The Offshore Horizon: unions and the future of Oil and Gas

As the debate develops on the future of offshore work, our policy team considers the role for workers, unions, companies, and the Scottish Government.

The Scottish Affairs Committee is undertaking an inquiry into the future of oil and gas. It comes as the number of jobs related to the oil and gas industry has fallen by 160,000 between 2014 and 2017. Further losses are predicted in the next ten years.

Companies have also used the downturn to move from a shift rota of two-weeks on, two-weeks off to three-weeks on, three-weeks off. This raises potentially serious health and safety concerns, including fatigue and increased potential of severe accidents.

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The Scottish Affairs Committee is seeking submissions to their inquiry

Our response makes clear that the Offshore Coordinating Group, made up of Unite the Union, RMT, GMB, Nautilus and Balpa, need to be given a central role in outlining workers’ concerns to industry and Government.

Those on the front-line recognise the need for both short-term assistance and long-term strategies. Yet the UK Government has not delivered effective measures to help offshore workers affected, nor has it produced comprehensive strategies for decommissioning and transitioning to renewable energy sources.

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Standards in the decommissioning sector are deeply concerning. The sector receives significant tax relief from Government, and yet offshore unions have received reports of sub-minimum wage pay rates on specific projects. Rigs are often towed to Bangladesh and Indian beaches where there are serious concerns around environmental and labour regulatory standards. Earlier this year the Scottish Environmental Protection Agency (SEPA) prevented three rigs being towed from Cromarty Firth to South Asia due to environmental concerns. Scotland has a number of perfectly suitable, high-quality decommissioning sites, but unless Government takes steps to improve standards, hedge fund-backed companies will still seek to exploit lower regulatory standards on the other side of the world.

Similarly, to date, renewable energy developments in Scotland have been dominated by the big energy companies, developers and large landowners, and the green jobs boom has not appeared to the extent promised. Where green jobs have been created, they are too often poor quality and non-unionised. Worryingly too are the dramatic falls in the rate of investment in low-carbon energy, as reported by the House of Commons Environmental Audit Committee.

Screen Shot 2018-06-04 at 15.05.30The announcement by the Scottish Government to create a Just Transition Commission provides an opportunity to rectify this. It must drive forward a proper Industrial Strategy that supports offshore workers and the development of renewables and decommissioning in a way which captures value within the Scottish and UK economy, supports post-industrial communities, and provides good quality, unionised jobs. To do so it must be established with an ambitious remit, a long-term vision and a suitably independent role. It must also have worker engagement at its core.

We would urge the proposed Scottish Government-owned energy company to focus on energy generation, such as offshore wind, rather than simply the retail side of energy supply.

In this transition, lessons must also be learned from North Sea oil, in which the profits were all but captured by private companies. The UK’s experience in this regard is in stark contrast to countries such as Norway, where publicly owned-energy companies have provided returns to Governments’ and taxpayers for decades.

To this end, we would urge the proposed Scottish Government-owned energy company to focus on energy generation, such as offshore wind, rather than simply the retail side of energy supply. Such a model could help companies such as Bifab, who provide the jackets for offshore wind and be an important step towards the extension of public ownership throughout the system.

Alongside municipal energy companies which promote energy efficiency, district heating and low-carbon electricity generation, Scotland could transform its energy system in the coming decades.

However, if it is meet its climate targets and provide good quality unionised jobs, then radically different models to the current privatised system need to be considered as a matter of urgency.

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