Leader comment: This could be North Sea oil's lasting legacy

Wealth created by this key industry should be used to prepare for a zero-carbon future.

Employing 120,000 people and generating £1.2 billion in tax revenue last year, the North Sea oil industry is an economic powerhouse that helps pay for essential public services.

The 2014 oil price slump hit the sector hard but, despite this, it still plays a vital part in keeping the lights on in Scotland plc.

But, as The Scotsman reports today, there may be trouble ahead with exploration for new deposits hitting a 50-year low.

The North Sea remains a key part of Scotlands economy, but just four exploration wells were started in the first eight months of the year. Picture: Getty

It is estimated that capital investment in the sector will be just £5.5 million this year, down from £15 million three years ago. Deirdre Michie, chief executive of industry body Oil & Gas UK, warned the industry was at a “crossroads” after “emerging from one of the most testing downturns in its history”.

The world will eventually stop using fossil fuels because of the need to prevent dangerous climate change, but also because of the growing awareness of how bad air pollution is for human health.

Another factor is the falling price of renewable energy, particularly wind and solar. Sir Richard Branson, who is involved in Formula E electric racing cars, has predicted that electricity will eventually become virtually free within about six decades. But before such a future arrives – if ever it does – there is a window of opportunity to use the wealth created by North Sea oil to prepare for it.

And that is something that applies to both government and private companies. Oil companies are already looking to diversify in a continuation of a natural process. After all, Shell started life in 1833 importing seashells to the UK before it became part of the firm we know today as Royal Dutch Shell.

There might be some environmentalists who dream of ending the use of fossil fuels virtually overnight, but what is needed now is a sensible, managed transition.

The move to a different kind of economy will clearly present significant challenges, but there will also be huge opportunities. The trick will be to overcome the former and grasp the latter – before someone else does.

Scotland’s weather is not without its critics; Atlantic storms can bring enough horizontal rain to dampen the enthusiasm of the most committed cyclist on a touring holiday in the Highlands. But the extraordinary amount of wind, wave and tidal energy surging around this country is one such opportunity and we must take it.