Tavish Scott: North Sea still full of huge opportunities

As we prepared to leave, the Norwegian noted that the pier we were standing on was constructed out of a disused oil platform. “Brent Spar – you may have heard of it.”

Brent Spar was the cause celebre of oil rig decommissioning. Back in 1995, Shell wanted to dispose of the oil storage buoy by dropping it on to the deep seabed of the Atlantic. John Major’s government said yes but didn’t contend with an environmental and political firestorm. German Chancellor Helmut Kohl told Major at a G7 summit in Canada that this really wasn’t acceptable.

Shell was forced to pull its plan and keep Brent Spar in a Norwegian fjord until it devised a plan to recycle the steel into sections of a vast pier that now comprises part of the offshore industry’s facilities near Stavanger. The international fallout resulted in regulations which mean that the oil industry has to remove what it has placed in the North Sea over the past 40 years.

Having established this principle, it is inconceivable that governments and environmental pressure groups are going to change their position.

If Chancellor Merkel can re-write German energy policy overnight and abandon civil nuclear energy production then the idea that the EU will accede to deep sea disposal of oil rigs is naive.

Sensibly, the oil industry knows that, so the challenge is how to dispose of these facilities when they come to the end of their working lives in as safe and cost-effective a manner as possible.

Cost does matter to you and I as taxpayers. The UK Treasury provides tax relief to oil companies for decommissioning oil and the potential bill is at a scale to make the national deficit numbers relative. It is estimated the cost of North Sea decommissioning could be £36-£50 billion up to 2050. So the UK taxpayer faces a hefty level of financial exposure towards this clean up.

BUT there are two very big upsides to all this work. The industry is aiming to recycle 98 per cent of the steel, concrete and other material that it removes from the North Sea. A total of 98 per cent would be a fantastic achievement, particularly for an industry that needs a positive story to tell. Norwegian decommissioning is already hitting this target.

Decommissioning means hundreds of thousands of tonnes of steel and other materials that will be re-used for one project or another.

Some oil rigs will be refurbished, reengineered or reconstructed to do a different job either in the North Sea or elsewhere around the world.

All this work means jobs and as the UK taxpayer is picking up the bill, it’s only right that the contracts for this work are placed in UK ports and harbours.

It’s all about geography. Ports on the east coast of England are well positioned to win work in the southern North Sea.

But in the northern North Sea, particularly to the north east of Shetland where Shell’s enormous Brent platforms live, the key factors are weather windows and the location of the closest landfall. Shetland was the right location in the 1970s when the industry needed an oil terminal.

Now 40 years on, the islands are well placed to help take apart some of the most massive industrial structures that exist across the world today.

Decommissioning is an enormous economic opportunity for Scotland and we should grasp it.

• Tavish Scott is the Liberal Democrat MSP for Shetland