Offshore Petroleum Licensing Bill

Debate between Kenny MacAskill and Sammy Wilson

2nd reading
Monday 22nd January 2024 Commons Chamber

[Kenny MacAskill (East Lothian) (Alba)]

I agree with a lot of what the hon. Member for Banff and Buchan (David Duguid) said, even though I disagree with the purpose of the Bill, which seems to me to be political grandstanding indicative only of it being an election year. It entirely fails to meet the significant needs of those who are currently struggling to heat their homes in Scotland, of the Scottish economy, which should be basking in all the glory and wealth that has been created through oil and gas, or of our wider planet.

We need to transition; that is self-evident. It is not simply about the global warming that Members have been talking about. Trains in my constituency were cancelled today and the A1 was closed because a lorry had overturned. It was a heavy goods vehicle, but not a high-sided one. The strength of the winds that battered the communities in my constituency and elsewhere did that. We have serious problems coming down the line, and we require to change, but it requires to be a just transition, at a pace that allows us to change, because we have to ensure that we keep the skills. We cannot do to those in the oil and gas sector what was done by Thatcher to the miners and simply close them down and throw them to the wolves.

We have to ensure that we transition to renewables, but oil and gas are required for us to make that journey. I can see it in the hills of the Lammermuirs, and I see it on a daily basis as increasing numbers of wind turbines go into the firth of Forth. At the end of the day, the ships putting in the columns for the turbines run on marine diesel. A lot of the turbines require plastics to be constructed, and we also need the vehicles simply to get them there.

We have to get to that renewable future. The tragedy in Scotland is that we are already there, as we produce almost as much energy as we require. Our people just do not get the benefit of it, because it is transmitted south and charged at an appalling rate when it should be almost free, given that people can see it from their homes, on their hills and off their shores. There has to be a change.

There is also a perversity. Although I agree with new licensing, Rosebank will be operated and owned by Equinor, the state energy company of Norway, so the profits will go to Oslo. Scotland and Norway discovered oil at the same time, because we share access to the North sea basin. Those in Norway have a standard of living and an economy that those in Scotland can only look at and weep with envy. They also have a futures fund, because they put the money away rather than allowing the super-rich to get even richer and invest in foreign bank accounts or highland estates. Norway has a futures fund and Scotland has precisely nothing.

We have to continue to build and to continue extracting oil and gas. That has to be at a significant pace for Scotland, while taking into account the need to meet the requirements of the planet. Two particular aspects are needed. First, as per the amendment in my name and that of my group leader, my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Neale Hanvey), we must have a commitment to a net zero carbon footprint.

In particular, that means taking into account the needs of carbon capture. Scotland has had the bounty of North sea oil and we need to ensure we continue to get benefit from it. We have coming the bounty of renewables, and we see that with offshore wind, both floating and fixed, but we also have huge potential with carbon capture, because the geology of the North sea provides something like 30% of the opportunities in Europe. Yes, carbon capture is untested, but our society and our planet need it.

More importantly, we must have a commitment to retain a refinery at Grangemouth. It is absurd, as others have said today, that the oil from the North sea is shipped abroad in the main to be refined, and then we import from supertankers coming in. Those ships pass on the high seas, and that is simply absurd. As we have a worsening planet crisis, it is perverse. It is not good enough to say, “It’s the wrong type of oil,” just as we would not accept a rail operating company saying that it was the wrong type of leaves on the tracks.

Yes, our refineries are not at the capacity for the engineering or technical skills to refine it, but that should be done. The first place to do that is Grangemouth. Why? Because the Forties pipeline comes into Grangemouth. As the hon. Member for Banff and Buchan knows, it lands at Cruden bay in his constituency, but it is piped down to Grangemouth. It is absurd that Grangemouth should be closing when the oil—both past and present, and indeed future—is coming in from the North sea. So if there is to be the continued extraction of Scotland’s need, which we have not benefited from because we do not have the wealth or savings of Norway, we must at least ensure that we save Grangemouth.

