S5M-02310 Oil and Gas Sector Co-investment

The Deputy Presiding Officer (Linda Fabiani): The next item of business is a members’ business debate on motion S5M-02310, in the name of Lewis Macdonald, on co-investment in the United Kingdom oil and gas sector. The debate will be concluded without any question being put.

Motion debated,
That the Parliament understands that the number of jobs lost as a result of the downturn in the UK oil and gas sector could be over 120,000 by the end of 2016; considers that the sector is of vital economic interest and cannot be left exclusively to market forces; further considers that the sector needs to have confidence that it can invest for the future; supports the use of Scottish and UK Government borrowing powers to leverage money into the sector, including active consideration of strategic public stakes in infrastructure investment, and notes calls on the Scottish Government to facilitate and take part in discussions with the UK Government, industry and trade unions to create a plan for co-investment that will support jobs, including in the north east, increase confidence and create returns to the public sector.

12:51
... ... ...
13:02 

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

I join others in thanking Lewis Macdonald for the opportunity to discuss this important topic. My constituency has the world’s largest offshore oil support base and includes St Fergus gas terminal, so the issues are significant to it. Unemployment there, which has historically been low, has risen significantly because of the downturn in the industry. We are still in a much better place than much of Scotland is, but we should not discount the fact that the people who have lost their jobs are often higher earners, so there is a disproportionate effect on the economy as a whole. I have no difficulty in subscribing to all the words that Lewis Macdonald incorporated in his motion.

The prices of oil and gas are not determined simply by economic factors; they are also determined by macro political factors on the world stage. We know that the price of oil was driven down because of choices that were made in other countries to up production. Some sanity has returned to the market, which has made a small contribution.

The industry grew from very small beginnings, and a national concern originally played an important part: some of us remember Britoil, and we remember who sold it off to BP many decades ago. There is of course a role for the state in supporting the broader energy sector, of which oil and gas is the major part in the north-east.

In my constituency, we are feeling a bit put out—I put it no more strongly than that. That is because we have lost many of the opportunities of diversification, having built up a huge body of people with skills that can be applied in other sectors of the energy industry—in particular, in offshore energy, which over time will become more and more important, and carbon capture and storage, at Peterhead and at the north of England plant that was also in the CCS commercialisation competition. It is important that the state plays a role in ensuring that we can continue to exploit the skills and knowledge of the people who have been working in our oil and gas industry.

In the short term, it is very welcome that the University of Aberdeen has identified formations that have not previously been exploited, around Rockall, for example. People in the oil and gas industry have a saying: “How do you strike oil? Drill lots of dry wells.” Around Rockall, there has not been enough activity, because our previous understanding of the geology did not sustain it. The change in that regard might assist the industry more broadly.

In the sectors that are mature, as the price of oil creeps upwards again, increasing efficiency and exploitation of existing infrastructure create significant opportunities for us to have a profitable and long-term sustainable industry. There is a 40 or 50-year future for our North Sea oil industry, and youngsters should be encouraged to acquire the engineering skills that they will need if they are to go into the industry.

We must also consider the broader issue of energy security. There is an intrinsic value in having energy that we in the UK and Scotland can control, because that detaches us, to some extent, from the vagaries of international decisions and international energy markets.

There is room for a variety of ways forward. There will be heavy reliance on the private sector, but there is also a role for the Scottish and UK Governments, which I hope they will discharge with diligence and appropriate decision making.

13:07