Are there lessons for Newfoundland in a Just Transition strategy for the U.K. Offshore oil industry?

sea-change-cover-212x300Sea Change: Climate Emergency, Jobs and Managing the Phase-Out of UK Oil and Gas Extraction was released on May 15 by Oil Change International, in partnership with Platform and Friends of the Earth Scotland.  The press release summary is here . The report examines the offshore oil and gas industry in the U.K., with special attention to the transition for workers and communities currently dependent on oil  – making it highly relevant to Canadians, especially Newfoundlanders.   Sea Change argues that  with the right transition policies, clean industries could create more than three jobs for every North Sea oil job at risk, which can enable an “equivalent job guarantee” for every oil worker.

The report contrasts two pathways available for the U.K. and Scotland to stay within Paris climate limits:   1. Deferred collapse, in which the countries “continue to pursue maximum extraction by subsidising companies and encouraging them to shed workers, until worsening climate impacts force rapid action to cut emissions globally; the UK oil industry collapses, pushing many workers out of work in a short space of time.” Or  2. Managed transition: in which countries “stop approving and licensing new oil and gas projects, begin a phase-out of extraction and a Just Transition for workers and communities, negotiated with trade unions and local leaders, and in line with climate change goals, while building quality jobs in a clean energy economy.”

To achieve the clearly superior “managed transition” pathway, the report recommends that the U.K. and Scottish Governments:

  • Stop issuing licenses and permits for new oil and gas exploration and development, and revoke undeveloped licenses;
  • Rapidly phase out all subsidies for oil and gas extraction, including tax breaks, and redirect them to fund a Just Transition;
  • Enable rapid building of the clean energy industry through fiscal and policy support to at least the extent they have provided to the oil industry, including inward investment in affected regions and communities;
  • Open formal consultations with trade unions to develop and implement a Just Transition strategy for oil-dependent regions and communities.

offshore oil rigOffshore Oil and Gas in Newfoundland: In Newfoundland, the importance of the offshore oil industry is evidenced by the fact that a  snap election was called shortly after the province reached agreement with the federal government on royalty payments on April 1.  The two governments announced agreement on  a “renewed Atlantic Accord”  – including the “Hibernia Dividend Backed Annuity”, valued at $2.5 billion for the province, according to a CBC report . This is new money that comes from Ottawa’s 8.5 per cent stake in the Hibernia offshore project, and will be paid out in annual installments over 38 years. According to the Q1 2019 Company Benefits Report ,   Hibernia operations employ 1,458 workers, of which 90.8% are Newfoundlanders.

The federal and provincial governments are also closely intertwined in a new consultation process which was launched for the Regional Assessment of Offshore Oil and Gas Exploratory Drilling East of Newfoundland and Labrador  in April, along with the Canada-Newfoundland and Labrador Offshore Petroleum Board. The provincial Minister is quoted in the federal press release:  “Our government is committed to working collaboratively with our federal partners to ensure responsible development of our oil and gas industry. The Regional Assessment is an important step towards exempting routine, low impact activities, such as exploration wells, where potential impacts and standard mitigations are well known, from federal assessment. This is another step we are taking to achieve the vision we set out in Advance 2030 to benefit all Newfoundlanders and Labradorians.”

The Advance 2030 document, released in 2018, is subtitled:  A Plan for growth in the  Newfoundland and Labrador Oil and Gas Industry, and is based on the government’s commitment “to resource development as a key economic driver and to positioning the industry for continued growth.”   In releasing the Advance 2030 report, the government announced some long-term targets, including the direct employment of at least 7,500 people in operations, drilling of over 100 new exploration wells by 2030, and doubling oil production by 2030.  That same Liberal government was returned to power as a minority government on May 16, and compiles news of oil and gas development  here .

 

U.K. Parliament declares climate emergency; Government committee calls for Net Zero Emissions by 2050

extinction rebellion signThe government of the United Kingdom became the first national government to declare an environment and climate emergency. on May 1 when it passed a motion by Labour leader Jeremy Corbyn (and Ireland followed suit with its own vote in Parliament on May 10) . Many agree with the headline from Common Dreams, “Activism works: UK Parliament makes history in declaring climate emergency”, reflecting on the huge impact made by the April demonstrations of the School Strikes and Extinction Rebellion in the U.K.

UK net-zero-coverOn the heels of the symbolic victory of the climate emergency declaration, on May 2 the U.K. government’s Committee on Climate Change delivered its long-awaited landmark report, requested by the U.K., Scottish and Welsh Governments in 2018.  Net Zero: the U.K.’s contribution to stopping Global Warming  calls for net zero emissions by 2050, with Scotland to target net-zero by 2045 and Wales to target a 95 per cent reduction by 2050 relative to 1990.  The net-zero target would cover all greenhouse gases, including international aviation and shipping, and allow for the use of emissions credits. The Committee estimates the cost at equivalent to 1-2% of GDP each year, made possible by the rapidly falling cost of new technologies – and balanced by the benefits of a cleaner environment and improved health. In calling for more ambitious targets than the existing one of 80% emissions cut by 2050 (set out in the 2008 Climate Change Act), the Committee states that “Current policy is insufficient for even the existing targets”, and calls for “clear, stable and well-designed policies to reduce emissions … across the economy without delay”.

