BLOG: North Sea Delays Put Scottish Investment at Risk
The UK will continue to need oil and gas as it moves towards a lower-carbon energy system. The question is how much of that energy should be produced at home and how much should come from overseas.
A new report from Offshore Energies UK says imports now meet more than 40% of UK energy demand. It estimates that the UK offshore energy industry supports around 245,000 jobs and contributes £36.7 billion to the economy each year. The industry argues that stable UK Government policy could secure further investment in domestic production and lower-carbon energy projects.
UK Government decisions on the proposed Jackdaw and Rosebank developments will provide an immediate test of its approach to domestic energy investment.
Although demand for oil and gas is expected to decline over time, the pace of that decline remains uncertain. If domestic production falls faster than demand, the gap will be filled by imports rather than eliminated altogether.
If more of the economic activity associated with meeting UK demand takes place overseas, the UK would be left more exposed to international market disruption at a time when geopolitical events continue to demonstrate the importance of resilient energy supplies.
While further domestic investment would not remove the UK’s exposure to global energy prices, it could reduce dependence on imported supplies. OEUK estimates that oil and gas still provide 75% of the UK’s total energy, while 24 million homes rely on gas for heating and hot water.
Greater import dependence would include increased reliance on liquefied natural gas (LNG) transported through international shipping routes. Recent disruption in the Strait of Hormuz, through which a significant share of global LNG trade passes, shows how geopolitical instability can restrict shipments and increase transport and insurance costs. Competition for cargoes can also intensify during periods of disruption.
These national decisions have consequences for Scotland. Thousands of companies are connected to the offshore energy sector, and the transition to a lower-carbon economy depends on retaining the businesses, workers and infrastructure capable of delivering new projects.
The workforce issue is particularly important. Research from Robert Gordon University finds that more than 90% of the skills held by the North East’s offshore energy workforce are directly transferable to renewables and related sectors. It identifies the next five years as an important window in which declining oil and gas employment must be matched by growth in renewables. That expertise cannot be taken for granted. Once skilled workers leave the industry or relocate elsewhere, rebuilding that capacity becomes increasingly difficult.
The opportunity extends beyond protecting existing jobs. A steady pipeline of projects would allow businesses to invest in new capabilities, apprenticeships and workforce development. It would also give experienced workers a clearer route into emerging industries, helping Scotland turn its current offshore expertise into a long-term competitive advantage.
Scottish Chambers of Commerce is therefore calling on the UK Government to approve Jackdaw and Rosebank without further avoidable delay and provide a stable approach to domestic energy investment. Businesses need clarity so they can recruit, train staff and commit capital with confidence. Approving these projects would help keep investment, contracts and specialist expertise in Scotland while building the capacity needed for the next phase of its energy future.
