How Scotland Is Juggling Oil And Gas And Jobs In Their Transition To Renewables

A global transition from fossil fuels to renewable energies is underway, driven by one statistic: fossil fuels provide 83% of the world’s energy and about 73% of the world’s greenhouse gases (GHG). These gases cause global warming, in the opinion of most climate scientists, and the global temperature has increased by over 1 Celsius degree since 1850.

Like an S-shaped curve, the transition began slowly at first but has increased more rapidly in the years after the Paris agreement in 2015. And the tension between fossil and renewable energies has increased too. How much should we invest in renewables year-by-year? How quickly does the world have to cut back its fossil energies? What about jobs that could be lost from the fossil fuel industry? Can they be upskilled into the renewables industry?

Scotland is a small country that has made significant advances in their transition to renewables, and they are summarized here:

· The country has benefited from an oil and gas industry that created half a million jobs and enormous national wealth. 75% of energy consumption was from oil and gas in 2019. But oil and gas production in the whole of the UK peaked over 20 years ago, and has been on a serious decline. Now they import oil and gas from other countries, including Russia.

· Coal and nuclear power are winding down.

· To illustrate the balance of power (electricity) in Scotland: wind provides 41%, nuclear 33%, natural gas 14%, hydro 8%, bioenergy and waste 1.4% and solar 1.2%. Just 1.1% is imported.

· Mindful of the rising cost of oil and gas and gasoline as well as a need to reign in GHG, Scotland is faced with two choices: to accelerate renewable energies, or to boost oil and gas but impose tough regulations on emissions of GHG.

· Offshore wind energy is a promising alternative energy on the upswing in Scotland. Since a leasing round in January, 17 new projects are on the books at an average cost of roughly $2 billion each, and at full capacity these could provide 85% of energy for all homes in the UK.

Training for jobs.

Scotland has also learned useful things about workers and jobs. Oil and gas students at colleges in Scotland are split in their view of the future. One student from India pins his hopes on an oil and gas industry that will survive well into the future – especially in places like southeast Asia or Africa.

One student from Nigeria aims to work for a major oil company by reasoning that power plants will have to rely on natural gas that will generate electricity for decades. But she is confident, if that doesn’t work out, that her skills will transfer to work on renewable energies such as offshore wind.

Offshore wind projects in Scotland will need workers. One engineer worked in oil and gas for 11 years before becoming a project manager for an offshore wind farm. Much of his previous experience was transferable.

But he cautioned that green jobs won’t replace all of the usual oil and gas jobs. In Scotland there were 4,700 full-time jobs in offshore wind in 2019 in contrast to 86,000 jobs in oil and gas.

He said it costs about $3 billion to build an offshore oil and gas platform and about the same to build an offshore wind farm. But the big difference is that, once built, you need 100 workers to maintain the oil and gas platform versus zero workers on the wind farm.

A clear message here is to give a lot of attention to workers as they are retrained or upskilled. Another small European country, Denmark, has already stopped exploring for more oil and gas. The country will also stop all production of oil and gas from the North Sea by 2050. They anticipate placing their oil and gas workers in green energy fields such as offshore wind or carbon capture and storage.

Other transition tensions.

The S-shaped curve describing the transition to renewables has recently had three nasty hiccups. First, the Covid pandemic struck, and less fossil fuels were needed. Oil and gas wells were shut in. Rusty refineries closed. And the price of a barrel of oil actually dropped to zero. One side of the argument was that this would lower greenhouse emissions from fossil fuels, which would assist the transition to renewables.

Second, the world recovered from the pandemic, industry powered up, workers drove their cars to work again, and travelers visited national parks they had never even heard of. A shortage of oil and gas ensued and a barrel of oil headed up toward $100.

Third, Russia attacked Ukraine and other parts of the world, including the EU, UK and US, decided to stop importing Russian oil and gas. The uncertainties of war amplified fear of the future, and the price of oil exceeded $100/barrel. Now the other side of the argument appeared – the world needs to drill more and produce more oil and gas to lower gasoline price at the pumps, and to heck with the greenhouse gases for now.

This emphasizes the tension between energy security and the climate crisis. Although a huge subject all by itself, one recent bit of news may ameliorate the climate crisis, at least for extreme weather events. A new book has argued persuasively that global data on extreme weather events like droughts, wildfires, super-storms, and hurricanes have not worsened in the past 50 years, when the global temperature has warmed by 0.75C. This weakens the argument that these extreme events will get a lot worse over the next 50 years unless we restrict global temperatures from rising another 0.25C.