Sectoral marine plan for offshore wind energy: social and economic impact assessment scoping report
Sets out the methodology and scenarios for scoping and undertaking a socio-economic impact assessment.
A.9. Oil and Gas
A.9.1 Sector Definition
This sector relates to the upstream oil and gas industry comprising the exploration and extraction of oil and gas from the environment, largely from offshore reserves. The term 'oil reserve' refers to oil, the condensate gas liquids obtained from gas fields and from the associated gas in oil fields. A 'gas reserve' refers to the quantity of gas expected to be available for sale from dry gas fields, gas-condensate fields and oil fields with associated gas.
A.9.2 Overview of Activity
Aberdeen is regarded as the UK centre for the oil and gas industry due to its proximity to significant oil deposits in the North Sea. Figure A.9.1 shows licensed blocks, offshore hydrocarbon fields, platforms and pipelines for the oil and gas sector in Scotland.
Information on production, economic value and future trends presented below relate to the UK; disaggregation of this data to regional (Scottish) level is not possible.
In 2016, oil and gas production from the UK Continental Shelf ( UKCS) increased to 630 million barrel of oil equivalent (boe), the highest since 2011 (Oil and Gas UK, 2017). In this year, oil and gas provided 76% of the UK's primary energy (60% of which came from production in the UK), making an estimated contribution of £17 billion to the UK's balance of trade.
Statistics produced by the Scottish Government show that in the financial year 2015-16, oil and gas production in Scotland (including Scottish adjacent waters) is estimated to have been 70 million tonnes of oil equivalent (mtoe), which accounted for 81% of the UK total. The approximate sales value of oil and gas produced in Scotland that year is estimated to be £13.4 billion (Scottish Government, 2016).
Information on employment and future trends presented below relate to the UK and disaggregation of this data to regional (Scottish) level was not possible.
In 2016, it was estimated that the oil and gas sector supported over 300,000 jobs of which 29,500 jobs were classified as direct employment ( i.e. employed by companies operating in the extraction of oil and gas and associated services). A further 150,600 indirect jobs [15] and 135,300 induced jobs [16] were supported by the sector in 2016.
With regard to future trends, although renewable energy capacity for electricity production is anticipated to increase and the oil and gas production is projected to gradually decrease between 2017 to 2035, the UK Government forecasts that 66% of the UK's energy mix will still come from oil and gas by 2035 (Oil and Gas UK, 2017).
Information sources that can be used in the assessment are listed in Table A.9.1.
Figure A.9.1 Oil and gas activity in Scotland
Table A.9.1 Information sources for the oil and gas sector
| Data Available | Information Source |
|---|---|
| Oil and Gas production values ( UK) | Oil and Gas Authority https://www.ogauthority.co.uk/data-centre/data-downloads-and-publications/production-data/ |
| Oil and Gas economic value and employment ( UK) | Oil and Gas UK Economic Report 2017 https://oilandgasuk.co.uk/economic-report-2017.cfm |
| Oil and Gas production statistics and economic value (Scotland) | Scottish Government Oil and Gas Production Statistics 2015-16 http://www.gov.scot/Topics/Statistics/Browse/Economy/oilgas1516 |
A.9.3 Potential Interactions with Offshore Wind
Table A.9.2 shows potential interaction pathways between oil and gas and offshore wind arrays and export cables. Based on the approach to scoping described in Section 2 in the main report, the table also records whether the interaction:
- Is not likely to result in a significant socio-economic impact on the sector; or
- Is likely to result in a significant socio-economic impact on the sector and hence will require a detailed assessment;
The rationale underlying this expert judgement is provided in the table. Where it is not currently possible to make a judgement regarding the likelihood of a significant socio-economic impact due to insufficient information (for example, in relation to the extent of overlap between a sector activity and the DPO Areas) the table indicates that scoping will be required to be undertaken once sufficient information becomes available. Furthermore, as described in the main report, there is currently no information regarding the likely location of export cable routes/corridors and as such, it is not possible to undertake a meaningful assessment of the potential for any sector activity/export cable interaction to give rise to significant socio-economic effects. Rather, the potential for any interaction will be identified in Regional Locational Guidance.
Table A.9.2 Potential interaction pathways
| Potential Interaction |
Technology Aspect and Phase |
Potential Socio-economic Consequences |
Initial Scoping Assessment |
|---|---|---|---|
| Competition for marine space - restricted access to seafloor |
Arrays (construction and operation) |
Increased cost as a result of restrictions on platform construction leading to a decrease in profitability and a lack of investment in sector |
Any potential significant impacts would only be expected where DPO areas overlap with, or lie inshore of areas where oil discovered but awaiting development. The location of DPO areas is not currently available. Scoping assessment to be completed once DPOs defined. |
| Competition for marine space- restriction on exploration activities |
Arrays (construction and operation) |
Decrease in new oil and gas discoveries |
Any potential significant impacts would only be expected where DPO areas overlap with, or lie inshore of, areas where oil can be expected to be found but has not yet been explored. The location of DPO areas is not currently available. Scoping assessment to be completed once DPOs defined. |
| Competition for marine space - obstruction of pipeline routes |
Array and export cables (construction and operation) |
Increased cost associated with new development activities as a result of re-routing pipelines or cable/pipeline crossings leading to a decrease in profitability and/or investment |
Any potential significant impacts would only be expected where DPO areas overlap with, or lie inshore of, existing hydrocarbon fields. The location of DPO areas is not currently available. Scoping assessment to be completed once DPOs defined. |
| Competition for marine space - increased difficulty of access at crossing points |
Export cables (construction and operation) |
Increased maintenance costs for pipeline owners; loss of revenue for asset owners; loss of revenue for dependent businesses/customers |
Renewables development will not be permitted within a given 'corridor' either side of existing infrastructure such as pipelines to enable existing infrastructure maintenance. No detailed assessment required. |
A.9.4 Scoping Methodology
The spatial overlap between DPOs and potential oil and gas development locations to be assessed, once DPO areas are available.
A.9.5 Assessment Methodology
If a significant interaction between DPOs and potential oil and gas development locations is identified through scoping, further consideration will be given to the potential socio-economic impacts in consultation with Oil and Gas UK.
A.9.6 Data Limitations
No direct employment statistics for the Oil and Gas sector specific to Scotland were sourced (data shown is for the UK).
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