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Scotland’s ‘golden opportunity’: Nicola Sturgeon’s adviser urges North Sea sector to move into carbon capture

Seize the day: Nicola Sturgeon's adviser says the oil industry must adapt to carbon capture.
Seize the day: Nicola Sturgeon's adviser says the oil industry must adapt to carbon capture.

Nicola Sturgeon’s key economic adviser has said the North Sea sector must move into carbon capture technology to overcome the low oil price and recover from Covid-19 economic damage.

Benny Higgins said the Scottish Government must have discussions with north-east businesses about transitioning from oil and gas as he launched his economic blueprint for combating the coronavirus.

Mr Higgins, the former CEO of Tesco Bank, is chairman of the independent Advisory Group on Economic Recovery set up by the First Minister during the crisis.

A key recommendation of the group’s 77-page report is for more emphasis to be put on renewable energy, arguing Scotland is “uniquely placed” to become a carbon capture centre.

I think there has to be a repurposing of the oil and gas sector to some degree and that’s where the heart of the progress has to lie.”

Benny Higgins

The report, titled Towards a Robust, Resilient, Wellbeing Economy for Scotland, said: “There is now an opportunity for Scotland to lever some of its natural advantages: the almost limitless quantities of renewable energy potential from wind, wave and tidal power can be used to generate electricity surpluses to export to the rest of the UK and elsewhere and to generate ‘green’ hydrogen to use in the heat and transport sectors.

“The geology of the North Sea in combination with the pre-existing pipeline infrastructure leaves Scotland almost uniquely placed to become a centre for the transport and storage of carbon captured from combustion processes, and the prioritisation of nature-based solutions can build on the natural environment as a key part of Scotland’s brand and comparative advantage to the benefit of tourism and other sectors.”

Launching the report alongside Ms Sturgeon, Mr Higgins acknowledged that the 130,000 jobs supported by the oil industry had to be protected.

“Anywhere there is a lot of jobs we have got to be very careful and selective about our interventions,” Mr Higgins said.

“It is an important employer; we have got to make sure we treat it as such. But what we also know that with the oil price likely to be low for a long time – that is the most likely outcome – we need to look at also how we can reposition some of the apparatus.”

Benny Higgins.

Professor Dieter Helm, another member of the group and Oxford University Professor of Economic Policy, had said there was a “golden opportunity” for repurposing oil infrastructure for carbon capture.

Mr Higgins added that the Aberdeen oil entrepreneur Sir Ian Wood was “very progressive” about how the oil industry had to adapt in the north-east.

“I think what we have got to do is that the Scottish Government is going to have to convene those discussions with that part of the world,” Mr Higgins said.

“I think there has to be a repurposing of the oil and gas sector to some degree and that’s where the heart of the progress has to lie.”

Oil and Gas UK Sustainability Director Mike Tholen said: “We agree that the UK’s offshore oil and gas industry is well placed to play a key role in the development of low-carbon solutions including carbon capture usage and storage.

“With the oil and gas industry at the heart of a green recovery, we can use our skills and infrastructure to help the wider UK reduce emissions. This would help deliver a green recovery that supports jobs, finds new opportunities for supply chain companies and ensures a fair and sustainable transition for energy communities including Shetland and Aberdeen.”

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