Can oil and water mix?
You'd have thought there's plenty space in the North Sea for oil, gas and offshore renewables to live happily together.
With one industry mature and in gradual decline for the next three or four decades, those offshore skills can be shifted to open up the new frontiers of offshore wind and wave power.
The Renewables UK conference at the Scottish Exhibition and Conference Centre in Glasgow today shows plenty potential for transition, with oil and gas expertise looking for ways to get into the new klondyke.
The talk is of energy synergy.
Some in the oil business are not so sure quite how they're going to get sustainable with their power.
It's still not clear where they're going to find the funding stream for the gigantic investments necessary to realise offshore wind's potential. Less so still for tidal and wave power.
From those I talked to, they were hearing lots of talk and big hopes, but not many deals getting pinned down, while the offshore experts wait and see what happens.
Seismic disruption
And what may happen is that the sub-sea hydrocarbon business falls out with those harvesting power above the surface of the North Sea.
Oil and gas companies have licences from the Crown Estate, and many hold back on exploration for the timing and financing to be right.
They are concerned that the disruptive impact of drilling and seismic work may literally undermine the wind industry's seabed foundations, once its installed by the thousands of units.
Environment campaigners today called for the standard Crown Estate clause to be re-drawn, taking away the oil industry's right of pre-emption on the seabed.
The oil industry has suggested that it's aware that legal redress may be necessary if all those turbines start disrupting its exploration and production.
Tight budgets
The Scottish government has today come up with £70m of infrastructure funding to help build the harbours, ports and manufacturing base from which the renewables industry can then operate.
I've been discouraged from asking what secondary priorities for Scottish Enterprise and Highlands and Islands Enterprise are going to have to give to pay for that.
We'll wait and see when those tight budgets become clearer.
Instead, Scottish Enterprise underlines that the "re-profiling" of budget to put the renewables infrastructure fund at the top of its priorities was a boardroom choice.
And the emphasis from First Minister Alex Salmond is on how much more could be achieved if only the Treasury would release £190m of revenue from the fossil fuel levy that's allocated to Scotland, but sitting on account, unused, while Whitehall and Holyrood return to the Labour government's disagreement with the Scottish administration about how it gets released.
Meanwhile, the hope of getting industry to make the transition from one energy boom to another, with an industry summit planned for 17 December, looks a bit more uncertain when people are beginning to look to the courts to protect their interests rather than finding common ground on which to further them.
Hullo, I'm Douglas Fraser, and I'm business and economy editor at ³ÉÈË¿ìÊÖ Scotland. Welcome to my blog, where you can read my take on money matters, viewed from a Scottish perspective.
Comment number 1.
At 3rd Nov 2010, rog_rocks wrote:If the government of Scotland was truly that and we didn't have the hostile government of another land meddling in our affairs then I am sure the problems with crown estates and competition etc would be much easier to cope with.
We could concentrate on the problem at hand, come up with a reasonable compromise and so negate our need to waste time and money directing attention abroad where the hostile meddlers seem to prefer one energy source to another.
I wonder why?
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Comment number 2.
At 3rd Nov 2010, redrobb wrote:Can Oil & Gas and re-newables live together? As long as they generate mass profits from the masses, the answer is YES
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Comment number 3.
At 3rd Nov 2010, Graham E wrote:Sadly I believe this may be a sign of things to come. Fundamentally there isn't enough cash involved in renewables to make either the energy companies, service companies or individuals interested. For politicians to pretend there will be a jobs bonazia is pie-in the sky. There will be jobs but at much lower rates of pay and with limited opportunities. the future for the Oil & Gas workforce - as anyone in the industry knows - is decommissioning then movement overseas. In my rural Aberdeenshire village more than half the community spends significant time overseas already and when Oil & Gas runs out in the North Sea we'll do what Scots have always done - leave to follow the money. The Renewables industry with it's paltry rates of pay is an irrelevent distraction.
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Comment number 4.
At 3rd Nov 2010, Wee-Scamp wrote:Douglas is mischief making. There is little real chance of any oil company taking a wind farm company to court especially when quite a few of them are actually the same company.
Technically what he says is correct but this doesn't mean it's ever going to happen.
#3 Graham E
Actually you're only half right. There is plenty of money to be made in renewables if you're manufacturing the hardware. Sadly though we're not doing that. But then of course we don't build hardly any oil/gas hardware either.
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Comment number 5.
At 3rd Nov 2010, Graham E wrote:Wee-scamp,
There isn't a lot of money to be made out of cutting and bending steel - one of the reasons why we don't build rigs in the UK any more - it's a simple matter of comparative wage rates. We do build quite a lot of high quality / complicated Oil & Gas hardware in the UK and more importantly we do lots of design work for hydrocarbon projects all over the globe - largely based out of London. We are also world leaders in subsea engineering. My point was this is all about high quality complicated bespoke engineering - something that simply isn't required in wind or wave power. The skill base and workforce for Oil & Gas is notoriously international and isn't about to work on half rates building and installing wind turbines. That doesn't mean that others won't take the jobs but to link Oil & Gas and Renewables is fallacy.
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Comment number 6.
At 3rd Nov 2010, Wee-Scamp wrote:Graham E
Ah yes. The subsea engineering argument. I can't now think of a single major subsea engineering company that's UK owned let alone Scottish. Technip is French, Acergy/Subsea7 is Norwegian. On the subsea metal chunk side GE is American and the rest are also foreign owned. I'm not even sure now if we have a UK ROV manufacturer left and we certainly don't have a floater owning drilling company although we do build some niche drilling hardware as indeed we build some niche subsea hardware such as connectors.
Generally though we don't do as much as we should and we certainly don't own as much as one might expect given the 40 year history of the N Sea.
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Comment number 7.
At 3rd Nov 2010, Graham E wrote:Wee Scamp,
I was quite clear in my post when I said build not own. Oil & Gas companies are international - even Acergy / Subsea 7 which you quoted is actually registered in Luxemborg, Transocean in Switzerland, etc. etc. These companies are international groups which don't really have home locations for anything other than tax purposes. What we do have for both the majors and some suppliers is headquarters functions within the UK. Global businesses with portable assets will always move as their businesses demand.
Anyway - we own exactly what we deserve and what we have choosen as a community and country to create. If we had invested the money we received in the 1970's and 80's into creating opportunities for the development of companies in the Oil & Gas sector rather than keeping afloat dead shipyards and coal mines we might well have a different picture today. Unfortunately we still tend to look to others to do things for us rather than doing them ourselves.
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