Westminster parties rerunning of the referendum makes them look fools!

I suppose given that I’ve written previously about so many similar instances I really shouldn’t have been surprised when I read that an organisation called “Social Investment Scotland” was doing a deal to help fund a developer of low carbon projects install an Australian developed micro combined heat and power unit (MCHP) on initially seventy but potentially up to three hundred and fifty properties across Scotland with a view to helping residents reduce their fuel bills. 

The company producing the MCHP is Ceramic Fuel Cells Ltd and according to their website they were spun out of the Australian Government's Commonwealth Scientific & Industrial Research Organisation (CSIRO), their corporate head office and research and development facilities are in Melbourne and they have a fuel cell assembly plant in Heinsberg, Germany and a ceramic powder plant in Bromborough in the UK. 

So perhaps not surprised but just downright gobsmacked that once again we have let an international competitor steal a march on us in an important area of technology.   It’s perhaps even more frustrating because I know that at least two of our universities have specific recognised expertise in fuel cell technology. In fact a few years ago one tried to commercialise a ceramic fuel cell but as is often the case in Scotland, couldn’t get together the funding.

So why raise this now?  Well it’s simple.  I’m truly fed up to the proverbial back teeth with Westminster unionist political parties ranting about how badly the economy of an independent Scotland would have been affected by the rapid and unpredicted fall in the oil price and wasn’t it a wonderful thing that the sensible Scots voted against independence.

Now if the unionist army of doom merchants had told us before the independence referendum that the oil price was going to collapse I’d be a bit more generous but on the steam radio recently even Ian Wood – in no sense someone I consider an independence supporter – said  "Frankly, no one foresaw the oil price coming down from $100". 

Now given Wood is Westminster’s favourite oil and gas guru then we should believe him and so should all those miserable, childish and generally incompetent unionist politicians who would prefer to re-run the independence referendum than beat George Osborne round the head to make him get on and sort out a new and sensible oil and gas fiscal setup now instead of waiting for budget day in March.    The industry knows what’s needed. So why the heck doesn’t Osborne do as he’s told instead of insisting on yet another consultation.  More delay, more of Danny Alexander pretending he knows what he’s talking about.   I really can’t take these people seriously anymore and I’m afraid the opposition isn’t any better. 

Demanding a “£10m resilience fund” to help struggling companies is a joke.  £10m in an industry the size and value of oil and gas is a drop in the ocean.  If they wanted to do something serious how about proposing the Bank of England set up a Quantitative Easing fund directed specifically at say, increasing exploration or stepping in to pick up industry funding when the lousy banks start pulling the plug on the loans they’ve made to both operators and supply side companies.   Not specifically my idea by the way but one that bears consideration.

Anyway, I was talking about fuel cells which are just of course one sort of technology Scotland should be active in but there are plenty of others. 

As an example, Scottish Renewables told me recently that there are 196 operational wind farm projects in Scotland with 2,590 turbines making a total installed capacity of 4,966MW.  At a cost of roughly £1.5m per MW installed then a quick back of the beermat calculation suggests implementing a policy to build windfarms has increased Scotland’s trade deficit by around £7.5bn!

I don’t know how large the overseas market is for companies such as the Danish wind turbine builder Vestas but a good guide is that with 13% of the market they turn over around 5bn Euros and employ some 17,000 people.   Would have been nice to have had a Vestas based in Aberdeen to add value to our economy and provide an alternative source of high value adding jobs.

Other parts of the renewables sector aren’t fairing much better whereas one might have thought that by now it would be humming. It’s not as if we don’t have the intellect or the engineering and scientific capability because we know we do and that should have been used to build up the Scottish economy to the point where oil and gas was just something else in our economic armoury.

But the sad fact is that even since I came into the oil and gas industry in 1974 Scotland has lost its aircraft building sector, most of its civil shipbuilding and a large chunk of its military shipbuilding capacity, its car manufacturing and other elements of what once formed a formidable industrial sector including of course steel production. 

This is hugely difficult to replace and whilst there were attempts to develop new sectors such as electronics this has largely only resulted in the establishment of small or medium size companies working in specific niche areas.  For example, Scotland has a company that builds micro satellites. 

