Jackdaw is a distraction from Aberdeen’s much bigger problem

This article was originally published on our Substack.

After years of back and forth and months of mounting speculation, this week the Government gave the green light to the Jackdaw gas field. But one small hydrocarbon project dominating headlines risks missing the much bigger – and more important – question over where tomorrow’s good jobs in Aberdeen will come from.

When we visited Aberdeen earlier this year, we saw what the city has to offer and the incredible depth of expertise and infrastructure it has built over decades, but to put this to best use, we need to start focusing more on the city’s future and less on its past.

Oil and gas jobs are running dry

Aberdeen remains at the centre of the UK’s oil and gas industry, and when the industry has boomed so has the city. In the early 2010s, total disposable incomes in Aberdeen exceeded the UK average by a fifth, and the earnings of people working in the city by almost half (47 per cent).

The flip side to this is that when the industry has suffered so too has the city. When oil prices halved between 2014 and 2016, the city sank into decline, and Aberdeen’s earnings premium over the rest of the UK has since fallen by three-quarters, while payrolled employment is down 8 per cent since 2015.

Now, Aberdeen faces a new problem: after extracting close to 48 billion barrels of oil equivalent, reserves are running dry. UK oil and gas production is down 76 per cent on its 1999 peak and is set to fall by another 40 per cent by 2030 (and by over 90 per cent by 2050). While Jackdaw will increase output, its contribution will only be marginal: the new field will generate fewer than 30 permanent roles.

For Aberdeen and its specialised workforce there is now no other option than to look elsewhere for jobs that can fill the gap the oil and gas industry is already leaving behind.

Green jobs can help but aren’t arriving fast enough or are arriving in the wrong order

Aberdeen is a natural fit for offshore wind thanks to its subsea engineering capability, offshore logistics, deep harbour, and long experience with operating in harsh North Sea conditions. But despite Scotland’s largest offshore wind farm, Seagreen, sitting nearby, the city hasn’t seen the green jobs boom it was hoping for.

Much of this is down to timing, as wind capacity has arrived before the grid upgrades that would enable the electricity generated to be used by households across Britain. As a result, much of Scottish wind capacity is being wasted (‘curtailed’). In 2024, energy from Seagreen was curtailed in 71 per cent of the hours it was available at a cost of £65 million.

To prevent future bottle necks, ministers will need to ensure that infrastructure is built in a sensible order by aligning Scottish capacity targets with the grid timetable. As it stands, the grid reinforcements that are needed to carry Scottish wind south will not be complete until the 2030s – several years after a wind farm consented today would start generating.

Decommissioning can help fill the gap

With oil already declining and more green jobs years away, there’s a risk that Aberdeen loses the highly skilled engineering base that took half a century to build. In the year to mid-2023 alone, 4,400 Aberdonians voted with their feet and left for overseas destinations.

In the short-term, decommissioning work (making safe old rigs, wells and pipes) can help bridge the gap and draw on the skills that the city already has. The part of the North Sea currently serviced out of Aberdeen is expected to account for 60 per cent of national decommissioning spending over the next 10 years, with demand for workers increasing to a peak in 2029.

To get the most out of this inherently temporary work, the Government should attach domestic content conditions to the tax relief that funds much of decommissioning and treat dismantling capacity at ports as national infrastructure to ensure as much of the work as possible is based in Scotland, rather than hubs on the other side of the North Sea.

Getting this right will need careful planning

Decommissioning activity, grid investment and wind infrastructure all need to be timed against one another so that workers and the firms employing them can clearly see where the next five years of work comes from.

This kind of coordination would be a major departure from the reliance on market timing that has characterised the North Sea hydrocarbon industry, and that underpins the UK Government’s competition-led, ‘place-blind’ approach to renewable energy subsidies. But to future-proof Aberdeen’s workforce the UK and Scottish Governments will have to be more hands-on: no single operator, regulator or local authority holds all the levers.

Read ‘Second wind’ to find out more about how green industries can contribute to local economic growth in places like Aberdeen.