Taxpayers '˜could face huge North Sea burden'

UK taxpayers could be liable for a significant share of the North Sea's multi-billion pound decommissioning costs over the next 40 years, according to a new study.

Oil drilling platforms in the Cromarty Firth. Picture: Andy Buchanan
Oil drilling platforms in the Cromarty Firth. Picture: Andy Buchanan

The GMB union said its research into oil and gas fields across the UK Continental Shelf suggested an increasing financial burden will be placed on the Treasury in the form of tax refunds to oil and gas companies.

Average costs for North Sea decommissioning expenditure are growing by 14 per cent a year, with the final figure now expected to be more than £100 billion, said the report.

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The GMB called for the UK and Scottish Governments to bring forward an urgent investment programme to get Scottish ports and fabrication yards “decommissioning ready”.

The union’s Scotland Secretary Gary Smith said: “If we don’t act fast then it could mean the worst of all worlds: A chance to boost economic and employment prospects gone and the taxpayer paying for the clean-up of the North Sea while other countries profit from decommissioning at our expense.

“The taxpayer is sick and tired of dishing out billions of their hard earned money in subsidies to corporations with little to no return, so doing nothing at both the UK and Scottish Government levels by ‘leaving it to the market’ is simply not an option.

“GMB Scotland is very clear that the economic, political and moral arguments for government intervention are compelling and with the Autumn Statement and Scottish Draft Budget on the immediate horizon, the time for politicians to act is now.

“All of us are going to pay for North Sea decommissioning so the least that our governments can do is to take the appropriate action to ensure more of our own money is redistributed back into our economy and not into the pockets of largely overseas-based oil and gas contractors.”

Lang Banks, director of the environmental group WWF Scotland, said: “The GMB are absolutely right to highlight the massive liability facing UK taxpayers in order to clean up the mess left behind by North Sea oil and gas industry. Having made hundreds of millions of pounds in profits over the past few decades, the costs for decommissioning old rigs and restoring the marine environment should be being fully covered by the companies themselves.

“In the interests of tackling climate change we need to see an end to all Government subsidies and incentives that encourage new fossil fuel extraction, including North Sea oil and gas. Instead we need to see investment by UK and Scottish ministers in the development of oil and gas decommissioning facilities and the continued acceleration of renewables right across Scotland.”