collapses, pushing many workers out of work in a short space of time. Or:

2. Managed Transition: stop approving and licensing new oil and gas projects, begin a phase-out of extraction and a Just Transition for workers and communities, negotiated with trade unions and local leaders, and in line with climate change goals, while building quality jobs in a clean energy economy.
Given the tightness of remaining carbon budgets, each new license, permit or tax break for oil and gas pushes the UK further towards the deferred collapse path. This report however recommends the second course; it shows that energy transformation can meet UK climate commitments while protecting livelihoods and economic well- being, if the right policies are adopted.

Local manufacturing and workforce participation therefore need to guide new approaches to economic development, industrial policy and ownership, together with stronger trade union rights for workers affected by energy transitions, including union recognition and sectoral bargaining to ensure acceptable norms on pay and working conditions.

The report recommends that the UK and Scottish Governments:

  • Stop issuing licenses and permits
    for new oil and gas exploration and development, and revoke undeveloped licenses;
  • Rapidly phase out all subsidies for oil and gas extraction, including tax breaks, and redirect them to fund a Just Transition;
  • Enable rapid building of the clean energy industry through fiscal and policy support to at least the extent they have provided to the oil industry, including inward investment in affected regions and communities;
  • Open formal consultations with trade unions to develop and implement a Just Transition strategy for oil-dependent regions and communities.

 

The report shows the projected carbon dioxide emissions form UK oil and gas from 2018-2050.

The report explores the potential for a managed transition to new clean energies and de-commissioning. It states:

“To respond to the challenges presented by climate change while avoiding a deferred collapse of the UK’s oil industry, a structured and planned transition is needed which covers both phasing out extraction and replacing the oil and gas with clean energy to power our domestic economy. Renewable energy is now cheaper in the UK than gas power. Several UK and global studies have shown that a rapid transition to 100% renewable energy is both technically feasible and affordable. The barriers are political.
The history (and present) of UK oil and gas extraction shows what can be achieved when a government sees a strategic interest in enabling an industry. From the first discovery of oil in 1969, the UK was an oil exporter within just twelve years, and by 1985 was the world’s fifth largest producer of oil.”

“It was government policy that enabled this rapid expansion, and government policy (through subsidies and industrial interventions) that sustained extraction long after it would have otherwise declined.”

“Clearly, it is an ambitious project to transform the UK energy system within a couple of decades, just as the rapid development of the North Sea was an ambitious project. However government intervention enabled the oil industry to develop, and it will be government intervention that similarly enables renewables. This report models the impact on the oil and gas workforce of ending the development of new fields. Taking into account jobs created through decommissioning and forecast retirement in the existing workforce, we estimate that 40,000 existing oil workers (direct and supply chain) may need to be in a different job by 2030. To examine the scale of jobs that can be created in compatible clean energy industries and the level of policy ambition necessary, this report models the numbers of new jobs that would be created in offshore wind, marine renewables and energy efficiency retrofits, sectors that have strong overlaps with existing oil and gas skills.”

The report outlines three different scenarios: the Current Trajectory scenario, in which new jobs in the case-study clean energy sectors do not replace the decrease in oil and gas jobs in Scotland; the Existing Ambitions scenario, the case-study sectors create around 1.3 times as many new Scottish jobs as the overall decrease in oil and gas jobs; and the Fully Renewable scenario, the increase in Scottish jobs is even greater.

 

 

The responsibility for the offshore licencing is not a devolved matter. The responsibility lies with the UK government. The report concludes that:

“The UK and Scottish Governments must align policies on fossil fuel extraction with their commitment to global climate goals. This means cancelling the current and any future licensing rounds, stopping issuing permits for new fossil fuel exploration and development and revoking undeveloped licenses. Furthermore, the governments should review whether existing facilities should be phased out early as part of a Just Transition that protects the rights and livelihoods of workers and communities that currently depend on the industry.”