It’s dynamic, innovative and technically highly advanced but it only employs around 30 or 40 people. I’m not belittling it because I think it’s a great company but its size illustrates the scale of the problem in building up a higher value more broadly based industrial economy.

Now I hate to mention this but this decline all actually took place under Westminster’s watch.  So if those unionists are right and Scotland couldn’t withstand the collapse in the oil price then it’s obviously their fault. 

They allowed and in some cases deliberately invoked policies that resulted in Scottish industrial and economic decline.  Even in the oil and gas sector they pretend they’re so passionate about then according to Strathclyde University we ended up with a situation where poor levels of investment and an utterly lunatic attitude to foreign ownership has resulted in 80% of all post-tax profits being remitted overseas.

Frankly, Westminster by rerunning the referendum arguments on oil price is shooting itself in the foot: no, both feet.  Maybe they should just keep quiet and get on with the business of restoring confidence in the future of the oil and gas industry if indeed that’s what they really want which I have to say I sometime doubt.

©Dick Winchester Jan 2015  

(First published in the Press & Journal Energy Supplement Jan 2015)

The Future Is In No Sense Rosy

This is difficult. I really don’t want to appear pessimistic about the future of the UKCS but I’m really struggling to say anything positive that I can put my hand on my heart and say I genuinely believe.

I’ve lived through every downturn since the early 1970s but this time, it’s different and if we don’t accept it's different then the outcome could be really dire. In fact it may be dire anyway.

As a member of the Scottish Government’s Oil & Gas Commission I helped put together a report which I believe was far more comprehensive than Wood’s in that it looked in depth at things like R&D support, the supply chain impact and the whole fiscal setup.  That said, both reports painted a similar and not very pretty picture of the UKCS’s prospects. 

Inevitably then, both reports made somewhat similar recommendations although the Scottish Government report put considerably more emphasis on the importance of maintaining the supply chain and developing a different way of looking at the UKCS based more on the total value of all activities rather than just how much tax revenue the operators paid.

Without doubt, when we completed this report we could still see a way forward but now we might as well tear them both up and start again because the fall in the oil price has changed absolutely everything and much more dramatically than we seem prepared to accept.

To appreciate the difference then consider this: the Scottish Government’s recent oil revenue forecast is for between £2.4billion and £15.8billion over the four years to 2018/19, compared with forecasts of £15.8-38.7billion made in 2014.

That’s a massive and unprecedented fall.

What the industry and government needs to get their heads round is that, whilst some have said recently they think we’re in for a $60-65 oil price for the next couple of years, but it will go up after that are almost certainly being far too optimistic.  

Personally, I think that given current evidence it’s extremely unlikely the oil price will rise significantly anytime soon and there’s actually a very good case for arguing it could fall back.

Why?

Well firstly, I don’t believe the Saudis in particular are going to do anything that might encourage more investment in US shale oil and will regulate their production accordingly.

Secondly, global economic growth remains stuck in a rut and there are genuine concerns over China and the possibility that its growth bubble could burst.

Third, we’re using less oil anyway and there is increasing political pressure over climate change that will lead to even lower use sooner rather than later.

In addition, there are other factors creeping up to bite the UKCS on the rear end.  For example: an impending deal with the Iranians over their nuclear programme and the subsequent lifting of sanctions.

It is already known that Shell and BP have been discussing re-entering the Iranian oil business if the sanctions are lifted because it offers a more affordable and therefore more profitable opportunity than the UKCS.

Oh and there’s Greece which if by the time this piece is published still hasn’t sorted its problems could have a major effect on EU confidence.

Also - what happens if the USA decides to go ahead with exporting shale oil?  If supply goes up then the price most certainly won’t and that’s more bad news for the UKCS. 

The long and short of it is that the North Sea is facing an increasingly unclear future which isn’t actually helped by the lack of a coherent UK energy policy or as yet, any real indication as to what chancellor Osborne intends to do about exploration or other incentives.  

Actually, those incentives to explore even if on a par with Norway may not now be enough. I’m now of the opinion that even reducing taxation to standard corporation levels may actually not be enough.