Links to the research reports supporting the Committee’s report are here .  The Guardian released a brief overview in “‘This report will change your life’: what zero emissions means for UK . More substantial reactions come from:  Carbon Brief, with a detailed summary; and from The Grantham Institute “What is Net Zero?” , and a political wish list in “Urgent response needed from U.K. government on Net Zero Emissions”  .

The Greener Jobs Alliance , a coalition of U.K. unionists and environmentalists, also summarizes what the new report may mean, acknowledging that “The 2050 target date for zero emissions will disappoint many demonstrating across the UK.”, but focusing especially on the breakthrough of the Committee’s call for Just Transition. The GJA states: “It should now reinforce this message by setting up a Just Transition Advisory Group, with union representation from the industrial, energy, public and voluntary sectors….” and “….the absence of a strategic advisory role for unions in the work of the committee is no longer tenable.”

Below is the GJA overview of what the Net Zero report will mean for workers, as published in their news release:

  • Up to one in five jobs across the UK will be affected by a Zero Carbon Britain strategy.
  • Major moves away from fossil fuels – with job losses across oil and gas extraction, power and heating industries, as well as job losses in supply chains for these sectors.
  • Some gas fired power stations could be needed, but they will need to run using hydrogen or Carbon Capture & Storage. All coal-fired stations close.
  • Huge job growth is expected in sectors like renewables, electric vehicles, home insulation and domestic heating.
  • Employment in offshore wind, for example, is predicted to quadruple to 27,000 jobs by 2030. The big prize comes when all three main parts of a wind turbine – the tower, the cell at the top and the blades – are made in the UK. The UK is currently a big importer of renewable technology. The UK has to develop full supply chains across the renewable energy sector.
  • By 2025 at the latest all new cars and vans should be electric, or use a low- carbon alternative such as hydrogen. The automotive industry must transition to electric vehicles, with major implications for jobs, skills and investment.
  • No new homes should be connected to the gas grid after 2025.
  • Retrofitting homes with energy efficiency measures and installing low-carbon heat into new and existing homes will require new skills. This programme could generate many more high-skilled jobs in the installation and construction industries.

U.K. makes progress on a Green New Deal amid the chaos of Brexit

Understandably, the Members of Parliament in the United Kingdom are preoccupied with the chaos of the Brexit crisis – which in itself, has huge implications for environmental policy in the country.  “How Brexit will impact the UK’s environmental policy”  provides a good summary of the specifics, and an active website publishes analysis by “a network of impartial academic experts analysing the implications of Brexit for UK and EU environmental policy and governance” . Greener UK, a network of 14 environmental NGOs, is also focused on Brexit “in the belief that leaving the EU is a pivotal moment to restore and enhance the UK’s environment. ”

Lucas UK screenshot gnd billProgress on a Green New Deal  amidst the chaos:  But while Brexit rages, and  the country awaits the May 2 publication of recommendations on long term net zero emission targets by the Committee on Climate Change (CCC),  the Decarbonisation and Economic Strategy Bill  was tabled in the House of Commons by two members of Parliament – Green Party member Caroline Lucas  and Labour Party member Clive Lewis .  Although the bill doesn’t use the term “Green New Deal”,  Caroline Lucas  does in her Opinion piece in The Guardian, “The answer to climate breakdown and austerity? A green new deal” (March 27).  She states: “Our bill would introduce a “green new deal” – an unprecedented mobilisation of resources invested to prevent climate breakdown, reverse inequality, and heal our communities. It demands major structural changes in our approach to the ecosystem, coupled with a radical transformation of the finance sector and the economy, to deliver both social justice and a livable planet… This is purposely radical territory. We must push the boundaries of what is seen as politically possible. Because climate justice and social justice go hand in hand.”  The official summary  of the Bill appears on page 7 of the parliamentary Order Paper for March 26 including a 10-year time line with reporting requirements, and a stated goal for  community and employee-led transition from high-carbon to low and zero-carbon industry, and the eradication of inequality.

UK Green New Deal coverGreen Party MP Caroline Lucas has a long history with the concept of “green new deal”, as part of the Green New Deal Group which was founded in the U.K. in 2007  and published its first policy statement :  A Green New Deal Joined-up policies to solve the triple crunch of the credit crisis, climate change and high oil prices  in 2008.

