Flynn calls on Miliband to change oil and gas regime

SNP Westminster leader Stephen Flynn has called for changes to Westminster’s oil and gas regime.

Mr Flynn has written to UK Government Energy Secretary, Ed Miliband MP, amid reports that the UK Government is considering a recommendation to allow exploration in new fields via adjacent existing fields.

The Aberdeen South MP said that the “path to clean energy security is being blocked by your UK Government’s licensing and fiscal regime, which is destroying the highly skilled jobs in our existing offshore industry”.

He added: “It is damaging our economy, risking our energy security and leaving Scotland’s world-leading industry at breaking point”.

On Sunday, the Times reported that the Energy secretary is “poised to soften the government’s position on North Sea oil and gas exploration” as he “faces mounting pressure to dilute his party’s ban on new drilling to help to boost jobs and smooth the transition to renewables”.

Mr Flynn said that Mr Miliband has “the chance to right this wrong” and recommends implementing the plan by John Underhill.

He wrote: “Everyone in the energy industry knows that the supply chain to deliver clean energy security is exactly the same supply chain that is delivering our energy security at present.

“Your failure to recognise this has had profound consequences, but you have the chance to right this wrong.

“For too long, Westminster has treated Scotland’s energy wealth as a cash cow to be drained rather than an asset to be protected to deliver a sustainable, clean energy future that will mean jobs not just for the next decade, but for the next 100 years, reaping the rewards of energy security and lower bills in the process.

“I urge you to do right by our workforce, our energy security and clean energy future by implementing the recommendation of John Underhill.”

The Aberdeen & Grampian Chamber of Commerce (AGCC) have said the reports of a revised oil and gas regime are a “welcome first step” but has said that any changes must be brought forward with an end to the Energy Profits Levy.

Aberdeen & Grampian Chamber of Commerce chief executive, Russell Borthwick, said: “These reports hint at welcome small steps towards more flexibility on North Sea licensing.

“Allowing new developments to go ahead was one of the clear recommendations of the North Sea Transition Taskforce’s report earlier this year – an important piece of work supported by AGCC and the British Chambers of Commerce.

“The unintended consequences of mass job losses and permanent supply chain damage are already leaving us at a competitive disadvantage in the transition and dependent on more imported oil and gas, which supports no UK jobs, pays no UK tax and is four times more carbon intensive than hydrocarbons from the North Sea.

“However, limited new development through tiebacks alone won’t solve the problem altogether.

“The industry will remain on a worrying trajectory unless we see accompanying reform to the fiscal regime and the end of the windfall tax from the next tax year, as well as a level playing field on environmental impact analysis for domestic projects versus imports.”