Shanks denies 1,000 jobs claim as more cuts due – Daily Business

Michael Shanks: we are determined to tackle the transition

Energy minister Michael Shanks today denied that a thousand jobs are being lost every month in the oil and gas industry as a Tory MP revealed that more redundancies would be announced in the northeast of Scotland.

Mr Shanks told a committee of MPs that the regularly mentioned Robert Gordon University figure on monthly job losses had been misquoted and that the research pointed to a greater number of jobs in renewables being created.

Giving evidence on the energy transition to the Scottish Affairs Committee, he said the decision not to drill for more oil and gas was a “pragmatic realisation” of the decline of the industry, but the Labour government was determined to “fill the gap” and make a successful transition to renewables.

He said energy prices were being kept high because of the UK’s historic reliance on gas and it was vital that the country made the switch to cleaner sources.

“We are driven by gas more than other countries because we don’t have the nuclear that France has, the solar that Spain has, or the hydro that Norway has, and so gas is setting the price more often.

“What we want to do is de-link the [gas] price so we are getting the advantage of clean power, but it is not a straightforward thing to do.

“The only way to do that is to build the grid that should have been built a long time ago to bring clean power to where consumers are.

“That will immediately achieve bill savings and will de-link gas because we will move to a place where gas is a reserve, not a day-to-day generator of our electricity system.”

Tory member Harriet Cross challenged the government’s strategy and its approach towards the jobs being lost. “Seventy per cent of our electricity mix is oil and gas and that will not change any time soon and 24 million homes rely on it,” she said.

Harriet Cross: ‘I am not pretending’

Mr Shanks replied: “We have never said we would stop North Sea oil that is in production, nor rescind licences, but “all the evidence points to new licences having a very marginal impact on future production”.

He said: “It is a pragmatic realisation of the current situation”, adding that new licences will not be issued but tie-backs to existing fields will be considered.

The “economic advantage” for the region would come from renewables such as offshore wind and floating offshore wind and hydrogen, said Mr Shanks.

“I’m afraid pretending that the facts on what has been a decline for 20 years are different doesn’t change the facts…”

Ms Cross interrupted to say: “I’m not pretending anything and I’m sure that’s not what you mean. I live in the north of Scotland. I speak to the industry very regularly and I have people in my constituency whose jobs are being lost every single day.

“There were more job losses yesterday that are not public yet. There are more job losses in the northeast every day because of the decline that’s being driven at an expedited rate in the oil and gas sector largely because of this government’s policies.

“This is an industry that is being driven down much faster than it needs to be…and it is having an impact on the jobs we need for the transition.

“So I do not buy your argument that because there might not be as much oil and gas in the North Sea as there used to be that it is not worth producing. So would expanding production in the North Sea increase supply?”

Mr Shanks replied that she appeared to believe oil and gas could continue flowing and that “you are against investment in what comes next and that simply is not a reasonable position to take.

“We have an incredibly skilled workforce in Aberdeen and the northeast. You are absolutely right to make that point. But what we have to build is the transition so that it can take those skills into the jobs that come next.

“If I have a frustration with the framing of the job losses it is only this: every single job is a serious problem for that individual, their family and community, but we do need to look at the workforce as a whole.

“The Robert Gordon University figure, first of all, is fundamentally misquoted being a thousands jobs [lost] a month which is not what that research says.”

He said the research also referred to the number of jobs being created in other parts of the energy system. The challenge was trying to fix the gap in the transition from one industry to the other.

Mr Shanks sees more wind power as the future

“It is simply disingenuous to say that every job loss in oil and gas doesn’t result in any new jobs being created in renewables.”

He said RGU found that by 2030 the mission could support more jobs in renewables than were lost in oil and gas; the equivalent to 1,400 jobs a month between 2024 and 2030.

“So we are going to see a change in the workforce and you can’t just look at one side of the balance sheet in isolation,” he said.

He added that he worried about those who were not making the transition, which was why supporting measures were put in place.

“I wish we had been doing that 20 years ago when we first knew we were losing thousands of jobs in oil and gas. But we didn’t.

“I take responsibility for the Labour party’s role in that when we were in government. There was also 14 years of the Conservatives not taking it seriously so there is plenty of blame to go around. It doesn’t solve the issue but we are determined to tackle it.”

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