The oil and gas industry will play a vital role in British energy needs for decades to come, a trio of UK government ministers has pledged.
Three Liberal Democrat secretaries of state were in Aberdeen to set out their long-term strategy, offering to encourage investment, boost supply chains and promote exports.
They used the opportunity to intervene in the Scottish independence debate, telling business leaders that the UK government is best able to support them. An independent Scotland would be too reliant on offshore revenue and less able to weather any “shocks”, they said.
Business secretary Vince Cable, Scottish secretary Michael Moore and energy secretary Ed Davey said they wanted to maximise economic production, noting that oil and gas would make up 70% of British energy needs into the 2040s. The supply chain could also be supported, exporting skills to other countries and bringing new skills to the industry, they said.
A new cross-party group of MPs will start to work with the industry in an attempt to guide the government's work.
Davey said the industry would play a huge role despite efforts to promote cleaner fuels and decarbonisation. “The primary products, oil and gas, on all estimations will remain an integral part of the mix for many decades to come,” he said.
Quickly moving to address the independence referendum, he said: “Only the UK can deliver what is required over a sustained period if you are going to get the most out of the oil and gas industry. The UK is a large economy - that is why we can provide the support. Smaller economies have difficulty absorbing the costs.
“The size of the UK economy can really create the framework and certainty.”
Cable also underlined the pivotal role oil revenues are playing in the debate about the future of the UK.
The industry “shouldn't feel taken for granted by the UK government", he said. “A bigger country is better at absorbing shocks - it's simple logic. A modest change has a significant impact on GDP - in a country 10 times smaller, the shock would be proportionally bigger. We need to remember that when we're debating this sensitive issue.”
Malcolm Webb, chief executive of industry body Oil and Gas UK, said that close engagement with the UK government and the resulting tax changes last year to promote investment in the oil and gas sector were bearing fruit.
“Record investment is forecast this year to search for and produce UK oil and gas reserves. This will be followed by an upturn in production from 2014, sustaining growth across the supply chain and reinforcing the industry's already significant contribution to the UK economy.”
Neptune subsea technology centre announced
A subsea engineering centre will be built in north-east England to help develop state-of-the-art technology.
The £7 million Neptune National Centre will be created on the River Tyne in Newcastle.
Business secretary Vince Cable, unveiling the centre as part of a new oil and gas strategy, said: “The UK's oil and gas sector is crucial to the economy, so we've worked closely with the sector on today's industrial strategy. But its future success relies on it being underpinned by the latest science and technology.
“This cutting-edge new facility will help put our academic community and industry at the centre of subsea and offshore engineering research. It will drive up skills and develop the innovations needed to fuel growth in the North Sea.”
The centre will be built on the north bank of the river on Neptune Energy Park, part of Shepherd Offshore. It is billed by Newcastle University, which is providing funds for the scheme, as a centrepiece for economic revival.
Project lead professor Nick Wright said: “The Neptune Centre will create a unique facility that will significantly enhance research capacity, not just at Newcastle University but in the UK as a whole, providing a focus for the development of both new technology and academic-industry relationships that underpin future growth.”
The project, also supported by Newcastle City Council, includes plans for a hyperbaric chamber capable of testing technology and materials at temperatures and pressures equivalent to those found at the deepest ocean depths.