Politics: Opposing views on the outcomes of carbon capture
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Aberdeen and Grampian Chamber of Commerce has welcomed today’s announcement by the Prime Minister that hundreds of new oil and gas licenses will be granted in the UKCS signalling a “vote of confidence” in Scotland’s world-leading energy sector.
After sustained political and business pressure, the UK Government has also confirmed that the Acorn carbon capture and storage cluster will go ahead by 2030 — with huge potential for innovation and new jobs in the north-east of Scotland, where the project is centred.
However, a 75 per cent tax rate on the profits of energy companies is still impacting investment decisions in the here and now with many firms questioning the viability of future projects.
AGCC has today reiterated its opposition to the Energy Profits Levy, or so-called ‘windfall tax’, as a barrier to investment which still needs to be urgently addressed.
Commenting on today’s announcement, AGCC Chief Executive Russell Borthwick said: “Overall this is an extremely positive day for our energy sector and for the future of the north-east of Scotland — a region at the forefront of energy transition and home to a truly world-class industrial sector.
“Carbon capture is a critical piece of the jigsaw in reaching net zero.
"While it was disappointing for the north-east to miss out on Track 1 status in 2021, a concerted effort by industry has kept this project very much alive and uppermost in the thoughts of government decision makers.
"That it can now proceed without further delay is great news, keeping Aberdeen and Grampian at the forefront of emerging technology and creating high-value jobs in the process.
“On new licenses for oil and gas, we welcome the scale of the ambition and the comfort that this provides to firms for the years ahead.
"We know that oil and gas will be required, albeit in declining amounts, as we transition towards a greener future. It makes far more sense for us to produce our own — at lower cost and with lower emissions — than importing this resource from overseas.
“It’s also a common sense strategy that protects Scotland’s jobs and translates into economic benefits for communities like our own.
“Today’s announcement goes some considerable distance towards ensuring that Aberdeen can transition from its status as the oil and gas capital of Europe to the Net Zero Capital of the world.
“That said, there remains one sizeable barrier to achieving this — in the form of the Energy Profits Levy.
“This windfall tax is well past its sell-by date and is hampering investment in the here and now.
"And while the Treasury have set a price floor, they’ve done so knowing there’s little chance of it being triggered any time soon. Companies cannot have confidence to invest in the future as long as it remains.
“If the UK Government really want to turbocharge transition, deliver greater energy security and reap the long term economic benefits which can be realised right here in the north-east of Scotland it’s high time that EPL was scrapped or, at the very least, for the price floor to be set at a level that reflects a fair average price for oil and gas over recent years."
Climate campaigners however are furious that the Prime Minister is ‘doing the bidding’ of the oil industry after he re-affirmed that the UK Government will issue over 100 new licences for oil and gas exploration this Autumn.
Campaigners say that instead of giving more public money to oil firms it should be invested in climate solution that work today and can improve people’s lives such as public transport and home insulation.
Friends of the Earth Scotland head of campaign Mary Church said: “Burning oil and gas is driving extreme weather and killing people on every continent yet Rishi Sunak is gleefully encouraging the arsonists to go and put more fuel on the fire."
“By ignoring the huge harm caused by fossil fuel company greed and doing bidding of the industry, the UK Government is blatantly in denial about climate breakdown."
“By committing to future licensing rounds on the same day, it's clear to see that carbon capture is little more than a greenwashing tactic by big oil to try and keep their climate-wrecking industry in business."
“CCS has a long history of over-promising and under-delivering yet both the Scottish and UK Governments have fallen for the snake oil salesmen rather than face reality that the only solution to the climate crisis is a fast and fair phase out of oil and gas.
“Funding for the Acorn project is yet another massive public subsidy to oil companies like Shell who have been making billions in profits, while ordinary people are struggling to pay the bills.
“Instead of handing more money to polluters, it is time to redirect that investment to climate solutions that we know can deliver emissions cuts and improve peoples’ lives today - such as improving public transport and insulating people’s homes to help with energy bills.”
Commenting on the UK Government’s citation of analysis showing domestic gas production has a lower carbon footprint than imported gas, Church continued: “It’s pure spin to try to sell more climate wrecking extraction as lower carbon when every nation needs to phase fossil fuels out with rich nations like the UK going first and fastest.
"What’s more, the Prime Minister is comparing apples and pears as most of what’s left in the North Sea is heavy oil, that we don’t even use domestically, not gas, so it has to be exported anyway.”
