09 January 2013

S4M-05310 Oil and Gas Sector

The Deputy Presiding Officer (Elaine Smith): The next item of business is a debate on motion S4M-05310, in the name of Fergus Ewing, on oil and gas—the success and opportunities. ...

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Stewart Stevenson (Banffshire and Buchan Coast) (SNP):

I will pick up on what my colleague just said. Banff and Buchan College, which is based in Fraserburgh and elsewhere and is part of the energy skills academy, is a welcome addition in employment and in supporting what the industry needs in the way of skills.

The energetica corridor extends from Aberdeen up to Peterhead in my constituency. It will be an important axis for the next generation of energy, just as it has been in the exploitation of oil and gas resources off our coasts over the past decades. That axis has largely insulated the north-east of Scotland from the economic downturn. If members go to Aberdeen, they will see an environment that is different from almost all the rest of Scotland, so we value the industry highly.

Hydrocarbons, about which we have been talking and of which we have many decades yet to come, are not only used to generate electricity and to power transport but are important as a chemical feedstock. One of the things that we will see over the period of our exploitation of that natural, but limited, resource is a move away from using it for transportation and generating electricity.

Patrick Harvie: Does Stewart Stevenson worry—as I do—that the MSPs who stand here to debate such issues in the 2050s will curse us for burning the hydrocarbons that they will consider too valuable to burn?

Stewart Stevenson: We must map our transition not just in Scotland but across Europe and the world. A huge economic and environmental opportunity comes from the development of carbon capture and storage not simply for us, but as an exportable technology and a technology that we can use our engineers to support.

I have discussed that subject on a couple of occasions—for example, with ministers in the Polish Government. In Poland, 90 per cent to 95 per cent of the electricity comes from coal or lignite, which is not just CO2 polluting but is hugely sulphurous. We could play a key role in helping countries such as Poland to address their issues, because their transition to a different world will be much lengthier and more difficult. That is not simply a matter of economic imperative; it also has an environmental benefit.

We have heard a bit about the need for certainty, about which I will say a few words. The chief corporate officer of Iberdrola, Keith Anderson—he also heads ScottishPower Renewables, so an intimate link across the energy sector exists—captured the issue for the industry when he said:

“Give the clarity now and let us understand the mechanism and you will see the investment come through in an orderly fashion.”

That was in the context of the Energy Bill, because the industry is uncomfortable about what it sees—it wants such certainty.

Another interesting aspect is whether the way forward depends on fracking. I particularly tak tent of Charles Hendry, who was the UK energy minister—I know that our minister knows him well. Charles Hendry pointed out that shale gas is very unlikely to play a significant role in the UK. The reasons for that are partly environmental and partly economic. Shale gas just will not make sense in the UK, so there will be a fundamental and continuing role for renewable energy and huge economic opportunities for us.

Rhoda Grant raised proper questions about the transition to an independent Scotland. I popped out of the chamber, Presiding Officer, to get the factual information that I knew that I had online. Since 1946, the UK Government has passed 23 acts of independence, so it is quite experienced in that. All the acts are short—the longest is eight pages long. The legal transfer is almost invariably expressed in the following terms:

“Subject to the provisions of this section, the existing laws shall, notwithstanding the revocation of the existing Orders or the establishment of a Republic”

I am quoting the legislation for Kiribati—

“continue in force on and after Independence Day”.

Legal certainty is available at that level.

The question was posed: what happens to contracts? It is worth saying that legislation by Parliaments trumps contracts but, in any event, contracts in the commercial world are rarely without a provision for novation, which is about the transfer of the purchaser or the supplier to another party. That applies in commercial terms.

There is no difficulty about the mechanics of the transfer. The issue is whether, post-independence, the Scottish Government would be motivated to maintain the certainty and an environment that would be internationally competitive for the investments that we need and which would enable the industry to have a long-term future with us. When we look at the economic benefits that we derive in our communities in north-east Scotland and elsewhere, beyond peradventure the answer is yes.


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