Scotland: Economic Recovery and Renewal — House of Lords, 2021-12-09
Topic: Energy
Alastair Robertson Goodlad (Conservative, Centre-right): My Lords, I congratulate my noble friend Lady Fraser on securing this debate and on her admirable analysis of Scotland’s contribution to economic recovery and its effect on the well-being and quality of life across the United Kingdom. It is a great pleasure to follow the noble Lord, Lord Foulkes, who spoke as always with knowledge and authority I speak as someone of Shetland parentage, like my noble friend Lord Lamont, and much of what I have to say relates to Shetland. I wish first to deal with the Cambo oilfield, north-west of the Shetlands, which Shell recently announced it is pulling out of. The project is currently awaiting the green light from the Government’s Oil and Gas Authority, which I hope will be forthcoming. I hope that the authority will bear in mind the words of the Shell spokesman when announcing the Cambo decision: "continued investment in oil and gas in the UK remains critical to the country’s energy security. We believe the North Sea and Shell in it has a critical role to play in the UK’s energy mix, supporting the jobs and skills to enable a smooth transition to Britain’s low carbon future." While we move towards net zero, it is worth remembering that 75% of the UK’s total energy needs are met by oil and gas. As my noble friend Lord Callanan reminded your Lordships last Thursday, oil and gas are still essential for our energy needs, are vital to the production of many everyday essentials such as medicines, plastics, cosmetics and household appliances, and they will remain so in declining amounts, even in a net-zero world. As he rightly pointed out, the choice we face is whether we wish to use oil produced domestically or to import it Opponents of the development of the Cambo field might reflect on the desirability of replacing publicly listed companies—accountable to shareholders and regulators and beholden to disclosure requirements—with private equity capital, which does not have such obligations. Cambo is majority-owned by Siccar Point Energy, which is backed by private equity. There are many eager private investors in fossil fuels. According to the Private Equity Stakeholder project, over $1 trillion has been invested in the energy sector since 2010, and only 12% of that in renewable energy projects. Opponents of Cambo should perhaps beware of what they wish for Siccar Point has said that the Cambo project would create over 1,000 direct jobs and thousands more in the supply chain. This is obviously of relevance to Shetland, which has a population of just over 23,000. The west of Shetland province has been identified as an important location for future offshore oil production. In 2019, McKinsey consultants projected that by 2025 the west of Shetland province would contribute around 30% of UK continental shelf production, up from 2% in 2014. The report said that these estimates could rise further if break-even levels fall as the price of oil rises—it is currently predicted by JP Morgan to rise to $150 a barrel—bringing into production a potential 3 billion barrels of oil: equivalent to the province’s previously unsanctioned reserves. The Oil and Gas Authority suggests that around a quarter of all upstream production and operations jobs in the UK continental shelf—about 67,000 jobs—may be centred on the west of Shetland by 2025. The country as well as the industry has a clear incentive to support production to the west of Shetland Other industries important to Shetland are aquaculture and fishing, which account for nearly 40% of Shetland’s exports. One-fifth of all fin-fish landed in Scotland and about one-sixth of that landed in the UK are landed in Shetland. More fish and shellfish are landed in Shetland than in any other port in the UK except Peterhead. The weight of fin-fish landed in Shetland in 2020, at 51,000 tonnes, was almost as much as the total landed in England, Wales and Northern Ireland—52,700 tonnes—and was greater than that landed in all of England and Wales: 40,800 tonnes. Perhaps my noble friend when he comes to reply might indicate what the implications of the post-Brexit negotiations are for Shetland’s fishing industry Other important developments include the Shetland Space Centre on Unst. Following the Government’s approval for Lockheed Martin to transfer its satellite launch operations, the space centre estimates that by 2024 the spaceport could support a total of 600 jobs in Scotland, including 140 on Unst and 210 across Shetland. Although there has never been a whisky distillery in Shetland, there is now a gin distillery on Unst, which in addition to juniper relies on local seaweed for a flavour which I hope your Lordships would find most palatable Tourism is of increasing importance to Shetland. In years gone by, only birdwatchers and archaeologists made the journey. Now visitors include ecotourists, gastronomes and fishermen—the trout fishing is exceptional, the local rule being that if the fish are unco-operative, you change not your fly but your loch. I believe my late father’s record of a 20-pound sea trout caught in Tingwall Loch still stands. I hope the pandemic will subside soon enough for the cruise ships to return, bringing as they do welcome tourists to Jarlshof, Eshaness and some of the most beautiful countryside in the world On 9 September 2020, the Shetland Islands Council voted in favour of a Motion that "The Shetland Islands Council formally begins exploring options for achieving financial and political self-determination." It is easy to understand why it did so. Let us hope that the council’s Motion has been noted in Edinburgh, which I very much doubt. However, I am confident that it will have been noted in London. Whatever future governance arrangements eventuate, Shetland will continue to contribute, as it always has in peace and war, to economic recovery and the well-being and quality of life of what I hope will remain the United Kingdom.