IT IS Scotland's most valuable industry, which supports 269,000 jobs across the UK.
New figures show that North Sea oil and gas production produced sales of £24.8 billion in 2018, a year-on-year increase of 30.1%.
Since oil was struck in 1969, the North Sea was found to have the largest oil resources in the European Union.
But all that has to change over the next 25 years if an influential think tank's £170bn green new deal plan is sanctioned.
The Common Weal says oil and gas extraction should be phased out and be replaced by a raft of low-carbon initiatives aimed at tackling climate change.
The Common Weal's most costly suggestion in its Common Home Plan, which was unveiled yesterday, is a £50bn scheme to build a low-carbon district heating scheme, connected to every house on the gas grid where technically possible, and power it with large-scale renewable heat generation.
District heating is the supply of heating and hot water to multiple buildings from a centralised generation source, through insulated underground pipes. This system is widely developed in the Nordic countries, but less so in the UK, and reduces the carbon emissions produced in supplying heat to homes.
In what the influential think tank says is the world's first comprehensive and costed proposal for how to implement a green new deal, it suggests taking all energy into public ownership, and moving to the production of hydrogen, seen as a versatile fuel capable of powering everything from household appliances to transport to industrial processes.
The Common Weal suggests spending £45bn to replace all non-renewable electricity generation with the help of a national energy company, upgrade the grid and build low carbon electrolysis plants in which 800,000 tonnes of hydrogen are used as fuel.
When hydrogen is burned with oxygen using renewable energy it is entirely emissions free.
In addition, the report calls for the biggest overhaul of housing since the Second World War, with a plan to have greener homes by installing loft installation, double glazing and renewable technologies.
That would involve setting up a national housing company and spend £40 billion to make every home in Scotland more thermally efficient, saving 40% off heating bills.
But The Herald on Sunday can reveal it is all at the expense of an industry that the Scottish nationalists have fought over for decades.
Its value to the nation was recognised by the SNP when "it's Scotland's oil" was a widely publicised political slogan during the 1970s in making their economic case for independence.
The SNP campaigned widely with this slogan for the UK General Elections of February and October 1974.
But the report by the Common Weal says: "By the end of the 25 years of the Common Home Plan, Scotland must have stopped extracting oil and gas from its North Sea.
"To enable this transition the National Energy Company should do everything possible to build up domestic supply chains to create industries and jobs to replace those already being lost in the oil and gas sectors.
"Many of the supply chains for the oil industry can be redirected to provide the materials required for the roll-out of district heating."
The Common Weal says that most of the work requires "collective public action" and will only need to be done once so should be financed through public borrowing. It says the infrastructure built will "future-proof" Scotland for many generations, so the report proposes that the borrowing be paid off over 50 years.
The annual cost of repaying this will be around £5bn, but the think tank estimates it will bring in £4bn in tax revenue.
"Crucially, this proposal will require no additional private spending by individuals to achieve a carbon-neutral Scotland so there are no hidden or extra costs which will be borne by households," says the Common Weal.
The think tank report says that while transport technologies are still developing, Scotland should immediately spend £3 billion on a
national recharging and refuelling stations and be ready to spend at least £10bn on the transition to zero-carbon transport over the 25 years.
It suggests a radical reform of land ownership, by reforesting 50 per cent of Scotland, training 20,000 expert land managers and implementing a rural industrial strategy to build a large light engineering sector located where energy and wood crops are available.
The Common Weal believes it will require independence to implement the plan, but that measures would be necessary whatever Scotland's constitutional outcome.
Commenting on the launch of the plan in Glasgow, Common Weal director Robin McAlpine said: “Producing this has been an enormous amount of work, but the threats we face are so great that an enormous amount of work is needed.
"We all need to be clear that this is in large part a major engineering project and until it or something very similar to it is complete, Scotland will continue to contribute to environmental decline.
"And this will take time and so the longer before we start, the longer until we stop doing harm. The urgency is clear and the time for targets passed a long time ago. Scotland needs a plan.”
Oil and Gas UK chief executive Deirdre Michie insisted earlier this week that the industry can help tackle climate change but admitted it needs to clean up its act in the North Sea.
The industry body has set out a clear plan for how oil and gas firms could help in the effort to reduce carbon emissions to zero, net of amounts absorbed, in its Roadmap 2035 report.
The body's upstream policy director Mike Tholen said of the Common Weal report: “The independent Committee on Climate Change report forecasts oil and gas demand will continue for decades to come, to around a third of what it is today by 2050.
"With world-class energy expertise, skills and capabilities, our Roadmap 2035 sets out how Scotland can pioneer an inclusive and fair transition which meets net-zero, secures a diverse energy mix and protects affordability. We hope Common Weal and others will reach out to this important industry at a critical time in the transition.”
The Oil and Gas UK strategy will involve helping maximise the potential of new energy sources and carbon capture technology while reducing the emissions associated with the production of the oil and gas that will be needed to support the economy.
Energy UK, the trade association for the British energy industry with a membership of more 100 suppliers, including Shell, British Gas and EDF Energy, declined to comment on the findings.
A Scottish Government spokesman said: “We are committed to achieving a net-zero emissions economy and managing this fairly, and we expect companies engaged in oil and gas exploration and production in the North Sea to work towards a sustainable, secure and inclusive energy transition.
“As we make the much-needed transition to a net-zero economy, maintaining production will help ensure domestic production can meet ongoing demand in Scotland as well as meeting most of the UK’s needs. The Intergovernmental Panel on Climate Change (IPCC) Special Report recognises that both oil and natural gas will continue to play a significant role in the global energy mix to 2050.
“North Sea production is highly regulated, with some of the most advanced and comparatively least-polluting production methods in the world, and maintaining domestic oil and gas production can lead to lower net global emissions. We are supportive of the sector’s plans to decarbonise oil and gas production itself as well as to engage the sector in embracing and leading deployment of technologies such as floating offshore wind, hydrogen production and carbon capture, utilisation and storage.”
Source: The Herald
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