A wealthy port city is transforming itself for post-oil politics. Aberdeen will now host a food festival and may export green fuels, but there is almost no heavy industry.

Andrew Milligan/Press Association Image via Associated Press

The Port of Aberdeen is undergoing expansion to triple the number of deep-water berths and expand mooring points to prepare for the ever-changing energy industry.

150 miles northeast of Glasgow, where countries around the world have recently tried to make progress on the climate crisis, the cold port city of Aberdeen is undergoing energy reforms.

This is the laboratory condition for a well-funded "energy transition". This new term aims to show that the climate crisis is not a balance sheet cost, but an investment opportunity. In the oil and gas capital of Europe, civil servants are working hand in hand with friendly faces from the fossil fuel industry.

Arriving by boat, you will notice that Aberdeen Port is undergoing expansion. Investors are investing 350 million pounds (half a billion U.S. dollars) to triple the number of deepwater berths and expand mooring points. Seaports are blocked worldwide, but this upgrade is to prepare for future climate-related shocks.

"We do not compete with other container ports," Harbour Board CEO Bob Sanguinetti told Prospect Magazine. Conversely, as many as 70% of port activity provides energy to Aberdeen’s offshore energy sector, which is another courtesy term that includes renewable energy and North Sea oil drilling.

More spacious berths in the port can accommodate larger ships that build and serve offshore wind farms, and more docking space will accommodate a large number of renewable machine parts.

These have surfaced. Scotland’s powerful energy reforms have promoted the UK’s increasing dependence on wind energy. Scots consume 97% of electricity from renewable sources and export more electricity abroad.

In the short term, the transition is more like a mixed picture. The UK is advancing its strategy of "maximizing economic recovery" and continues to exploit all profitable oil and gas, including 18 new oil and gas projects in the North Sea that are about to be approved.

This may change soon. Scotland’s Chief Minister Nicolas Sturgeon broke the British extremist stance last week, saying before COP26 that the country should get rid of unrestricted mining. But even if drilling ends earlier than expected, workers are worried that post-oil Aberdeen will come into view.

Since 1970, the North Sea oil and gas industry has employed hundreds of thousands of people and paid approximately 360 billion pounds in taxes to the UK Treasury. ——Old City Councillor. Oil and natural gas made this city.

During the 2008 financial crisis, the city was mostly insulated. Horton said that the Lehman Brothers moment in Aberdeen didn't come until the collapse of natural gas prices in 2015. Some Abertonians lost a monthly salary of £4,000 overnight. "You ask people to put back the car keys they just bought through the retailer's mailbox," he recalled.

But Aberdeen is still the Scottish city with the highest gross value added per capita. That's because 50 years of traditional oil extraction equipment winds down from the coast.

Drilling companies will not just write off these capital stocks, pack them up, and go home. They looked around. Apart from oil and whiskey, what natural resources does Scotland have? Wind and water.

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Earlier this year, the offshore oil and gas industry negotiated an agreement with the United Kingdom. The North Sea Transformation Agreement states that these companies will reduce emissions by 50% and invest in low-carbon technologies by the end of the decade.

Companies such as BP and Shell are proposing retrofits to existing oil and gas infrastructure to achieve green goals, using technologies that many environmentalists still consider harmful interference.

The most controversial method is to combine natural gas with steam at high temperatures to produce carbon dioxide (CO₂) and so-called "blue" hydrogen. Blue hydrogen will eventually be used to heat homes, and its emissions are lower than natural gas, although Earth system scientists have even recently expressed doubts about this mild statement.

The carbon dioxide released in this process will be captured and transported to the sea, buried in the seabed rock formations. The demand for hydrogen is not great yet, so some people suggest temporarily using empty oil fields to store it.

Oil executives may be cunning counterparties, but North Sea is not Saudi Arabia. Productivity is declining, and costly new exploration is needed to extract oil from the aging basin. They believe that if large oil companies can convert hydrocarbons into renewable energy, everyone will win.

At present, the idea of ​​using depleted oil fields as carbon sequestration real estate has caught the attention of executives. Instead of using pipes to absorb fossil fuels like straws, they change the direction of flow and blow carbon dioxide into the ground. Shell's North Sea boss called it a "reverse upstream business" plan.

A more mature technology is green hydrogen, which uses renewable energy to split water into hydrogen and oxygen. Here, the biggest obstacle is cost, but with the investment of oil giants, the cost may drop rapidly. Just last week, Aberdeen announced the establishment of a new green hydrogen production center in cooperation with BP.

