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Scotland pressed to exploit onshore oil and gas reserves

The country has one of the more robust low-carbon economic policies in the world.

By
Daniel J. Graeber
Scottish government could capitalize on onshore oil and natural gas reserves, industry group says. Photo by Steve Oehlenschlager/Shutterstock
Scottish government could capitalize on onshore oil and natural gas reserves, industry group says. Photo by Steve Oehlenschlager/Shutterstock

May 11 (UPI) -- Thousands of jobs and billions of dollars in tax revenue could come from the onshore oil and gas sector in Scotland, a report published Thursday found.

The Scottish government last year ruled that natural gas derived from underground coal deposits would have no place in a greening economy.

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Scotland has one of the more robust low-carbon programs in the world. The government's decision followed a report from the University of Glasgow that found the coal gasification industry had a history of incidents related to pollution and is out of step with Scotland's efforts to lower its emissions without an offset like carbon capture and storage in place.

Cluff Natural Resources had planned to spend about $310 million to build the first offshore UCG plan, saying it could return billions of dollars to the Scottish economy. Ken Cronin, the chief executive of the U.K. Onshore Oil and Gas organization, said Scotland stands to win by exploiting its own reserves.

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Scottish ministers had already enacted a separate moratorium on unconventional oil and gas extraction methods, like hydraulic fracturing.

"We strongly believe that there is a significant economic opportunity for Scotland but we recognize that as a result of a deeply polarized debate, and an extremely unfair depiction by some of the onshore oil and gas industry, there is still much to do to ensure local communities within the central shale belt have proper information," he said in a statement.

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The industry's report found as much as $8.5 billion in tax receipts would go to the Scottish government and more than 3,000 jobs could be created as a result.

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The Scottish government said last year its oil and gas industry was adjusting to a market where oil prices are about half what they were three years ago. In September, Scottish Energy Minister Paul Wheelhouse said the government has a duty to build confidence in the energy sector given the uncertainty tied to the British decision to leave the European Union.

Cronin said that, from the industry's perspective, the moratorium on onshore work was no longer justified.

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