I call on the UK Government first to ensure that they provide the funds for the hydrocracker that will increase the profitability of the existing site threefold. If that is done—that would cost a fraction of the billions the UK has got from North Sea oil over the years, and a fraction of what it will continue to take in petroleum revenue tax and other benefits in coming years—we must ensure that we get the profitability up. Then, in a couple of years, we must take the engineering, the skills and the technology so that the oil from the North sea can be refined in Grangemouth. It is absurd and perverse that that is not done.

[Sammy Wilson]

Does the hon. Member accept that one of the reasons why we have not had investment in the refining industry in the United Kingdom for decades is precisely because the net zero policies that are being followed, with the costs and charges for carbon, the emissions trading scheme and other carbon taxes, discourage any investment in the very production facilities we use to process the oil that we bring out?

[Kenny MacAskill]

I think there are a variety of factors, and I have no doubt that some of those factors are there. There has also been a failure to invest. Where the blame does not lie is with a workforce who are skilled and who presently have to work with a refinery that is past its sell by date and requires to be invested in. Even the union and the workforce recognise that investment is required to get the hydrocracker going and to get the technology to ensure that we refine the oil there. It is probably not the current owner Petroineos but previous owners who have taken the benefit for themselves and invested it in their shareholders rather than putting it back into either the workforce or, indeed, capacity at the refinery. Tragically, that happens across so much of UK industry, whether the shipyards, the steelworks or whatever else.

We see a Government who will benefit from North sea oil’s continued extraction, so the least that Scotland is entitled to expect is its refinery to be at the heart of that. Especially when the oil will flow down that golden thread in the Forties pipeline down to Grangemouth, we require to ensure that Grangemouth will refine it. Yes, that requires technical changes, and yes, that will come at a cost, but that is a small fraction of what the UK will take from the benefit of that North sea oil. That is why the Alba party’s support is conditional on carbon capture and the net zero footprint, and also conditional on Grangemouth being at its heart.

It is absurd that Scotland is not getting the wealth from the oil off its shores. It is absurd that while countries have seen their desert redeveloped and bloom because of the oil they have had, what we have seen with North sea oil is an industrial desert created. Having been brought up only 10 or 15 miles from Grangemouth, I know the devastation that will come to that community unless there are the changes required to ensure that Grangemouth does the refining for North sea oil. We cannot afford to have Grangemouth thrown to the wolves. As I said in last week’s debate, we cannot have “Grangemouth no more”; we require to ensure a refinery capacity.

It would be absurd for Scotland in the UK to have in Grangemouth no refinery capacity. Scotland would be ranked 21st in the nations that produce oil, and the only one in the top 25 without a refinery capacity. The only other countries that tend not to have refinery capacity are the likes of the Republic of Congo and Trinidad and Tobago. I wish those countries no ill—I am sure they are fine countries—but they do not produce the same level of oil, and they are not developed industrial economies. The fact of the matter is that Scotland should not be in that same position of being an oil-producing nation without a refinery capacity. On that basis, Grangemouth must be retained. I call on the Government to do that.

My only additional point is that the Scottish Government, too, require to step up to the plate. The fact that the business and economy Secretary in Scotland appears to be accepting the closure of Grangemouth as something that just will happen and is maybe a matter of regret is simply unacceptable. He may be in coalition with the Greens, but he cannot have them wagging the SNP dog. It is simply unacceptable that we see Grangemouth close without a fight. The Scottish Government should be leading the demands that the refinery is changed, that we do ensure the hydrocracker, that we do provide the changes to refine in Scotland, and that we do move towards biofuels. What they should not be doing is wringing their hands and selling out the Grangemouth workforce. We require a refinery capacity in Scotland. The UK Government have had the benefits of Scotland’s oil and should pay for it, and it is about time that the Scottish Government stood up for industrial Scotland and the workers who at one point put their trust and faith in them.