Pete Cannell and Brian Parkin discuss how the oil price crisis is leading to tens of thousands of jobs losses in Scotland, and what we could do about it
For all the rhetoric of COP21, Cameron’s government is increasing support for carbon based energy supply and pushing back the limited progress that has been made on renewables. But to restrict global temperature rise to less than 2 degrees Centigrade requires action now.
In Scotland we have a very particular energy crisis. The low oil price means that the big energy companies are pulling out of the North Sea. 70,000 jobs have gone since January 2015 – on Monday 8 February 2016 it was announced that 150 rigs are scheduled for decommissioning. It’s worth noting that the job losses in the energy sector are on top of over 40,000 that are going through across Scotland as a result of latest round of local authority cuts. The combined scale of job losses in Scotland is massive – bigger than the pit closures and, at the moment, it is going through under the radar.
Government subsidies of up to half a billion pounds are going to the big energy companies. None of this is going to the workforce. Many of the workers have moved to the North East of Scotland to be near to the work. Now they are out of a job and trapped in the area with high mortgage payments as house prices go down. The only growth industry in Aberdeen is food banks.
There’s a huge onslaught on wages and conditions. Some of the people who are laid off are offered re-employment on a two-week contract. At the end of the two weeks if your face doesn’t fit your papers can be stamped NRB – Not Required Back. New contracts reduce the hourly rate from £25 an hour to £9 an hour for 15-hour days.
The companies should pay for decommissioning; but it looks likely that as they bail out they will push the costs and responsibility on the public purse. The total cost of decommissioning is likely to be around £34 billion.
The signs are that the big companies are leaving the North Sea for good. But this isn’t an environmental decision, based on leaving hydrocarbons in the ground. The clear intention is that when the oil price rises they’ll focus on fracking and underground coal gasification. This is why they are lobbying the SNP so hard.
All of this is happening now and it requires a response now. Without a response we will have a huge increase in unemployment, wages and conditions driven down and the loss of a workforce who’s skills could be (and were up to a couple of years ago) adapted to working on sustainable sources of energy.
Here are some suggestions for what these policies could include:
- Active support for the ‘Furies’ and any other group of energy sector workers who organise in defense of their jobs and conditions
- Nationalisation of the offshore industry and downstream processing and manufacturing
- Creation of a sovereign wealth fund that would underpin a Green Bank (hydrocarbons to be treated as precious high value resource that has to be used in ways that guarantee long-term sustainability – the Norwegian approach is closer to this)
- Major investment in renewables and creation of 100,000 climate jobs as part of a long-term strategy for switching from carbon to no-carbon
- Establishment of a Scottish energy skills academy, which would support the current workforce in shifting its skills base towards sustainability
- Stop the redundancies; redeploy the workforce into retraining and sustainable energy projects
- Legislate for safety – ban short-term contracts – ban blacklisting