THE UK GOVERNMENT SHOULD:

  • Cancel the 31st offshore oil and gas licensing round and any future planned onshore or offshore rounds;
  • Revoke all existing oil and gas licenses on which no work has yet been carried out, and negotiate the cancellation of all other licenses which have not yet been developed;
  • Conduct a review of how fast existing oil and gas extraction facilities need to be phased down in order to limit warming to 1.5oC, bearing in mind the UK’s greater capacity to finance a Just Transition relative to other countries, and taking a precautionary approach to unproven “negative emissions” technologies;
  • Publish a plan for a managed phase-out of UK fossil fuel extraction and Just Transition in line with the Paris goals.

END SUBSIDIES FOR OIL AND GAS EXTRACTION

THE UK PARLIAMENT SHOULD:

  • Pass legislation banning future licensing of all offshore fossil fuel exploration and development, and onshore exploration and development in England;
  • Amend the Petroleum Act 1998 and the Infrastructure Act 2015 to remove the duty to “maximise economic recovery” and replace it with a duty to align fossil fuel extraction with the UK’s fair share of delivering the Paris goals.

THE SCOTTISH GOVERNMENT SHOULD:

  • Revise its Energy Strategy and align policies on fossil fuel extraction with its fair share of delivering the Paris goals.

THE DEVOLVED ASSEMBLIES AND PARLIAMENT SHOULD:

  • Pass legislation banning future licensing of all onshore fossil fuel exploration and development.

 

 

 

“Sea Change: Climate Emergency, Jobs and Managing the Phase-Out of UK Oil and Gas Extraction”. Download the report here.

Comments (10)

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  1. milgram says:

    Looks like a serious & important piece of work. Thanks for this clear & detailed summary Mike.

  2. Charles L. Gallagher says:

    You cover what all of us should be doing but we could stop burning fossil fuels tomorrow and not make one blind bit of difference globally. Until every country, on the planet signs-up for this, you might as well fart in the wind.

    PS I don’t have any ideas as I’ve never yet found a turkey that voted for Christmas, yet a united effort is required.

    1. Jamie MacDonald says:

      This is always the argument, though we may as well have a turbine turning while we fart…!
      We lead by example and encourage the development of the tech for us, and others too..
      If Scotland has given so many great inventions and discoveries to the world in the past then why not again?
      As this piece states, the alternative doesn’t really measure up..
      For life on Earths sake Charlie, we have to TRY!!

    2. You write as if other countries are doing nothing, this is simply not true. I could bombard you with examples but I suspect it may be futile?

      1. Charles L. Gallagher says:

        Yes please, do they include USA, India, China et al. I will also point out that some countries that thought of abandoning nuclear power are now going back to it and even Norway is building a new experimental thorium-based reactor outside of Bergen. And finally, I completely agree with you Scotland has had great engineers, mathematicians, medics and many more and we still do. But unless we get the big polluters on board we might as we cough and splutter to our graves it will be a bit late to say, “We told you so.” So this does need to be a worldwide effort but how do we get The Chump to recognise ‘Climate Change.’

        1. milgram says:

          There are big polluters here in Scotland that we can (must) deal with. I’ve had it with these “inaction until someone else acts” plans from folk who play game theory with our lives and future.
          The time to act was 30 years ago. So since “we” didn’t, the time to act is now.

          1. Charles L. Gallagher says:

            Sorry Milgram, the time to take action was in the 50’s/60’s which they did but they should have recognised the signs then but what did they do – ripped-up mile after mile of railway though fortunately the track beds were left largely untouched.

        2. First of all I dont agree with the notion that we should do nothing until everyone else is acting in exactly the way we want them to. That is irresponsible. We should lead by example. But is is also just completely factually incorrect to suggest that other countries are doing nothing. Here are some examples:

          SPAIN

          Spain has set out plans to completely decarbonise its electricity system by mid-century and transition to a net zero economy soon after. In a new draft climate law released in Novemeber 2018, the Spanish government set out a strategy to cut emissions to at least 90 per cent below 1990 levels by 2050, and run on 100 per cent renewable electricity by the same date.

          The draft legislation also promises to end all fossil fuel subsidies, ban any new oil and gas exploration, and switch to a 100 per cent zero-emission vehicle fleet by mid-century.

