image source, Getty Images
- Author, James Cook
- Role, Scottish editor
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When BP struck oil in the North Sea in 1970, Aberdeen struck gold.
The discovery of the giant Forties Field was the beginning of a boom that brought jobs to the city, profits to the energy giants and taxes to the treasury.
It also fueled a rise in nationalism, with the UK government privately acknowledging that oil had the potential to make an independent Scotland one of the richest countries in Europe.
But production in the North Sea peaked 25 years ago and this general election is focused on managing the transition to renewable energy, including wind, wave and solar.
The UK’s main political parties have pledged to achieve ‘net zero’, which means the country will put more greenhouse gas emissions out of the atmosphere than it puts into it.
But when it comes to the pace of change, they are pulled in different directions.
Environmentalists are calling on the UK to immediately reduce production of fossil fuels such as oil, gas and coal.
Industry leaders, unions and local officials worry about the economic impact of a rapid transition to greener energy projects.
If you stopped oil and gas immediately, says Andy Shirreffs, who works offshore, “you would bankrupt this area. This place would be devastated.”
“This is how I make a living,” he adds. “This is how I feed my children and give them an education, and if I can’t do that, then I’m in trouble.”
But are oil and gas companies in trouble?
In 2022, after global oil prices were pushed up by Russia’s invasion of Ukraine, BP earned $27.7 billion. Shell’s profits were $39.9 billion, the highest profit in its 115-year history.
Britain’s Conservative government responded with a windfall tax – a tax levied on companies that benefited from something they were not responsible for.
It pushed the overall tax rate on oil and gas production to 75%, which will remain in place until at least March 2029 if the Tories win Thursday’s election.
Labor wants to raise the rate to 78% and remove some investment tax breaks.
The Lib Dem manifesto proposes “a proper, one-off windfall tax on the super profits of oil and gas producers and traders”.
The Scottish National Party says it supports the current windfall tax rate, adding that more powers over taxation should be devolved to the Scottish Parliament.
Aberdeen and Grampian Chamber of Commerce’s Ryan Crighton says the windfall tax was meant to be a one-off but has now been extended over six years and is impacting jobs.
He is even more worried about the possible removal of tax breaks for investment, which he says would mean that companies “cannot recycle profits into new projects and create more jobs in the economy.”
The issue is a hot topic in three seats in north-east Scotland, where polls suggest the SNP will challenge the incumbent Conservatives after the boundary changes.
But policymakers also face more fundamental questions about the UK’s energy mix.
First, who owns the nation’s natural resources and who should benefit from them?
Scottish independence campaigners have long argued that the riches beneath the North Sea should be used for public, not private, gain.
They point to the example of Norway, which in 1972 set up a state-controlled company to extract its share of North Sea oil, investing the proceeds in a sovereign wealth fund.
This debate about public versus private ownership has reignited in relation to renewable energy.
In 2022, Labor promised to set up Great British Energy, a “publicly owned clean energy company”, which the party later said would operate like Sweden’s Vattenfall or Denmark’s Orsted.
But in subsequent interviews, senior Labor figures including leader Sir Keir Starmer said GB Energy “would be an investment vehicle…not an energy company”.
The unions say they would like more clarity in the plans.
Unite, which claims to have thousands of members in the offshore oil industry, refused to back Labour’s manifesto in part because of the party’s energy policy.
Last week, unions, which have previously given large sums to Labour, staged a demonstration in Aberdeen in which they were vocal in their criticism of the party.
Union members waved placards and chanted “no ban without a plan”.
“We don’t want a repeat of what happened to the miners,” said Unite organizer Claire Peden, adding: “We’re not saying any more blank checks for the Labor Party.
“If they don’t side with the workers, they don’t side with the communities, obviously the funding is going to fund campaigns like this instead of going to the party.”
Ms Peden says up to 100,000 workers could lose their jobs under Labour’s current plans, including up to 35,000 in Scotland.
Are such warnings credible?
It does matter, says Professor Paul de Leeuw, director of the Robert Gordon University of Aberdeen’s Energy Transition Institute.
He says if there is “no support for industry” with all investment immediately halted, it will have a “huge impact on jobs”.
However, Prof de Leeuw adds that this is “unlikely” because “what we hope to see is compensation from the renewables sector. One decreases, the other increases”.
“We have to get it right,” he concludes.
So another crucial question remains – should any new oil exploration be approved at all?
Conservatives say yes. Maybe the SNP and the Lib Dems. Work, no.
Some climate campaigners say this is not enough and say existing drilling licenses should also be revoked and production halted immediately.
Critics of this position argue that Britain’s economy is still deeply dependent on oil and closing the North Sea would simply force the nation to import more from abroad.
Environmentalists point out that human activity has been the main cause of climate change since the Industrial Revolution in the 18th century transformed Britain’s economy from agriculture to manufacturing.
“When fossil fuels are burned, they release carbon dioxide into the air, causing the planet to warm,” explains the Met Office.
“I feel so disappointed that there is a lack of leadership, a lack of bravery and courage,” says Alison Stuart of the Aberdeen Climate Action campaign group.
“We have to get to net zero,” he adds.
A quarter of a century on from peak production, there’s no disputing that in Aberdeen.
Where disagreements remain is the speed of this change and how it is managed.
Managing the transition looks set to be a major challenge for whoever forms the next government.
You can learn more about all parties’ policies on oil and gas and climate change at our manifesto guides.