Even assuming that the cost of technical solutions is lower, the labor organization still believes that Scotland may not be able to reap the benefits of the transition.

Monica Lennon, a member of the Labour Party in the Scottish Parliament, said: “There is interest here to be part of manufacturing solutions, but we are seeing this opportunity being lost and flowing overseas.”

Jeff J Mitchell/Press Association via Associated Press Picture

Oil rigs in the North Sea

"The British ruled the empire, but the Scots ran away from it," the old saying goes. Before oil defined Aberdeen, the city was the center of mining, steel and shipbuilding.

In the 19th century, Aberdeen was nicknamed the "Granite City" and was a key point in the export of sparkling mica zebra stones from Scottish quarries to the world. On the eve of World War I, Scotland built more than 20% of the world’s naval and civilian ships. The World War II defense contract strengthened its position as a shipping power.

Many Scots accuse Maggie Thatcher of withdrawing public investment in everything from coal to automobile factories because she ended that golden century. Her policy destroyed Scotland’s industrial base, although some departments limped forward before she was fatally hit.

Despite the decline in manufacturing employment, the booming emerging industries have eased the impact. In 1969, the spill of oil from the North Sea brought not only cash to Scotland, but also new political ambitions.

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The Scottish nationalists, who were still marginalized, suddenly had economic reasons for independence. A bureaucrat warned the government that an independent Scotland built on North Sea oil "is often in a long-term embarrassment."

"If North Sea Oil makes a huge contribution to the British budget in five years, and the economic and social conditions in the Midwest of Scotland continue to be in poverty as they are today, then it is difficult to imagine conditions better for the UK. Increased support for nationalist movements ," the report warned.

The Scottish National Party (SNP) gradually emerged with the slogan "This is Scotland's oil". But just as oil calmed the demise of Scotland’s great industry, oil revenue lubricated the British treasury and returned to Scotland as a social expenditure, making poor Scots more dependent on Westminster and suppressing their desire for independence.

"Welfare payments from the North Sea wealth are sufficient to benefit a large population of central Scotland. Obviously, the benefits are not great, but they are better than extreme strictness," said Scottish historian Tom Devine.

Scotland is not the only beneficiary of the North Sea oil discovery. Norway also began offshore exploration in the 1960s, and oil extraction in 1969.

Dick Winchester (Dick Winchester) is a Scottish mechanical engineer. He skimmed the bottom of the North Sea in a deep-water submarine in the 70s. He remembers that time. After he helped develop Statfjord, one of Norway's first large oil fields, he noticed that no one asked him to stay. "Usually Norwegians, once they learn from us how to do it, they will do it themselves."

In this spirit, Statoil, Statoil, holds the ownership of Norwegian oil production and transfers oil profits to sovereign wealth funds. Britain originally had its own state-owned oil company, Britoil. But the Conservative government sold Britoil to private investors, and BP took over it in 1998.

Over the next 50 years, Statoil’s revenue dwarfed the revenue of the British Treasury. A study found that Norway’s revenue per barrel is more than twice that, with losses of up to 400 billion pounds.

That's just the oil and gas sector. Many Scots deplore that the missed opportunity is an industry built on oil funds. Statoil has become the backbone of Norwegian industry, and today, the shipbuilding industry is still booming.

In contrast, Scotland welcomed foreign oil companies but failed to obtain production in key sectors. The country has never produced a major seismic exploration giant or a large drilling company. No Scottish Schlumberger or Halliburton made valves and wellheads, motors and pipe connectors. Scotland can claim that there is only one local oil billionaire who founded a service company.

"If you look at the major operators in the North Sea-Shell, BP, Total, Equinor, Apache, CNR-they are basically based in other countries. Unite union industry official John Boland (John Boland) Said: "The only thing that can be said to be a bit British is BP, which is American. "Money always returns to the base." "

"Scottish oil fields are mainly composed of things we have to import, but we maintain and take care of them," Winchester said. To make matters worse, the installation was also done by foreign companies such as Stork, headquartered in the Netherlands, and Aker, headquartered in Norway.

The renewable industry represents the second opportunity in the Scottish Championship era, as Norway launched with the support of Statoil. But this is not the realization that Winchester saw.

"It's nice that people are coming to take advantage of our wind and our ocean area," Winchester said, "but again, the whole damn thing can bypass us."

Scotland is now gaining a foothold and becoming the world's leading offshore wind power industry. They are about to deploy thousands of megawatts of energy from deep-sea floating platforms tethered to the seabed.

