It seems almost unthinkable now but 11 years ago, Scotland’s successful future was inextricably linked by then First Minister Alex Salmond to North Sea oil.
According to Salmond, gearing up for 2014’s independence referendum, black gold would make Scotland one of the richest nations on earth.
It was all terribly rousing, I’m sure, but it was based on fantasy. The SNP’s “vision” for an independent Scotland depended on crude oil selling at a minimum of $110-a-barrel.
A little over a year after Scots voted No, Brent Crude was trading at less than a third of Salmond’s predicted price.
But while the late First Minister was hopelessly wrong about the financial security oil production would give Scotland after leaving the UK, he was absolutely right to focus on the importance of the industry.
The impact of the discovery and extraction of oil from the North Sea was huge and benefited us all, regardless of where we might live. But, of course, the effect was felt most acutely in the north-east.
In the good days – and they were very good days – Aberdeen boomed: house prices soared, unemployment was rare, and the city buzzed with businesses sustained by the earnings of off-shore workers.
How things have changed. Not only have oil prices remained well below the levels predicted by Alex Salmond, the industry has been treated appallingly by politicians at both Holyrood and Westminster.
Their desire to hit net-zero targets, well-intentioned though it may be, has blinded elected members to the consequences for people and their communities. Talk of a “just transition” is well and good but all too often, those who run the country talk as if the energy industry is at the root of all evil.
It has been impossible to separate Aberdeen’s economy from oil
It is impossible to separate Aberdeen’s economy from the oil business. When jobs were plentiful, the city boomed.
Now, as our leaders focus on other forms of energy, jobs are more scarce and pay hasn’t kept up with inflation.
All of this surely means predictions that Aberdeen will have the lowest economic growth of any UK city over the next three years are far from surprising.
The company’s regional economic forecast for 2025 suggests Aberdeen will see gross value added (GVA) of just 0.9% this year (on the off chance that you’re not a professional economist, GVA measures the value of goods and services produced by a sector after deducting the cost of production).
The effects of the contraction in energy impact more than oil industry
The EY report makes clear that the knock-on effects of the contraction in the energy sector do not simply affect those working within it and their dependents. Limited growth in the professional services industry will also play their part in Aberdeen’s sluggish growth.
Of course, the decision by the UK Government that the new state-owned company GB Energy will be based in Aberdeen was welcome. But once the dust settled around that announcement last September, it became clear that it could take years for the benefit to the local economy to be felt.
The possibility exists, I’m afraid, that the decision to locate the new company in Aberdeen is little more than symbolic. However, this need not be so.
It should be possible for politicians to lead us towards net zero in a way that doesn’t cut the oil industry off at the legs.
Yes, I’ve heard all the claims about renewables and about how Scotland’s wind could power every kettle in the UK (or something like that) but the fact remains that we – and those living wherever North Sea oil is imported – can’t just turn off the gas and oil pipelines.
On top of this truth, we must pile the global uncertainty created by the Russian invasion of Ukraine. Is this any time to be racing to limit energy sources?
During the years in which Nicola Sturgeon was first minister, North Sea oilfields were treated by senior government figures as a source of national embarrassment. But while Sturgeon’s friends in the Scottish Greens heartily approved of her loudly-proclaimed environmental credentials, many in her party believed she was ready to move too far, too quickly on reducing emissions.
For decades, the SNP positioned themselves as the protectors of the North Sea oil industry but that reputation is long gone, torn up by Nicola Sturgeon.
Aberdeen faces difficult times ahead. It’s now up to First Minister John Swinney to show us all a plan for the city’s prosperity painted in something other than oils.
Euan McColm is a regular columnist for various Scottish newspapers
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