          The plan’s interim goals go over and above EU green energy targets, promising to install at least 35 per cent renewable energy by 2030, with at least 70 per cent of electricity from renewables.

          The draft legislation is more ambitious than the EU’s target of 32 per cent renewable energy by 2030, and will cut greenhouse gas emissions by at least 20 per cent on 1990 levels. Spain also said it would improve energy efficiency by 35 per cent by 2030, ahead of the EU target of 32.5 per cent.

          The work is being led by Spain’s Minister for the Ecological Transition Teresa Ribera.

          INDIA

          India ratified the Paris Agreement on 2 October 2016, almost exactly a year after it submitted its climate pledge, or “nationally determined contribution” (NDC), for the Paris climate talks. India also aims for 40% of its installed electricity capacity to be renewable or nuclear by 2030.

          It further outlines plans to increase tree cover to create an additional cumulative carbon sink of 2,500-3,000MtCO2e by 2030 – roughly on a par with its total emissions across one year.India is now on track to overachieve its Paris targets, after adopting its final National Electricity Plan (NEP) in 2018, says CAT.

          CHINA

          Chinese emissions are massive its true. This is a massive problem. Although for the west to complain about this is odd, as much of its is created by industries servicing western society. “Made in China” has a carbon consequence.

          The biggest factor in determining China’s CO2 emissions in 2018 was coal consumption, at 59% of total energy consumption and over 70% of energy-related CO2 emissions.

          China is the world’s largest emitter and remains heavily dependent on coal.

          However, the country’s plans to shift towards clean energy, led by concerns over the impacts of air pollution and climate change, as well as its keenness to expand in new markets, is also well underway.

          In its pledge as part of the Paris Agreement, China said it will aim to source 20% of its energy in 2030 from low-carbon sources. China accounted for almost half of the solar PV expansion in 2016, according to the International Energy Agency (IEA). China also announced its long-awaited Emissions Trading Scheme (ETS) in December, although this will initially cover only the power sector rather than the eight sectors originally proposed.

          The report notes:

          “Such is China’s significance in energy markets on the world stage that its shift toward clean generation technology is driving the trend at the global level.”

          Factories in China now account for around 60% of global solar cell production. This includes companies headquartered elsewhere who base some or all of their manufacturing in China, such as Canadian Solar.

          USA

          The USA is at war with its mad president who is an active climate science denier.
          Before 2005, US carbon emissions were marching upwards year after year, with little sign of slowing down. After this point, they fell quickly, declining 14% from their peak by the end of 2016.

          Researchers have given a number of different reasons for this marked turnaround. Some have argued that it was mainly due to natural gas and, to a lesser extent, wind both replacing coal for generating electricity. Others have suggested that the declines were driven by the financial crisis and its lasting effects on the economy.

          There is no single cause of reductions. Rather, they were driven by a number of factors, including a large-scale transition from coal to gas, a large increase in wind power, a reduction in industrial energy use and changes in transport patterns.

          Action is happening at a state and city level despite Trump.

          Nearly 40% of US CO2 emissions are in the hands of states that have either committed to meeting their share of the US’s Paris Agreement target or who have established their own ambitious long-term emission reduction goals, a Carbon Brief analysis has found. These states account for 30% of US power sector emissions, 47% of its transportation sector emissions and 38% of emissions from buildings and factories.

          1. Jenny Tizard says:

            USA, Brazil and Australia stand out as polluters and deniers. They would like us to believe they are the norm, but it’s not true. Even within these countries there are strong and energetic campaigns to address climate change. Elsewhere, states and industries are changing fast, partly because there are big advantages to taking leadership for renewable solutions.
            We have the technologies now to make massive changes. Many are simple and basic – like bikes, trains, insulation. We need to develop a national, coherent strategy. We have some choices, our children won’t.

          2. Agreed absolutely Jenny. The situation as far as I’m aware in the USA is more complex because they have a high profile President with disastrous rhetoric about climate but also powerful technological innovations and urban and state-level action.

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