When it comes to exports, I could go on endlessly about the many fantastic reasons that Scotland is one of the world’s leading nations.
From textiles known the world over to our leading exports in the food and drink industry providing national treasures such as quality whiskies, meat, and seafood globally, we stand tall with our larger counterparts.
Alongside goods, one of our nation’s largest exports is oil and gas. So much so, we are seen as the European capital of fossil fuels. With over 2,000 supply chains specialising in everything from drilling to health and safety, the oil industry is a heavyweight for Scotland’s economy, bringing in a reported £25.2 billion back in 2022, representing over 10 per cent of Scotland’s GDP that year.
However, the future of the industry is looking potentially precarious due to the uncertain political climate – a worry for the sector, which employs tens of thousands of Scottish workers.
The Labour Party has kicked off discussions over the past few months about their plans for the oil and gas industry, which according to critics could drastically impact Scotland’s economy.
Their pledge to change how licensing works as well as plans to bolster windfall tax have been slammed, and according to energy industry body Offshore Energies UK (OEUK), would make the sector borderline ‘un-investable’, devastating workforces across the country, particularly in Aberdeen.
The uncertainty over future licensing policy, which Labour is looking to axe completely, whilst increasing taxes for oil and gas companies, seems to form part of the party’s proposed plans if they were to win a general election.
The response from OEUK to these proposed plans also claims that there could be a potential £450 billion loss in the domestic offshore energy market by 2040 without stable policies and competitive taxes.
The industry body isn’t the only critic giving this policy a drilling, with First Minister Humza Yousaf claiming that the Labour Party is ‘raiding’ the sector in Scotland, putting over 100,000 jobs at risk.
The scathing criticism came during Yousaf’s visit to Aberdeen, jumping on Keir Starmer’s U-turn on green spending, leaving energy companies high and dry for a more focused approach on renewables industries and the increase and extension of windfall tax.
Whilst the SNP and Labour are at each other’s throats, the Conservatives aren’t getting off Scot free either following the March budget announcement. Chancellor Jeremy Hunt personally admitted that the Scottish oil and gas industry is the biggest loser in his budget, due to the extension of a windfall levy on the industry’s profits, to combat high energy prices and the continued conflict within Ukraine.
This decision even saw his own colleagues north of the border left upset, with the budget making waves across all political parties in the UK, and Scottish Conservative leader Douglas Ross announcing publicly that he would not support the legislation needed to pass the extension.
But what about the base facts and figures – is the sector still in line for a prosperous future in terms of employment? Well, not according to recent analysis from New Global Witness, who cite that the rise in prosperity for renewable energy jobs has soared 70 per cent over the past decade, while the oil and gas sector saw a 36 per cent drop.
The group claims that investment into oil and gas industries no longer seems to translate into new jobs, however they highlight that there’s still over 13,000 active roles, not including offshore workers.
It’s a bit of a dizzying time as the industry is used as a political football. But with 11 per cent of our GDP coming from the sector, whatever the future looks like, be it heading towards net zero or further investment within our domestic offshore energy market, we must ensure that Scotland and its workers continue to reap the benefits to ensure our economy and employment levels remain buoyant.
Profits at Grangemouth: but still facing closure
Sometimes in this line of work, business decisions leave you baffled.
That was certainly the case last week when I learned of Grangemouth oil refinery’s £107.5m pre-tax annual profit.
The Petroineos-owned and operated plant, which is due to close by this time next year with the loss of hundreds of jobs, posted extremely healthy accounts.
Which begs the question, why shut down the operation?
Not only is it a slap in the face to workers already staring down an uncertain future, but it’s also a tough pill to swallow for the Scottish energy sector, which has certainly taken a bashing recently.
Yes, times are changing, but to close a successful operation, so swiftly and drastically, feels extremely misguided.
Record profits from Scotland’s only oil refinery surely emboldens calls for it to be saved, whether that’s by the Scottish government or a private investor.
The UK government, clearly, aren’t interested though, having invested £600m into Petroineos’ European operation in Belgium and ducking out on stumping up any cash to save the Grangemouth site.
Crucial to the stability of the entire Forth Valley and Fife area, it is staggering that we appear to be sleep-walking into a situation where the site could be no more by Spring 2025.
Decisive action needs to be taken sooner rather than later to safeguard the future of not only the plant, but a long-standing way of life in the region.
It Made Me Laugh
Gorilla comeback – but only half of him
I’ve heard of businesses having their assets stripped, but losing an 8ft gorilla was a new one for me.
I couldn’t help but have a giggle as Gary the Gorilla, a giant fiberglass statue, was returned to a garden centre in Carluke this week after he’d been stolen a year ago.
While Reynard Nursery were happy he’d been spotted on the side of the A92 in Angus and brought back into their care, they didn’t quite get back what they were expecting.
Gary had been cut in half, with only his back end making its way back to South Lanarkshire.
Unless they’re using him to advertise half-price flowers or a slash sale on compost, I fear they might struggle to find a use for their primate pal!
It Made Me Weep
Biofuel blow: Argent Energy could pull out of Scotland
Once an industry leader in biodiesel production, I was saddened this week to hear of the news that Argent Energy is in consultation to close its Newarthill site.
It would be a huge blow to the local economy in Motherwell, with the potential loss of 75 jobs, and the wider economic landscape in Scotland as a whole.
Once a giant of the industry when it opened its only Scottish site nearly 20 years ago in 2005, Argent is currently in consultation with staff on plans to end production.
I can only hope these discussions lead to a resolution which sees the business remain in Lanarkshire in some form.
