Something strange is starting to emerge in the UK.
After years of being poles apart, tensions between the renewable and fossil fuel sectors might be thawing.
At the recent All Energy conference and exhibition – billed as the UK’s largest low-carbon energy and renewables event - there were increasing signs of recognition of the important role oil and gas will continue to play in the future energy mix.
Firstly, unlike last year, anti-fossil fuel protestors were conspicuous by their absence.
Secondly, the political tone was more conciliatory than it has been even recently. In the opening plenary session, Scottish government Deputy First Minister Kate Forbes talked of the “underlying fact” that the North Sea oil and gas industry will be around “for decades to come”. She mentioned her “deep concern” at the reported job losses at Harbour Energy. She also referenced the continuing “damaging effect” of the UK government’s Energy Profits Levy – the so-called windfall tax – which has been so bitterly opposed by the North Sea oil and gas community.
Similarly, UK Energy Minister Michael Shanks highlighted the role oil and gas play in the energy story and the importance of north-east Scotland over the past 60 years. “I’m proud of what those workers have achieved,” he said.
And all this at the UK’s major renewable energy gathering.
The increasing national recognition that oil and gas will still be important to our energy supply has much do with the efforts of bodies like Aberdeen & Grampian Chamber of Commerce and Offshore Energies UK, who have fought hard to be heard against the overwhelming volume of anti-fossil fuel rhetoric.
But things are changing. While it’s unlikely to ever be a love-in, oil and gas and renewables are recognising that they do share common ground. And it’s around two words: pragmatism and uncertainty.
For an oil and gas industry that has tied itself in knots recently, trying to prove often questionable green credentials to satisfy the powerful environmental lobby, those days are dwindling. Geopolitics, consumer supply security fears and investor demand for financial returns have reset priorities. Today, companies like BP and Shell use words like ‘pragmatism’ or ‘disciplined’ when describing their strategies. In the renewable sector, there is growing pragmatism, too. Look at Ørsted’s recent decision to halt work on the Hornsea 4 offshore wind project because the financials didn’t stack up.
Both oil and gas and renewables are united by uncertainty, too, mainly around finance. From the oil and gas side, the taxation challenges have been well documented. For renewables, it’s about de-risking business to attract investment. Both sides need policy clarity from governments.
How will they move on from here? It’s about effective communication. Ensuring that the right messages reach the right people so that they can make fully informed decisions to ensure a stable energy future. Because, make no mistake, we’re at a critical crossroads in our energy journey. For our sake and for those who come after us, we simply can’t afford to take the wrong path.
