MY RECENT visit to Shetland confirmed what an exceptional place it is, and not just because of the dramatic landscapes and warm hospitality that draw most people to the islands.
Shetland is also remarkable as a microcosm for an industrial transition that’s playing out across the UK and the globe—a place where, on a drive around the island, you can see 50-metre wind turbine blades being unloaded from cargo ships, as well as the platform at the UK’s largest oil field – Clair – less than 50 miles west of Eshaness.
Despite the abundance of energy in and around Shetland, it is also a stark example of how our current energy system is failing us.
The exceptionally high level of fuel poverty in Shetland this winter, driven by household energy bills that are around double that in other parts of the UK, is hard to reconcile with the islands’ role as a major hub for energy production.
This has been a key revelation of the last year: no matter how much oil and gas we produce in the UK, it won’t make a difference to the price we pay for it which is set by global markets. Nor can we count on it to meet our energy needs: oil and gas extracted in the UK is owned by private companies who sell their product to the highest international bidder.
Combined with the limited nature of our storage and refinery capacity, this means 80 per cent of the UK’s oil and half of our gas is exported.
Just last month, gas was diverted from Mossmorran to mainland Europe where sellers received a better price, leaving off-grid gas users in Scotland with even higher bills.
Given that the vast majority of what’s left in our waters is oil, most of what’s produced will be destined for other countries. And with gas prices projected to stay much higher than pre-2021 levels for years to come, energy bills will stay unaffordable for millions of people across the UK.
That’s why the race is now on to transition as quickly as possible away from oil and gas to renewable energy sources that are many times cheaper than gas as a source of electricity.
The US recently announced a multi-billion pound investment in green industries, the Chinese government is spending 11 times as much on renewables as it is on coal, and the EU is preparing a green investment plan to match the US. Already, Poland installs three times as many heat pumps as the UK.
As the head of the International Energy Agency stated, the global response to Russia’s war against Ukraine has led to a “historic turning point towards a cleaner, more affordable and more secure energy future”.
This puts Shetland and the UK in the middle of a global race for skills, supply chains and capital that Shetland is ideally positioned to benefit from. Its exceptional wind resources, ports and highly skilled workforce should put it at the forefront of a low-carbon economy in the UK that grew by 30 per cent last year.
To ensure that communities get a fair share of the wealth on offer and secure sustainable jobs, there must be proper government investment in and support for domestic renewables production and manufacturing; agreements in place so that local communities retain profits; and re-training programmes for the workforce that are designed around their needs so that they aren’t paying a price to transition.
The recent announcement of the Islands Growth Deal is a positive sign that that investment is on its way.
Little benefit from developing new oil fields
This is not the time to turn our back on these immense opportunities by continuing to pursue new oil and gas production, which will do little to benefit UK energy security but will send out a signal that the UK is not in the market to transition/is unserious about transitioning away from fossil fuels.
While the North Sea has done much to meet domestic energy demand in the past, the proposed Rosebank oil field to the west of Shetland is a perfect example of how little future public benefit a new oil and gas field will bring.
Ninety per cent of its reserves are oil and despite 80 per cent of this heading overseas, most of the costs of developing the field will effectively be borne by UK taxpayers. Thanks to a new oil and gas investment subsidy, Rosebank’s owners, including Norwegian-state backed Equinor, will receive a £500 million tax break from developing the field.
Further, its environmental consequences are immense: burning all 495 million barrels of the reserves targeted by the project would result in carbon emissions that are equivalent to the annual emissions of world’s 28 lowest income countries. It would also involve placement of a gas pipeline through the protected Faroe-Shetland Sponge Belt.
We’re told by the industry that it makes more environmental sense for the UK to produce oil and gas than other producers, but UK oil and gas production is in the bottom half of the global league table in terms of the cleanliness of production according to an emissions monitoring report by the North Sea Transition Authority. And the industry is off track to meet its own, weak emissions reduction targets for 2030.
The notion that eliminating oil and gas production in the UK will just lead to it being “substituted” by dirtier oil and gas produced elsewhere is untenable as a matter of economics and is an argument that has been rejected by experts and the courts alike.
It also overlooks the fact that we are now in a global transition away from oil and gas, with new initiatives emerging like the Beyond Oil and Gas Alliance led by countries like Denmark.
It’s extremely concerning that Rosebank, the largest undeveloped field in the UK, is being considered for approval after the Intergovernmental Panel on Climate Change has said that existing fossil fuel infrastructure is sufficient to take us past the critical threshold of 1.5°C of warming. Given the climate chaos that we are already seeing at 1°C of warming, we should be deeply wary of making any further gambles with our climate.
Even if we weren’t in the middle of a global energy transition that’s gathering pace every day, there is a powerful moral imperative for the UK to show leadership in the shift away from fossil fuels.
If we fail to do so, we will not only leave local communities behind; we will also fail future generations and the millions of people living with the reality of the climate crisis.
Rather than resist change, we should embrace a rare and potentially fleeting opportunity to lead that change instead.
Tessa Khan is an international climate change and human rights lawyer, and the founder of the think tank Uplift which campaigns against the exploration of new oil and gas.
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