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GMB Calls For Government Investment In North Sea Decommissioning

Monday, November 21, 2016

GMB Calls For Government Investment In North Sea Decommissioning As Taxpayer Liable For Up To 75 Per Cent Of Field Clean-Up Costs

A report commissioned by GMB Scotland has revealed that the UK taxpayer could be liable for a significant share of the North Sea’s decommissioning costs over the next forty years. 

Latest estimates associated with fields across the UK Continental Shelf (UKCS) mean an increasing financial burden will be placed on the Treasury in the form of tax refunds to oil and gas companies, potentially as much as 75 per cent of the out-turn costs. Average costs for North Sea decommissioning expenditure are growing by 14 per cent a year, with the final cost of decommissioning now expected to be in excess of £100 billion. 

The report’s authors, CRF Consultants, propose that urgent focus should be placed in three key areas – life of field extension, decommissioning execution and job retention - and have identified where Scotland could realise significant value and compete against more established foreign competitors. 

GMB is now calling for the UK and Scottish Governments to bring forward an urgent investment programme to get Scottish ports and fabrication yards ‘decommissioning ready’, allowing the country to compete for a market share it will ultimately pay for. 

GMB 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 monies 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. 

Scotland has assets like the Port of Dundee and BiFab in Fife that are primed to compete for a share of this highly lucrative domestic and international market but the task will be made easier if they are given state support to get ‘decom ready’ quicker. 

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.”

Ends

Contact: Peter Welsh, GMB Scotland Communications, on 07976 447077. 

Additional Resources

Status Capacity and Capability of North Sea Decommissioning Facilities

download pdf1824Kb (pdf) - 21 November 2016

A Report For GMB Scotland By CRF Consultants