Without wishing to appear overly dramatic it could well be that what we’re seeing is actually the beginning of the end game for the UKCS arriving far sooner than any of us anticipated.

There are some field development programmes in progress where capital has been committed and these will provide jobs for some time to come. Similarly, a few contractors are picking up some lucrative overseas jobs which will also provide jobs for a reasonable period of time and agencies such as Scottish Enterprise should help them seek out more of those. 

However, the likelihood of achieving that ultimate goal of 23billion barrels is looking somewhat “iffy”.

I think we really need to be honest with ourselves as an industry.  To achieve the real production potential of the UKCS we need – as Professor Alex Kemp said last year - investment, technological innovation, effective regulation and tax incentives.

Of those, at the current oil prices I can only see tax incentives as being the most likely to be implemented. But how far they’ll go and whether they’ll have any real impact is anyone’s guess. Effective regulation can of course only be implemented if the tax incentives catalyse some degree of recovery in investment.

Of course, the real tragedy of all this is the huge loss of potential caused by the rising loss of mainly highly skilled jobs because I just wonder what on earth all those people will do now. 

Some will be lucky and find new positions but in an industry where the problems are global and the job losses are absolutely not just restricted to Aberdeen or the UK then this is not going to be easy.

Can people shift to other industries? 

Well not in Aberdeen they can’t because, as Energy has warned many times before, there has been nothing like enough diversification to create the number of highly skilled jobs needed. Oh and believe me, pedestrianising Union Street isn’t going to make a difference.

Irrespective of how the next year or so develops what we need to do now is set up a “what does Aberdeen do next?” initiative, but with some fresh thinkers; not the ‘usual suspects’.

I’d suggest ACSEF should run it but they’re about as useful as a chocolate fireguard so maybe Aberdeen and Aberdeenshire Councils should do something between them perhaps in league with the Chamber of Commerce. 

We need a viable strategy to start making that transition away from oil & gas and onto whatever we can do next and the sooner the better.

Because, if my instincts are right then we don’t have a lot of time left to think about it.

Sadly of course, due to Westminster’s latest piece of ideological tomfoolery that strategy probably needn’t include manufacturing wind turbines, or towers, or components of any kind!

(First published in the Press & Journal Energy supplement July 2015) 

© Dick Winchester July2015

Is Aberdeen ready to let the fishing industry back in? It might have to.

The world around us is changing so rapidly that new opportunities are popping up now almost daily.  Innovation is the key of course.

Some of the stuff that appears in my inbox from all over the planet is just astonishing.   Investing in research – academic or otherwise – is or should be a top priority for any government that cares about the future of the country it runs.

But at the same time, what we, the UK, used to consider as major opportunities are now fading or have disappeared altogether often due to our own stupidity.

Some – such as shipbuilding - we made little effort to modernise or invest in and so deserved to lose despite there still being a huge market for ships of all sorts.

Others have or are being strangled by market conditions as we’re now experiencing with oil & gas  but there are even more that we’ve made little or no attempt to become involved in and I want to look at the latter a little closer.

With the Offshore Europe exhibition and conference coming up it may seem inappropriate to be writing about anything but oil & gas but I believe that there are plenty of people who now understand the severity of the downturn without me adding any more to the discussion than I have previously.

Inverness based economist Tony MacKay summed the situation up perfectly very recently when he said of the North Sea: "The industry's not expecting any significant increase in oil prices and I think we therefore have to accept that the boom in Aberdeen is over."  

A neat enough summary and one which I’d like to think would spark some reaction from those that continue to insist that what we’re experiencing is just another small dent in the industry’s timeline.

Moving on though I was surprised recently to learn that Inverurie – a town near where I live in Aberdeenshire – has 10,000 250W solar panels.

It’s apparently a record. No other region in Scotland comes close.   But then I thought how depressing it was that not one of those solar cells would have been manufactured in Scotland.
 

Other useful data published recently by Scottish Renewables suggests that throughout Scotland there are some 660,000 250W solar panels,  2,557 small wind  turbines, 204 hydro-electric schemes and three anaerobic digesters.

