How Oil-Rich Aberdeen is Pivoting Away from Fossil Fuels

By  |  November 3, 2021, 10:46 AM  |  Techonomy Exclusive


In the middle of the 20th century, Aberdeen was one of Great Britain’s economic basket cases. But the fortunes of this city of 200,000 in northeast Scotland swung wildly after the discovery of North Sea oil in the late 1960s. The city’s economy boomed. Now the city and its region are pivoting to build a new economy that is not so dependent on oil. City leaders have a new aspiration: to be a renewable energy capital.

“Everybody recognizes that oil and gas is declining in the North Sea and they have to be ready for the future. We have an energy transition underway,” says Barney Crockett, Aberdeen’s lord provost (what the Scots call a mayor), who has been one of the leaders of the transition.

During the United Nations’ COP26 climate conference taking place now in Glasgow, Scotland, some of the more progressive climate-oriented initiatives in the United Kingdom are getting a spotlight on the world stage. Aberdeen serves as a model for what even carbon-dependent cities want to do to adapt to climate change and transform their economies, so they can benefit from the huge changes in technology and industry now underway. (Watch for more dispatches from COP26 this week and next on efforts to make the UK, and, by extension, the world, more sustainable and resilient.)

Five years ago Aberdeen launched a campaign aimed at reducing its use of fossil fuels in buildings and transit. That has already produced a 34% reduction in the city’s carbon emissions. But it’s just the start: In March, the city council approved a five-year plan aimed at increasing the city’s resilience to climate change. Meanwhile, private industry, with support from regional government, is developing advanced capabilities in wind and hydrogen energy. While offshore oil technologies and services are likely to continue playing an important role in Aberdeen’s economy for years, city leaders seem determined to change direction.

Climate activists, however, say Aberdeen—and the UK government—aren’t pushing the transition hard and fast enough. “UK oil and gas extraction policy is completely out of step with what the science tells us will be required to achieve our climate change goals,” says Tessa Khan, director of UpLift, a UK-based environmental group. She is skeptical that local leaders in Aberdeen will be able to get the cooperation they need from the oil and gas industry to make a quick and effective transition. “The incumbent interests want to preserve oil and gas for as long as possible, at a time when we can’t afford to do it anymore,” she says.

A recent survey commissioned by UpLift showed that about two-thirds of people in Scotland think the UK government should quickly wind down oil and gas production in the North Sea and redirect spending to green industries. The UK government has come under harsh criticism for refusing to rule out new exploration licenses for the North Sea even as it touts its new North Sea transition deal with industry.

Montrose Alpha oil platform (Credit: Creative Commons)

Aberdeen’s Crockett argues that North Sea oil producers are among the world leaders in reducing the carbon and gas footprints of their operations, so it’s better to have them producing oil during the energy transition rather than relying on operators elsewhere who flare or leak methane.

Aberdeen has been able to set off on this path to a lower-carbon future partly because of a warm relationship between government and industry. However, in contrast to the United States, where many legislative leaders appear to be beholden to the fossil fuel industry and there’s strong resistance to decarbonization, there seems to be a shared understanding among government and business leaders in northeast Scotland that things have to change and it’s best to get out ahead of it.

At the center of Aberdeen’s energy transition is Opportunity North East (ONE), a private-sector -led economic development initiative aimed at diversifying the region’s economy.  Launched in 2016 with initial funding from the Wood Foundation, ONE draws its board membership from the region’s business community, its universities and colleges, and regional governments. It’s focused on growing industries including life sciences, digital technology, tourism, and food and drink, and on accelerating the transition to a net-zero economy.

Toward that end, ONE created the concept of the Energy Transition Zone, which was launched in April 2021 as a separate not-for-profit company, ETZ Ltd. This ambitious project aims to reposition the North East of Scotland as a globally-recognized integrated energy cluster. Its leaders aim to develop a sustainable long-term international industry base that delivers sustainable jobs and growth. Its focal point will be a new industrial zone located next to the city’s massive new £350 million South Harbour development.

Funded initially by £53 million in grants, government funds, and private-sector funds from ONE, ETZ plans on hosting or incubating a cluster of businesses with the goal of directly supporting 2,500 green-industry jobs and another 10,000 transition-related jobs by 2030. The focus is on off-shore wind and hydrogen, but ETZ also wants to foster further development of carbon-capture technologies to help make the oil and gas industry less destructive to the environment

More than 40,000 people are employed directly by oil and gas in the region, so government and industry leaders want to sustain and increase employment even as that core industry declines. “This is a managed transition,” says Maggie McGinlay, CEO of ETZ Ltd. “We can’t just turn our backs on oil and gas. We support them in their decarbonization efforts while helping to manage the transition to renewables.”

One factor that may give Aberdeen a leg up in this transition is that the technologies and skills that already support local offshore oil production can be redirected to develop wind operations in deep water and other ocean energy projects.

Aberdeen faces a challenge many infotech industry giants have dealt with in the past: How do they gradually phase out legacy businesses while rapidly growing new ones. The tech boneyard is full of companies who failed. Now, the pressure is on Aberdeen to pull it off. The whole world needs to be watching.

Steve Hamm is a freelance writer and documentary filmmaker based in New Haven, Connecticut, USA. His new book, The Pivot: Addressing Global Problems Through Local Action, about the journey of Pivot Projects, was published in October by Columbia University Press. This is one of a series of dispatches from COP26.

Read more of Hamm’s Dispatches from COP26

October 29th: COP26: Let’s Pivot to Save the Planet

November 1: SustainChain: a Collaboration Platform for Do-Gooders

November 5: Glasgow Dispatch: Startup Funding Encourages Sustainability

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