North east Scotland's oil and gas legacy paves the way for significant growth in energy transition activity and a net-zero carbon energy future.
Writing in The Herald newspaper on 8 October 2020, Opportunity North East's chair Sir Ian Wood KT GBE made the case for Scotland being a global leader in the era of sustainable energy. Read his full article below.
Celebrating a landmark golden anniversary is a chance to reflect on past achievements and look forward to an exciting energy future. It was 50 years ago this month that BP discovered the giant Forties Field a pivotal moment in the development of the North Sea industry that secured Britain’s energy supply and heralded Aberdeen’s emergence as a global oil and gas capital.
Half a century on and both the North East and BP find themselves at a similar turning point. Against a backdrop of climate change and shifting societal expectations, BP’s CEO Bernard Looney has revealed an ambitious new renewables and low carbon strategy.
As a country and a region, we have benefited hugely from oil and gas over the years and emerged as a world-class player. But we have to adapt and our industry is not new to transforming itself.
Back in the 1970s, frontier technology for extracting hydrocarbons from the world’s most hostile environments was developed in Scotland. We created a superb supply chain which now supports 300,000 jobs in the UK.
This proud legacy gives us incredible competitive advantages today in terms of world-leading expertise, technological innovation and infrastructure to adapt to the integrated energy future. If we harness it, we will position Aberdeen as a global energy capital for the net zero era.
Transitioning successfully requires us to double down on our efforts and investment in three key areas: We must maximise our low carbon oil and gas recovery from the North Sea; accelerate the development of renewables and other clean energy; and capitalise on the agility of our existing energy supply chain by diversifying and creating new jobs.
After all, the energy sector provides the opportunity to contribute £2.5 trillion to the UK economy and create over 200,000 new jobs, thousands of which will be based in Scotland.
Oil and gas, with a lower carbon footprint, still has a vital role during the energy transition period as we work towards the integrated energy systems of the future. Far from stigmatising the hydrocarbon industry, we must help it decarbonise its operations and find ways to capture and store carbon. We must maintain our energy security.
But as North Sea oil and gas production inevitably declines in the mix over the next 30-40 years our emerging global energy cluster will be strengthened by lower carbon options including offshore wind; hydrogen; and carbon capture usage and storage.
The UK is already a world leader in offshore wind accounting for a third of the world’s total offshore wind generating capacity and there is potential to increase capacity by a multiple of seven over the next decade, much of this in Scotland. As these sites go into deeper waters, we move to floating wind structures and the oil and gas expertise in underwater engineering comes into its own.
Furthermore, significant hydrogen activity is underway. The Acorn project at St Fergus Gas Terminal near Peterhead for example, will deliver blue hydrogen production by 2025, and ERM has chosen Aberdeen to base its world-first Dolphyn green hydrogen project.
North East Scotland is blessed with incredible natural assets, as well as the offshore expertise developed by decades of oil and gas activity. However, we also need the right onshore resources to service the low carbon energy activity.
The proposed Energy Transition Zone (ETZ) in Aberdeen will provide the infrastructure to support this. It will become home to leading-edge innovation and manufacturing – a centre of excellence for offshore wind, hydrogen and CCUS activities.
The ETZ will help the region to become a global leader in energy transition activities, creating the environment for the energy supply chain to diversify into new markets at home and abroad.
As I look ahead to the next 50 years, I can see Aberdeen and Scotland as a global leader in the energy transition, the green recovery and the sustainable energy era that follows.
We will achieve this by leveraging our vast potential in net zero carbon: repurposing our energy infrastructure; developing a strong and competitive energy transition supply chain and expert workforce; and investing with focus and pace.
In doing so, the “oil capital” will fast become a global integrated energy hub to the benefit of the people, the economy, the supply chain and ultimately the climate.
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