I’ll bet that little of that will have been manufactured in Scotland either, and of course those figures don’t include the huge number of big commercial wind turbines, all of which are imports.

Ever heard of the Hydrogen Office in Methil? It’s a demonstrator for a range of technologies using electricity generated by wind and solar to power a hydrogen electrolyser. The hydrogen produced will be stored and used as a fuel source for hybrid commercial vehicles (HCV) powered by fuel cells and diesel engines.

Whilst it astonishes and disappoints me that not one of the technologies being demonstrated there is manufactured in Scotland and most aren’t even manufactured in the UK, it reinforces my view that the decarbonising of the energy system is well on its way and that we simply can no longer afford to ignore it.

It also tells me that there is potentially a huge opportunity here for all those highly skilled and very talented engineering and science graduates, experienced managers and administrators, recent graduates and young technicians losing their jobs in the oil & gas  industry to do something different and – importantly – long term.

That is of course dependent on a number of things.  Firstly, the shouty flat earth oil industry will never die brigade being patted on the head and ignored and secondly developing a strategy that can be picked up and turned into viable and fundable businesses by entrepreneurs whether those funds come from public or private sources or indeed both.

Scotland, and particularly Aberdeen, has the skill sets to do all these things and lots more. However one thing that bemuses me somewhat is the apparent lack of university research activity particularly when it comes to genuine original thinking

Compared to some of the energy research going on in the US and Continental Europe, Scottish universities are just bit players.

Of course there’s been some good work done, for example, St Andrews fuel cells and Glasgow hydrogen production, although very little has been commercialised.

Despite being located at the heart of the energy industry even our local Aberdeen universities seem not to have really grasped the clean energy opportunity as comprehensively as they ought. Or, if they have then they’re poor at publicising it.

Make no mistake there are huge opportunities here and particularly in areas such as hydrogen production.

The Japanese are working on an idea I proposed a couple of years ago as a development exercise which would have used surplus energy from the planned Aberdeen offshore wind project of which Energy’s editor was a director and which remains stalled by the Trump organisation, to power a bank of offshore electrolysers to produce hydrogen which could be pumped ashore and stored either as ammonia or ammonia boron.

That could then be used to fuel conventional or gas turbine generators when wind power output is low. It could also be used to power fuel cell vehicles or even in a conventional internal combustion engine.

So, could we develop a design for small scale ammonia production plants?

As far as the electric vehicles themselves are concerned there’s a Norwegian company that builds a small, commuting EV.  Are we saying we couldn’t do something similar?  I think we could and a conversation recently with a former Smiths Electric Vehicles design engineer confirms that.  It’s not rocket science.  It’s good practical engineering and Aberdeen is good at that.

Add in things like “passive house” design and manufacturing, CO2 recycling into new products, synthetic biology and chemistry, algae oils, biofuels, fuel cells, use of simpler prototyping (eg 3D printing of fuel cell components), clean fuelled engines, more efficient generators and motors and even solar using techniques such as automated printing and you begin to see that our options are actually far larger than we might think.

What’s more, these are only scratching the surface of what’s possible.  There will be more technologies evolving as time goes on and we should be at the forefront of both discovering and commercialising these. What for example can be achieved using new material such as Graphene?

However, we need to accept that with some technologies we are unlikely now to become players in.  Wind energy technology in particular is a lost cause.  We threw that opportunity away in the 1980s when the electricity industry was privatised. 

No strategy, no vision, no ambition.  A wasted opportunity that could have led to a large scale high value manufacturing business such as the Danes have.  A business employing 17,000 people with a turnover of £4billion (5billion euros) would have been more than nice to have!

Wave technology is still being pursued – wrongly in my view – and as far as tidal is concerned we do now have at least one or two companies making some progress in developing small scale units.  However, the main tidal projects at the moment are using Austrian/Norwegian and American-built turbine systems.  It’s another sector we should be dominating but aren’t. 

I could write a list of technologies and ideas as long as my arm that we could be tackling in the Granite City and its hinterland if we had a mind to. 