The Labour Party has also been in the news recently for its new grassroots initiative, the Labour Green New Deal.  For example,  “Labour scrambles to develop a Green New Deal” in Climate Change News (Feb. 14);  “Labour members launch Green New Deal inspired by US activists” in The Guardian (March 22) ; and “Our new movement aims to propel Labour into a radical Green New Deal”  (March 22) in The Guardian,  an Opinion piece by  Angus Satow, co-founder of the coalition, who states that the party’s  Green Transformation Environmental policy statement, is a starting point, but “ a GND means a new settlement for Britain. It would give local communities the funding and power to control their future, while democratising industry and the economy. Communities with control of utilities will have great power over their lives, while tackling fuel poverty, as the profits go to ordinary people, not shareholders.” “Labour for a Green New Deal – because climate change is a class issue” by Chris Saltmarsh at Labourlist(March 22) lays out the role of unions in the initiative, with specific and detailed plans: “A Green New Deal in the UK is therefore nothing without participation and leadership from our unions. Rank-and-file trade unionists across the country are ready to organise for this from below. We’ll work with them to build support, host events, pass motions from branches to policy conferences, and develop regional plans for a Green New Deal that put workers first.”

U.K. Offshore wind energy investment promises jobs, but the example of Scottish workers leads unions to protest

offshore wind Beothuk Installation Newfoundland.jpgOn March 7,  the government of the United Kingdom announced a new Offshore Wind Sector Deal  which aspires to provide 30% of the U.K.’s electricity by 2030 and, according to the article in The Guardian, also promises that  jobs in offshore wind will triple to 27,000 by 2030.  The detailed  government press release  further states that the deal will increase the number of women in the industry, continue efforts by educational institutions to develop a sector-wide curriculum to facilitate skills transfer, prompt new targets for apprenticeships, and create an “Offshore Energy Passport”, recognised outside of the UK, so that workers will be able “to work seamlessly across different offshore sectors.” Unite the union reacted with this statement , which included a warning that the Energy Passport “should not  be used to attack workers’ terms and conditions of employment, nor compromise health and safety regulations.”

In the same statement, Unite also called for a ‘level playing field’ for Scotland so that it can secure large-scale manufacturing contracts for its own offshore renewables sector. The  concern follows the award of  £2.8 billion in contracts for turbine manufacture to companies in Spain, Belgium and the United Arab Emirates, rather than to the BiFab yards in Fife, Scotland. As reported in “Union fury as £2.8 billion wind turbine contract goes overseas”  in the Greener Jobs Alliance newsletter (March/April), the GMB and Unite unions are calling on the Scotland’s Prime Minister and the Scottish Parliament to intervene, stating: “The Scottish Government and the public have a stake in BiFab and with it our renewables manufacturing future. We owe it to our communities to tackle the spaghetti bowl of vested interest groups that’s dominating our renewables sector and to fight for Scotland’s share’.

 

One more time – how best to train workers in green construction?

UK 2019 housingThe  U.K.’s Committee on Climate Change released a new report on February 21, U.K. Housing – Fit for the Future? , assessing how well U.K. housing  is prepared for the impacts of climate change, including heat waves and flood risks. Energy use in Britain’s 29 million homes accounts for 14% of current GHG emissions, and the report concludes that the U.K. cannot meet its present climate targets without major improvement in the housing sector.  The report states that energy use in homes actually  increased between 2016 and 2017, with many energy efficiency initiatives stalled and standards and policies weakened or not enforced.  The report identifies 5 priorities and makes 36 recommendations to improve that performance, with a goal  to reduce emissions by 24 % by 2030 from 1990 levels.

One of the five priority areas needing urgent change is “the skills gap”.  The report states: “Regular changes to key policies have led to uncertainty and poor focus on new housing design and construction skills in the UK. The UK Government should use the initiatives announced under the Construction Sector Deal to tackle the low-carbon skills gap. …. Professional standards and skills across the building, heat and ventilation supply trades need to be reviewed, with a nationwide training programme to upskill the existing workforce, along with an increased focus on incentivising high ‘as-built’ performance. There is an urgent need for further work to ensure that low-carbon heat and mechanical ventilation systems are designed, commissioned and installed properly, and that householders are supported to use them effectively. Similar efforts are needed to develop appropriate skills and training for passive cooling measures, water efficiency, property-level flood resilience and Sustainable Drainage Systems (SuDS).”

The Paper Trail of Government Reports:  The Construction Sector Deal  referred to is a 2018 policy paper, part of the larger Industrial Strategy exercise, which includes a “People” section , which describes very specific proposals to improve training and apprenticeship programs under the industry-led Construction Industry Training Board (which was itself reviewed in 2018).  The 2018 Construction Sector Deal built upon Construction 2025,  which was a vision paper of government and industry working together, released in 2013.

A different perspective from the government-industry reports appears in an article by   Linda Clarke, Colin Gleeson, and Christopher Winch in 2017, “What kind of expertise is needed for low energy construction?” which appeared in the journal Construction Management and Economics.  The authors, from ProBE , the Centre for the Study of the Production of the Built Environment at University of Westminster,   sketched out the essence of the problem, stating: “There is a lack of the expertise needed for low energy construction (LEC) in the UK as the complex work processes involved require ‘energy literacy’ of all construction occupations, high qualification levels, broad occupational profiles, integrated teamworking, and good communication.”  Their proposed prescription for low energy construction  was “a transformation of the existing structure of VET provision and construction employment and a new curriculum based on a broader concept of agency and backed by rigorous enforcement of standards. This can be achieved through a radical transition pathway rather than market-based solutions to a low carbon future for the construction sector.”