Cambo oil field decisions not the only bad news for Big Oil – Dr Richard Dixon

It has been a bad couple of weeks for the oil industry.

Environmentalists are challenging the legality of UK state subsidies for the fossil fuel industry (Picture: Danny Lawson/PA)
Environmentalists are challenging the legality of UK state subsidies for the fossil fuel industry (Picture: Danny Lawson/PA)

Shell pulled out of the Cambo proposal and then the proposers, Siccar Point Energy, had to put it on hold.

Shell’s contribution for their 30 per cent stake was expertise in deep-water drilling, with their staff placed in Siccar Point’s office, to help manage the project.

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When one of the world’s biggest oil companies abandons your project because it is looking uneconomic, it is pretty unlikely any credible oil company is going to be interested in picking up their share.

The oil industry’s immediate reaction was to try to claim this was a disaster for jobs, once again bandying about inflated figures for employment in the industry.

The figure of 100,000 workers is often quoted but the number of workers who need to move from fossil fuels to clean energy jobs over the next decade is around 40,000, and a strong drive for renewables and energy efficiency can create several times that number.

It is not just the company behind Cambo that has been having a bad week.

The High Court in London heard from three activists in the Paid to Pollute case. They are challenging government subsidies to the oil industry which will prolong the life of fossil fuel developments.

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The industry hates all those lovely tax breaks being called subsidies, so let’s do it again – there are massive subsidies going to the oil industry from the UK government, so much so that BP and Shell paid no corporation tax on oil and gas production in the last three years while continuing to pay out dividends to shareholders.

Also at the High Court last week was yet another challenge to the UK government for its financial support of fossil fuels, this time over $1 billion of funding for a liquified natural gas plant in Mozambique, despite objections from members of the Cabinet.

The UK government, in the run-up to COP26, announced that it would stop funding overseas fossil fuel projects. But this didn’t include schemes already in the pipeline like the one in Mozambique so our sister organisation down south took them to court. The case has also sparked an inquiry by the Dutch government into their own funding of the project.

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Verdicts in both court cases are expected in the new year.

Finally the UK and Scottish governments’ official advisers, the Committee on Climate Change, confirmed that they are looking at whether oil developments are consistent with climate targets. It is hard to imagine that they will conclude that business as usual is in any way appropriate. They are expected to report early in the new year too.

What the demise of Cambo and the ongoing legal threats show is that we need to urgently get on with the transition from high-carbon jobs to zero-carbon jobs. This is a job for both the UK and Scottish governments, working with the communities and workers affected.

After Christmas, the Scottish government is going to start consulting communities, unions, workers and industry to produce a draft Just Transition Plan for the energy sector before the summer.

If we are lucky, 2022 could be the year we finally get serious about getting out of oil and gas.

Dr Richard Dixon is director of Friends of the Earth Scotland

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