So here’s an idea.  I’ve already suggested to Aberdeen Chamber of Commerce they should consider a “What does Aberdeen do next?”  conference/debate/seminar and it should embrace local interested parties including perhaps the universities as a means of drawing them into being an integral part of any strategy. 

The objectives should be to demonstrate that there is more to life than oil & gas and that we must begin that transition to another energy age now and not in another year or two. We need to talk about the opportunities that brings and we need to be radical. 

At the risk of being politically jumped on from a great height, having been following their technical progress I’d now even include the idea of Small Modular Reactors that use up all the waste fuel from large scale fission reactors.

Reading the engineering reviews these devices seem scalable between 10 and 30 megawatts and are amazingly efficient, apparently leaving almost negligible waste. They’re also “factory maintained” so you unplug them and send them back to the factory for overhaul and refuelling. 

There is no comparison possible between this technology and the old fission reactors built in Scotland. They’re as different as chalk and cheese and rejecting the idea because “they’re nuclear” would be ludicrous.  Oh and they can’t be used for nuclear weapon production either!

Be good wouldn’t it if Aberdeen became a centre for small scale nuclear engineering as well as other clean technology production?

We also need to get agencies such as Scottish Enterprise on board. Recently I was sent a copy of a SMART feasibility call offering funding of up to £100,000 to help develop an innovative and efficient mobile hydrogen refuelling infrastructure for Scotland's islands and remote communities.

It’s not saying it wants to develop the technology to refuel vehicles just come up with a plan to install refuellers none of which are of course manufactured in Scotland.

 I’m sorry but that’s simply not good enough.  With that attitude you’ll need to learn how to make fishing nets in Aberdeen because fishing might be all that’s left to do, if trawlers are allowed back in, once the oil opportunity has been screwed up.

(This article was first published in the Press & Journal "Energy" supplement on 7th Sept 2015)

©DickWinchester Sept 2015

The Future Is In No Sense Rosy

This is difficult. I really don’t want to appear pessimistic about the future of the UKCS but I’m really struggling to say anything positive that I can put my hand on my heart and say I genuinely believe.

I’ve lived through every downturn since the early 1970s but this time, it’s different and if we don’t accept its different then the outcome could be really dire. In fact it may be dire anyway.

As a member of the Scottish Government’s Oil & Gas Commission I helped put together a report which I believe was far more comprehensive than Wood’s in that it looked in depth at things like R&D support, the supply chain impact and the whole fiscal setup. That said, both reports painted a similar and not very pretty picture of the UKCS’s prospects.

Inevitably then, both reports made somewhat similar recommendations although the Scottish Government report put considerably more emphasis on the importance of maintaining the supply chain and developing a different way of looking at the UKCS based more on the total value of all activities rather than just how much tax revenue the operators paid.

Without doubt, when we completed this report we could still see a way forward but now we might as well tear them both up and start again because the fall in the oil price has changed absolutely everything and much more dramatically than we seem prepared to accept.

To appreciate the difference then consider this: the Scottish Government’s recent oil revenue forecast is for between £2.4billion and £15.8billion over the four years to 2018/19, compared with forecasts of £15.8-38.7billion made in 2014. That’s a massive and unprecedented fall.

What the industry and government needs to get their heads round is that, whilst some have said recently they think we’re in for a $60-65 oil price for the next couple of years, but it will go up after that are almost certainly being far too optimistic.

Personally, I think that given current evidence it’s extremely unlikely the oil price will rise significantly anytime soon and there’s actually a very good case for arguing it could fall back.

Why?

Well firstly, I don’t believe the Saudis in particular are going to do anything that might encourage more investment in US shale oil and will regulate their production accordingly.

Secondly, global economic growth remains stuck in a rut and there are genuine concerns over China and the possibility that its growth bubble could burst.

Third, we’re using less oil anyway and there is increasing political pressure over climate change that will lead to even lower use sooner rather than later.

In addition, there are other factors creeping up to bite the UKCS on the rear end. For example: an impending deal with the Iranians over their nuclear programme and the subsequent lifting of sanctions. It is already known that Shell and BP have been discussing re-entering the Iranian oil business if the sanctions are lifted because it offers a more affordable and therefore more profitable opportunity than the UKCS.

