S4M-12587 Oil and Gas Sector (Support)

The Presiding Officer (Tricia Marwick): The next item of business is a debate on motion S4M-12587, in the name of John Swinney, on action that is needed to support the oil and gas sector.

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

The debate has been interesting and there has been some measure of agreement.

I will start by offering a slight olive branch to Patrick Harvie. It is quite clear that crude oil has been vital for transport for the past 100 years, but it is equally clear that in well under the next 100 years we will have—because we will have had to—weaned ourselves off crude oil playing that particular role. However, oil will remain of substantial commercial value; it will remain central to developed economies around the world, not as a fuel for transport but as a chemical feedstock. The progress that we have made in trying to replace crude oil as a chemical feedstock is substantially less than the progress that we have made in replacing it in transport.

Patrick Harvie: Stewart Stevenson makes a very fair point. We have made a lot less progress than we need to in replacing hydrocarbons for those other uses. Is he really suggesting that although the already-high prices that are being spent on extracting ever harder to reach oil will be viable once fuel is no longer a legitimate use for those substances?

Stewart Stevenson: That will play out however it plays out. The balance of my view is that the price of oil will continue to rise and that we will continue to find that it is, for some time to come, the most economic solution to many of our needs. We will have to divert investment into finding out how to replace oil as feedstock, but it will take a long time.

Some technological things will happen that will help all that. One is that communications will improve. We will have videoconferencing via hologram that will, essentially, be just like sitting in the same room as the other people. We will travel less for fewer purposes. Yes—we have to reduce our consumption of non-renewable material, but we will find that technology will help us do that.

It is not easy to look forward. Churchill said—I do not think that he was the first person to say it—that prediction is difficult, especially about the future. We certainly know that there will be a $100 barrel price in the future. We certainly expect that there will be a $200 barrel price in the future and we should not be surprised by a $300 barrel price in the future. However, nobody here can tell us with any certainty when any of those things will happen. If I could work out when, I would end up a very wealthy man indeed.

The uncertainty is not so much in the pricing as in the timing. That is precisely why in what one might term the economically good times in the oil industry we must store up the nuts to feed us through the bad times. That is what works. It is worth saying that the proportion of Norway’s gross domestic product that is down to the industry is more than two and a half times that of Scotland. They are very different and yet, in respect of the pain that Norway is experiencing now, it is able to ride over the difficulties because it has stored away the nuts in the appropriate way, as a squirrel would to prepare for winter.

Michael McMahon quite properly highlighted the dangers of over-reliance on one industry and, indeed, the first law of epigenetics is that the more highly optimised an organism is for one environment, the more adversely it will be affected by a change in that environment. There is an intrinsic value in diversity rather than specialism, although specialism gives great short-term benefits.

Mr McMahon spoiled his speech a bit by saying that Norway has no motorway system. He obviously has not been there. Yes, that is true, but they have the most wonderful ferry system and the most wonderful network of regional airports that get people around. That is related to the geography of Norway, which I know very well because my niece stayed in Norway for many years.

The real legacy of oil is not the black stuff that comes out of the ground: some 50 per cent of the value that we get from the industry involves exports not of oil, but of skills and talent. The reservoir of skills in our communities in Scotland, the north of England and beyond is substantial. The N-56 report suggests that Brazil will be spending £250 billion on the industry over the four years from 2013 to 2017, and a report from Scottish Development International this month says that Scotland is widely admired around the world for its expertise.

The resilience that we have heard about is about controlling the nuts that we put aside in the good times. The trouble is that Lewis Macdonald confirmed that oil would not be paying for the resilience fund, even though it is precisely the thing that should be.

Before I talk about engineers, I should declare my membership of the Institution of Engineering and Technology. We have huge talent and skills here, but we do not recognise them properly in a professional way. The Germans elevate engineers to a much higher social standing and give them much more academic support. We probably have to do the same. Our engineers can develop oil elsewhere and can become engaged with offshore construction for wind and tidal energy and in engineering projects in general, such as those involving the extraction of water, which will become increasingly important. We have the skills and the talent. Half of the value of our industry is being drawn from offshore to onshore. The issue now lies in our people, and we must ensure that we support them.

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