Aberdeen is oil and gas city. The oil capital of Europe. Since the advent of oil extraction in the North Sea more than 60 years ago we’ve become experts at extracting it as cheaply and efficiently as possible. And, at least since the Piper Alpha disaster and the Cullen report, as safely as possible.
Our local economy runs on oil. Some 12-17% of people in our city are directly employed in oil and gas. For comparison, about 2.5% of the Grangemouth population are employed in the refinery, 6% of those in Port Talbot were employed in the steelworks and 3.3% of Scunthorpe work in their steelworks.
As a result of this, house prices in Aberdeen rise and fall with the price of Brent Crude. The local hospitality industry’s fortunes depend on where we are in the oil and gas cycle. Many people remember the exodus of Americans from Aberdeen in the 80s when the industry tanked and there were mass lay-offs.
The remainder of those working in oil and gas are all over these islands. People (mostly men) who work offshore come to Aberdeen from across Scotland, and from the North of England to board helicopters for their three weeks offshore. So, though this is a problem that’s highly concentrated in Aberdeen, the loss of oil and gas jobs will hit every part of the UK.
The Committee on Climate Change’s 7th carbon budget said “as of 2021, direct employment in oil and gas in Aberdeen has declined by nearly one-third since 2014. Household disposable income has fallen and poverty has increased. Some estimates indicate that around 14,000 people in the region will need to have moved to other roles or sectors between 2022 and 2030.”
I’m sure there are many arguments to be made about the lack of diversification in our local economy and the fact that over-reliance on one industry can be problematic. A system with a single point of failure is not a resilient system. However, we are where we are and we cannot go back to fix the mistakes of the past.
What we can do is ensure the brightest possible future. Unfortunately, I’m more worried than ever before at the direction of travel. Paul de Leeuw from Robert Gordon University (RGU) who studies the energy transition told me the “urgency has shifted dramatically”.
With the ongoing winding down of oil and gas, and the much slower than expected pick up in offshore renewable jobs, we are staring down the barrel of a loaded gun unless the UK Government takes action, and very soon. I’m not asking them to go back on any election commitments. But when the facts change, we must change tack. With the ongoing war in Ukraine impacting Europe’s gas supplies, with no gas storage to speak of in the UK and imports from the US and Norway dominating, global uncertainty caused by President Trump’s tariff announcements have fundamentally changed the game. The lack of progress in building renewables has meant the jobs simply aren’t there for oil and gas workers to transfer into.
We need to remember that these (mostly) guys are highly mobile. They’re used to working in the Middle East or the US for months at a time. They will simply move abroad for work. Aberdeen and Grampian Chamber of Commerce’s Energy Transition 40 report published last year shows this talent drain is already happening. If we lose too many of these highly skilled workers, who also pay significant levels of tax, we won’t be able to either pay for or staff the renewable-powered future we need.
I’m so frustrated by this. Nobody in the UK Government seems to be in charge of ensuring a just and managed transition away from oil and gas to renewables. Renewable projects are held up by failures in consenting processes and by the lack of grid connections. If the Westminster Government wants to grow the economy, they must close this gap and either speed up renewable projects or slow fossil fuel decline until the jobs of the future become the jobs of today.
The UK Government is failing to manage transition away from oil and gas to renewables – this will hurt growth and cost jobs