As the deputy head of the Scottish government's energy industry, Andy Hogg oversaw most of the work of the company. The cost of wind energy has dropped significantly, and the price is now competitive with natural gas.

"We have a lot, we want more," Hogg said. But when it comes to manufacturing giant turbines, he said, "We don't have a competitive advantage in this area now."

International manufacturers-Vestas of Denmark, Mitsubishi of Japan and General Electric of the United States-dominate the market, and he sees no easy way to catch up.

"We are very slow to deploy it, and we are very slow to capture the value chain," he admitted. Foreign developers and original equipment manufacturers coordinate orders to effectively control the supply chain. "As a result, we lost a lot of jobs."

Hogg also hopes to see Scotland compete further in the value chain, manufacturing foundations, turbine towers and cables. But he said that in this labor-intensive job, it is difficult to compete with low-cost producers in the Middle East and China.

Hogg said that as companies compete for contracts to build wind farms along the coast, Scotland is now attaching enforceable requirements to developers to prove that their supply chain includes domestic manufacturing.

Union representative Bollan said: "We have been asking for this for at least five years." "Every time the Scottish manufacturing industry actually bids, they actually don't get the contract."

When asked about green jobs, City Councillor Horton pointed out that the new partnership with BP is expected to create 700 highly skilled jobs in the field of hydrogen production.

But he is even more excited about the export value of the booming hydrogen market.

"Even if we don't add hundreds of thousands of jobs in the country, we can maintain it," he said. "But there are thousands of people in your factory, your huge, heavy smoky industry-that's not really here."

Horton added that the oil industry in Guyana and Suriname is booming, and he said high-skilled oil and gas workers in Scotland can go there. For those who stayed, “It’s not just about building a manufacturing farm for wind turbines, or building a hydrogen center and maintaining it. The entire economy also revolves around it.”

Jeff J Mitchell/Press Association via Associated Press Picture

Chief Minister Nicola Sturgeon opened a new innovation center in the oil and gas technology center in Aberdeen, Scotland on October 2, 2017.

The North Sea boom did give birth to at least one Scottish oil billionaire. Sir Ian Wood, who founded an oilfield services company, ran Aberdeen’s energy transition for 40 years before leaving, and he seemed to embody this.

"We are in transition. The word "transition" has become a magic word," Wood told Prospects. "In any aspect, we have not established a truly strong manufacturing base. We are now back to trying to develop our service capabilities in transition activities."

In 2015, Wood took over an economic development agency in northeastern Scotland and provided it with funding to launch the Northeast Opportunity (ONE), a “private sector catalyst” that strengthens life sciences, tourism, food, beverages and the digital economy.

Wood admitted that there may be fewer jobs in the renewable energy sector than in the oil and gas sector, but he is very optimistic about the overall situation of the industry. "To be honest, this is like the early days of offshore oil."

ONE has provided funds to Kindness Bakery, lending them funds for automation to complete larger orders. It is sponsoring a new food festival that will introduce participants to regional ice cream production. A new biological center is expected to make Aberdeen "one of the most dynamic life science bases in the UK".

The same sentiment enveloped the city. By issuing bonds on the London Stock Exchange, the Aberdeen City Council funded a new concert center. They hope to attract crowds because the facility has the largest standing capacity in Scotland. Sanguinetti said that the port’s wider berths are suitable for offshore wind energy service vessels and are also built to accommodate large cruise ships.

This ancient shipbuilding town was transformed around offshore oil in the 20th century. If Aberdeen successfully transforms around services, tourism and consumption, the city’s income may be boosted by the export value of renewable fuels and the storage of imported carbon in large submarine real estate.

It may also continue to drain high-skilled workers. The British have a better term for "layoffs", which is a euphemism for firing surplus labor. It is becoming "redundant".

"Fundamentally, the Scottish government has failed to develop a meaningful industrial and manufacturing strategy for Scotland," said Labour MP Lennon. So far, in her view, these plans are short-term, passive, and cannot ensure that "workers who transition from some of the most polluting industries will not be left on the waste dump."

Currently, oil drilling is not over yet — in fact, a report by Resta Energy this year found that the United Kingdom provided the best financial conditions for ongoing oil exploration and defeated Kuwait — nor did it provide workers with a fair transition. .

Wood said that naturally, drilling and new exploration must continue now, because if the UK stops producing oil and gas, it will import from countries that don’t pay much attention to reducing emissions.

He shook his head, very worried. "I mean, if we do something that people want us to do, which is to stop the production of oil and gas, we will destroy the environment."

Lee Harris is a writing researcher at The American Prospect.

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