(Image: PA)
Scotland’s energy minister has called for a "futures fund" to be established from the profits of the Jackdaw gas field to support the renewables industry.
Stephen Gethins said the UK Government had failed in the past to use cash generated by north sea drilling to deliver "long-term" benefits.
Mr Gethins spoke out after the UK Government approved plans to begin drilling in the Jackdaw gas field in the North Sea.
The decision by the North Sea Transition Authority ends months of speculation about the future of the project, which owner Adura said could deliver around 6% of UK North Sea gas production.
Scotland’s energy minister said: “Perhaps the most significant failure of the past half century of Westminster energy policy has been the failure to establish a futures fund. The UK has been almost the only country to discover oil and gas but not deliver a long-term benefit from a finite resource. That must change today.
“It is crucial that all further income from oil and gas resources taken by the UK Treasury is placed in a future generations fund. That would deliver a long-term benefit from a limited resource.
“Any such fund should grow Scotland’s renewables industry, support the communities who have generated hundreds of billions of pounds in taxation for Westminster, and strengthen the supply chain to ensure ongoing investment and job creation in Scotland."
SNP MSP Steven Gethins (centre) (Image: Jane Barlow/PA Wire)
He added: “I am sure that the Prime Minister will agree that it is absolutely critical that if any new production goes ahead, then the economic benefits should be felt in Scotland and should be used to bring energy bills down, rather than flowing to plug more short-term spending gaps by the Treasury.
“The UK Government must also replace the Energy Profits Levy with a fair system that protects jobs, energy security and investment in our energy sector.”
Chancellor John Healey said a new Energy Wealth Fund would be used to funnel tax revenues from North Sea oil and gas into renewable and low carbon schemes.
The fund will have an initial £2 billion funding injection.
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Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, welcomed the news that drilling was about to start
He said: “This is a hugely welcome decision, and exactly the sort of pragmatic call the North Sea has been crying out for.
“Jackdaw is 99.9% complete and, with approval now secured, gas from this field will be flowing into homes up and down the country within weeks.
“This is a direct, tangible boost to the UK’s energy security at a time when it matters most."
He added: “Every molecule of gas we produce in the North Sea, under some of the world’s highest environmental standards, is a molecule we don’t have to import on a tanker from overseas. That’s good for jobs, good for the supply chain, and good for the climate.
“But Jackdaw cannot be the end of the story. Rosebank is every bit as vital to our energy security and every bit as ready to deliver for the UK supply chain anchored here in the north east of Scotland.
“Government must now move with the same urgency and pragmatism and get Rosebank over the line without further delay.”
Offshore drilling is due to begin at the Jackdaw field (Image: PA)
However, environmental groups have expressed their disappointment at the decision.
Lang Banks, director of WWF Scotland, said: “This is deeply disappointing, but not unexpected news.
“Disappointing as this licence won’t cut households’ soaring energy bills and it’s unclear if it will even boost our energy security.
“The best way to achieve that is to get on with the clean energy transition and reject out of hand the even more damaging Rosebank oil field.
“Instead of more polluting fossil fuels, Scotland needs to be supported to continue its path to fully harness homegrown renewable energy.
“That’s why it’s vital that the UK and Scottish Governments work together to deliver a transition that is fair for workers, communities and consumers.”