Case for oil & gas has SNP over a barrel – Daily Business Magazine

Softening attitudes to fossil fuels could ease tensions in the energy industry, writes TERRY MURDEN

Norwegian energy company Equinor has done what was asked of it by declaring how much CO2 will be pumped into the atmosphere if it extracts 300 million barrels of oil from the Rosebank oil field in the North Sea. It says the emission levels are “not significant” considering the UK’s international climate commitments.

Now it needs more friends in government to enable it, and its British partner Ithaca Energy, to start pumping out the black stuff, and there are hints that it could be winning the argument.

The SNP is said to wobbling over its previously hardline opposition, and while the devolved government has no formal role in applications, its position is important in swaying wider opinion.

The party’s official policy is that “in order to support the fastest possible and most effective just transition [to clean energy], there should be a presumption against new exploration for oil and gas”, a declaration that has galvanised its anti-carbon wing and the green lobby.

When asked last week to comment on the future of Rosebank, a Scottish government spokesperson said it was a matter for the UK government. This, according to one media report, “suggested” it was now neutral on supporting the huge resource, about 80 miles west of Shetland.

But has there really been a shift in the SNP’s position? There is a bit of a gap between confirming and suggesting and First Minister John Swinney subsequently gave no indication of a change of policy when he was later asked to comment. Short of saying this looked like a story angled to fit a headline, he said that it was the long-standing position of the SNP that it was indeed a decision for the UK government to make.

Nonetheless, SNP critics leapt on the statement to claim that the absence of outright opposition to Rosebank meant the party leadership had u-turned, or at the very least softened its opposition to oil and gas from the uncompromising approach laid down by Swinney’s predecessors Nicola Sturgeon and Humza Yousaf.

Sturgeon, of course, used the COP climate summit in Glasgow to promote her green credentials including a series of photo opportunities with activists, such as Greta Thunberg. The former First Minister took a vigorous stance against the Cambo field and described Rosebank as an “act of environmental vandalism”. Yousaf, her successor, claimed that allowing it to proceed would be the “wrong” decision.

Much oil has flowed since the “presumption against” diktat was declared, including the significance of energy security in light of the Ukraine war. The fossil fuel lobby is not alone in doubling down on its demands for an end to the binary debate over energy policy. Juergen Maier, the chair of renewables vehicle GB Energy, has warned that jobs in the oil and gas sector are being lost too quickly.

The arguments for continuing to support the oil and gas sector alongside renewables are becoming stronger, and the impact of not doing so is seen as increasingly disastrous. Running down the industry is a self-inflicted wound that will leave the UK exposed to imported fuel while having abundant supplies off its own coastline.

This has not escaped the notice of the SNP leadership and in an election year the party has much to lose by distancing itself from an industry it once flagged as key to its independence campaign.

A more conciliatory approach towards oil and gas is the talk of Westminster as the stark realities of abandoning the industry kick in from both an energy and financial point of view. Reform of the windfall tax, properly known as the energy profits levy, is expected in the budget in response to industry arguments that it is doing more harm than good by denying energy companies the funds they need to invest in the transition.

Legitimate questions are now being asked about whether Rosebank is exempt from the SNP’s edict given that Equinor is seeking to develop a field that has already been explored. That would allow the SNP to offer its support and simultaneously claim it was sticking to its policy of demanding oil companies provide an environmental case to support their activities. Equinor may have just passed the test.

Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business

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