Oh and there’s Greece which if by the time this piece is published still hasn’t sorted its problems could have a major effect on EU confidence.

Also - what happens if the USA decides to go ahead with exporting shale oil? If supply goes up then the price most certainly won’t and that’s more bad news for the UKCS. The long and short of it is that the North Sea is facing an increasingly unclear future which isn’t actually helped by the lack of a coherent UK energy policy or as yet, any real indication as to what chancellor Osborne intends to do about exploration or other incentives.

Actually, those incentives to explore even if on a par with Norway may not now be enough. I’m also now of the opinion that even reducing taxation to standard corporation levels may actually not work. 

Without wishing to appear overly dramatic it could well be that what we’re seeing is actually the beginning of the end game for the UKCS arriving far sooner than any of us anticipated. There are some field development programmes in progress where capital has been committed and these will provide jobs for some time to come.

Similarly, a few contractors are picking up some lucrative overseas jobs which will also provide jobs for a reasonable period of time and agencies such as Scottish Enterprise should help them seek out more of those.

 However, the likelihood of achieving that ultimate goal of 23billion barrels is looking somewhat “iffy”. I think we really need to be honest with ourselves as an industry. To achieve the real production potential of the UKCS we need – as Professor Alex Kemp said last year - investment, technological innovation, effective regulation and tax incentives.

Of those, at the current oil prices I can only see tax incentives as being the most likely to be implemented.

But how far they’ll go and whether they’ll have any real impact is anyone’s guess. Effective regulation can of course only be implemented if the tax incentives catalyse some degree of recovery in investment.

The real tragedy of all this is the huge loss of potential caused by the rising loss of mainly highly skilled jobs because I just wonder what on earth all those people will do now. Some will be lucky and find new positions but in an industry where the problems are global and the job losses are absolutely not just restricted to Aberdeen or the UK then this is not going to be easy.

Can people shift to other industries?

Well not in Aberdeen they can’t because, as Energy has warned many times before, there has been nothing like enough diversification to create the number of highly skilled jobs needed.

Oh and believe me, pedestrianising Union Street isn’t going to make a difference.

Irrespective of how the next year or so develops what we need to do now is set up a “what does Aberdeen do next?” initiative, but with some fresh thinkers; not the ‘usual suspects’.

I’d suggest ACSEF should run it but they’re about as useful as a chocolate fireguard so maybe Aberdeen and Aberdeenshire Councils should do something between them perhaps in league with the Chamber of Commerce.

We need a viable strategy to start making that transition away from oil & gas and onto whatever we can do next and the sooner the better. Because, if my instincts are right then we don’t have a lot of time left to think about it.

Sadly of course, due to Westminster’s latest piece of ideological tomfoolery that strategy probably needn’t include manufacturing wind turbines, or towers, or components of any kind!

 © Dick Winchester July2015

(First published in the Press & Journal "Energy" supplement July 2015)

Well that’s that - it’s over – and I mean it’s really over.

I’ve been living in hope in recent months that we might finally be getting our act together on two important issues.  The first being the stewardship of the oil and gas industry and the second the development of an indigenous renewables technology manufacturing industry.

Following the Scottish independence referendum the former will now remain in the hands of the UK Government who say they will follow the recommendations of the Wood Review including the establishment of the new regulator and revising the fiscal regime.   This will be worth watching because the proposed new style regulator will still be subject to the uncertainties and unpredictability of a Treasury that has a huge and growing public sector debt level to deal with!

However, I don’t want to dwell on the regulatory issue until the new setup has been properly established, the new regulator himself or herself appointed and the promised new fiscal regime agreed. Then and only then will it be possible to judge whether it’s going to work.

That said, I remain seriously concerned about one aspect of the propaganda used to persuade Scotland to vote against independence. During the run up to the referendum Ian Wood asserted very strongly that by 2050 production will have fallen to around 250,000 bbl/day which will of course considerably lower the tax take. 

