Rishi Sunak has committed to hundreds of North Sea oil and gas projects and approved funding for a long-awaited energy industry scheme in the north-east.
The prime minister announced plans to grant fresh oil and gas licences ahead of a visit to Aberdeenshire on Monday.
The Tory leader also gave his formal backing to a major carbon capture project at St Fergus, near Peterhead, which is estimated to create more than 20,000 jobs.
Conservative insiders claimed today is a chance for Mr Sunak to boost his party’s energy credentials at a time when Labour’s policies have come under scrutiny.
Earlier, Mr Sunak insisted continuing oil and gas exploration is “absolutely the right thing to do”.
‘Better for the environment’
“Even when we reach net zero in 2050 a quarter of our energy needs will still come from oil and gas,” he told BBC Radio Scotland.
“It is actually better for the environment because there is no point in importing stuff from halfway around the world.”
First Minister Humza Yousaf backs carbon capture but slated plans to ramp up oil and gas production.
🧵 We've been calling for CCUS to be funded for almost two decades, so this element of UK Govt announcement is welcome.
However, for PM to effectively signal unlimited oil & gas extraction is a further demonstration that they're not serious about tackling the climate emergency.
— Humza Yousaf (@HumzaYousaf) July 31, 2023
The SNP leader stated: “For the PM to announce unlimited extraction of oil and gas, in the week the UN has confirmed July is set to be the hottest month in human history, shows the PM is willing to recklessly gamble the future of our planet for cheap political gain.”
Mr Yousaf’s party is opposed to further exploration and wants to shift toward renewables.
Mr Sunak revealed up to £20 billion will be poured into four separate carbon capture schemes across the UK.
Party sources said there was relief that Peterhead’s carbon capture plans have been formally backed after years of frustration.
In 2015, the UK Government ended a £1 billion competition to get potential schemes off the ground, disappointing backers of the project in Peterhead.
The Tories then reversed course in 2020.
Scottish Tory leader Douglas Ross contrasted the prime ministers trip to Aberdeenshire with Sir Keir Starmer’s decision to outline his own proposals to shift away from oil and gas in Edinburgh.
Mr Ross, Moray MP, said: “His visit is a clear reminder that it’s the Conservatives who are backing Scottish oil and gas.
“Contrast this with Keir Starmer hiding away in Edinburgh.”
Veteran Aberdeen Labour city councillor Barney Crockett quit the party in protest at Sir Keir’s approach.
He told the P&J Sir Keir and Scottish Labour boss Anas Sarwar have “zero understanding” of Aberdeen.
It has been a frustrating time for industry in the north-east after years of disappointments on large projects.
Last year, businesses were angered by Mr Sunak’s decision to impose a windfall tax on energy firms reaping huge profits.
At the start of 2023 firms in the region were dismayed when Aberdeen’s bid to gain a green freeport failed.
Tory sources say the mood among business has improved due to plans for carbon capture funding and the north-east winning investment zone status.
Russell Borthwick, chief of Aberdeen and Grampian’s chamber of commerce, said: “This is an extremely positive day for our energy sector and for the future of the north-east.
“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.”
Business tycoon Sir Ian Wood, a strong supporter of the industry, also welcomed the development.
The Aberdeen billionaire said: “This is welcome and provides much needed clarity for the industry.
“It makes absolutely no sense to reduce our reliance on domestic oil and gas production only to increase carbon heavier imports from overseas and place in jeopardy tens of thousands of jobs.”
Aberdeen Conservative Councillor Ryan Houghton said the prime minister’s announcement is a “much-needed shot in the arm” for the region’s economy.
North East Conservative MSP Maurice Golden said Mr Sunak was “leading the charge” in an area that will be a key battleground at the next UK-wide vote.
Banff and Buchan Tory MP David Duguid said he was “delighted” to see the carbon capture scheme formally approved as the prime minister visited his constituency.
But rival parties in Scotland warned Mr Sunak must ensure funding for the energy scheme is actually followed through given previous disappointments.
SNP Westminster chief Mr Flynn said: “Any investment is of course welcome.
“However, the UK government has taken Scotland down this path before – and failed to deliver every single time.
“There can be no more delays.”
Scottish Labour MSP Sarah Boyack said: “While it is welcome that the Tories seem to be accepting Labour’s calls to back this project, this pledge must be followed through and not added to the scrapheap of Tory broken promises.”