The truth about North Sea jobs and why workers need a plan

The future of oil and gas jobs is being hotly debated as general election campaigning ramps up. From claims that time is running out to save “100,000 North Sea jobs”, to Sharon Graham, general secretary of Unite, warning that oil and gas workers cannot become “the coal miners of our generation”, the fate of the oil and gas workforce is as contested as ever. But how many jobs are there, and what is at risk?

Let’s get into the numbers. Data from the oil and gas industry shows that it supports around 30,000 direct jobs and 100,000 indirect jobs across the whole of the UK. Direct jobs are those specifically within the oil and gas sector, across disciplines including drilling, rigging, catering and scaffolding, and the majority of direct jobs are based in Scotland. Indirect jobs are jobs in the broader supply chain providing goods and services to the oil and gas industry. The sector is estimated to support a further 84,000 induced jobs, meaning those in the wider economy supported by oil and gas workers’ spending. For example, a job in a pub or cafe in Aberdeen frequented by oil and gas workers. 

The much-discussed risk posed to these jobs depends on what you think the future of the North Sea basin will look like. A range of sources, including the North Sea Transition Deal (NSTD), backed by Government and industry, and the UK Committee on Climate Change, all project declining employment in oil and gas regardless of the predicted levels of production from the basin. 

However, the extent of this decline is the cause for debate. The biggest factor in the models used to predict future oil and gas jobs numbers is future production projections. This is where the differences in the expected level of jobs decline come in – rather than use the regulator’s production forecasts in models, analysts have chosen a variety of different future production projections, which means they lead to wildly different, and potentially misleading, future job predictions.

In fact, much of what is said about oil and gas job predictions is misleading. Take, for example, the claim pervading Scottish political debate that 100,000 North Sea jobs are at risk. The report that underpins this claim does not specify that these jobs would be lost in Scotland (they are UK-wide figures). The figure also includes induced jobs, such as cafe workers. Finally, the analysis uses exceptionally high predictions for oil and gas production, which far exceed – in fact, are 1.5 times higher than – even the highest production predictions of the oil and gas regulator. As a result, this analysis risks inflating the predictions of job losses in oil and gas. There are also serious questions around the report author, Stifel, their links to the oil and gas industry, and the conflicts of interest these raise. 

Even the more robust projections from academics at Robert Gordon University, which predict a decline of around 30,000 jobs being lost over the next decade, are based on production projections that are 20% higher than the Government’s own.

The truth is actually scarier than the one being painted, because jobs are already in steep decline, and have been so for years, and the lack of a credible transition plan is stark. The number of jobs supported by oil and gas has more than halved in the past decade despite the government issuing hundreds of licences in this period. And analysis projects that new oil and gas licences will have a marginal impact on future jobs. 

Figure 1 shows (in grey) the consistent jobs decline that the oil and gas sector is predicting to 2030 under business as usual, and the blue bars show actual direct and indirect jobs supported. This demonstrates that jobs are in perpetual decline, and have been declining faster than predicted - despite the continued issuing of oil and gas licences. What is clear from this is that after 50 years of drilling, the North Sea basin is in decline and the current political strategy of doubling down on new oil and gas will not protect jobs in the basin.

After a decade of silence from industry during a series of downturns in which thousands of jobs have been lost, the current furore could be seen as a cynical attempt by North Sea operators to use the threat of job losses to lobby against government policies to tax profits fairly. 

But the concerns of workers – on platforms and in Aberdeen – are not to be used as a political football and must be taken seriously today. The North Sea is in decline and the current jostling by politicians serves them badly. Workers are right to demand a coherent, credible plan to transition the North Sea and its workforce to clean energy production. We need a New Deal for the North Sea to ensure that the transition away from oil and gas serves the public interest. 

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