Of course, he was assuming that between now and 2050 few if any new fields will be discovered or new technologies developed to get more out of existing fields.  In short, he’s saying the strategy he proposed in his own review will fail and that the figure the industry suggested and he accepted, of a potential 24 billion bbl is unreachable or was guff all along. Strong stuff.

However, putting aside for one moment the validity or otherwise of his argument what struck me is that if Wood is right then where’s his Plan B?  Thinking locally, there are around 900 to 1,000 companies and circa 100,000 people reliant on the oil and gas industry in Aberdeen and Aberdeenshire and on the basis of his forecast we could see most of those gradually disappearing over the next 35 years. In fact, Wood said “… the rundown impact will begin to be felt by 2030, which is only 15 years from now"

So the suggestion is that the Aberdeen economy will all but collapse as people’s jobs go and they inevitably move away.  Not all will go of course.  Some will have retired here and some will stay as part of a much smaller supply chain which is still operating internationally.

However, without wishing to be too brutal there is a very good chance that under Wood’s scenario Aberdeen’s economy will shrink dramatically although it may not quite reach the level it was at before the oil industry took off in the early 70s and anyway a lot of what we did then has already gone including shipbuilding and paper production

Of course this wasn’t inevitable. In its June 2014 paper on reindustrialisation the Scottish Government said “Manufacturing is also vital to capturing the opportunities from the transition to a low carbon economy. Traditional manufacturing and engineering skills - such as in the offshore industry or shipbuilding - are transferable to areas such as the manufacture of renewables technology or oil decommissioning.”

In short, it understood the potential of creating an indigenous renewables technology manufacturing industry and to help make this happen was proposing to set up a Scottish Innovation Agency and critically, a Scottish Business Development Bank.

But that’s no longer on the table and without a strategy like this Scotland let alone Aberdeen has little chance of doing anything other than providing the opportunity for others to take advantage of those natural resources which were made so much of during the referendum campaign.  Don’t treat that statement as scaremongering. It’s already a fact. 

There is no indigenous wind turbine manufacturer, we will soon be getting overseas built tidal turbines in the Pentland Firth and most Scottish and UK companies involved in renewables are dependent on foreign investment with many now even majority owned by overseas companies.

However, Wood’s answer to what he sees as Aberdeen’s looming economic problem was to use the recent annual Northern Star Business Awards as a platform to strongly criticise Aberdeen City Council over the “golden opportunity” missed when plans to transform Union Terrace Gardens were rejected.

He claimed that Aberdeen Council showed “virtually no sign” of recognising the economic challenges facing them – and claimed it was “unbelievable” the ambitious project was scrapped.

Now I can certainly support the former but with the best will in the world I still do not understand how on earth spending £140m or so on revamping Union Terrace Gardens would have any impact at all on Aberdeen’s economy and I never have.

Personally, if I had a spare £50m burning a hole in my pocket as Ian Wood seems to have I’d be investing some of it in a couple of university spin-outs I’m aware of and I’d start developing some ideas around high value added clean tech manufacturing. 

I remember clearly Ian Wood saying a couple of years ago that Aberdeen could become the Houston of the East. As I pointed out at the time this was going to be difficult because Houston’s economy is considerably broader based than Aberdeen’s. It didn’t have any of the electronics, pharmaceutical and the other none oil and gas industries that Houston had when Wood made this claim and of course it still doesn’t.

The choice is simple and here finally Wood and I are in broad agreement. We either start putting some real effort into developing a strategy for a post oil Aberdeen or the next generation faces a genuinely grim future. Wood is right that we can’t expect any help from Westminster although I believe we could have from Holyrood if the referendum had gone the other way. 

But there are things we could do and we could start with supporting AREG (Aberdeen Renewable Energy Group) which Wood to my knowledge never has and we could revamp ACSEF which is just another glorified property development programme.  We could also start applying some pressure to all those financial sector outfits that did so well out of oil and gas to make some sensible funds available to entice new industries to Aberdeen to partly replace the Scottish Business Development Bank proposed under independence. Maybe Ian Wood would like to chuck his £50m into that pot if it ever transpired! 

©DickWinchester - first published in the Press & Journal Energy Voice and on line - Oct 2014