Does the oil and gas industry have the resolve to maintain focus on the energy transition, despite demand for fossil fuels growing?

That’s one of the questions many will be left wondering after reading the latest Energy Transition Survey which Aberdeen & Grampian Chamber of Commerce which is published today.

The bi-annual survey takes the pulse of the oil and gas industry and makes for fascinating reading.

Renewed interest in, and reliance on, the sector can be put down to two major changes which have happened since the last survey, which we also sponsored.

The first is the rebound of energy demand as the global economies reopen, which has driven gas prices to record highs. The second is the war in Ukraine and sanctions on Russia’s energy exports which Europe has been reliant on for years.

The industry is in a different place compared to six months ago when COP26 took place in Glasgow. As global leaders visited Scotland, many felt we were witnessing a symbolic shift towards collective agreement that the transition away from reliance on oil and gas needed to happen more quickly and be more strategic.

The survey was conducted during the post-COP26 period where that rhetoric around transition has, at times, risked being trumped by the need to deal with rising energy prices, the cost-of-living crisis, supply chain issues and, of course, maintaining energy security.

Oil and gas producers, and companies in the supply chain, are in a strong position. Confidence is high, despite ongoing discussions around a possible windfall tax.

But the perennial issue of climate change is not going away and change must continue to happen. The industry is leading on that, and understands it has the potential to grow Scotland’s economy and be a driving force in facilitating the transition to a lower-carbon economy and a net zero future.

The direction of travel is clear amongst oil and gas firms. They are expecting their businesses to transform substantially and at pace across the next decade. The firms we surveyed predict that, on average, the share of their business outside of oil and gas will jump to 50% by 2030. Most across the sector are diversifying outside of oil and gas in some shape or form, although one in five still have no plan to change.

Careful planning and investment at a corporate and government level are needed to make sure Scotland’s decades of experience, the current skill sets, and existing infrastructure are used to their full potential as we move towards a greener future. Doing so will allow Aberdeen to prosper as a major player on the global energy stage and continue its long tradition as a powerhouse for the local and UK economy.

The industry remains committed to the transition but individually firms must ensure they remain focused on the long-term objective. That is the only way firms will succeed, workforces will grow, the economy will benefit, and the planet will thrive.

The test facing firms now is how firmly to keep the pedal pressed to the floor on the journey to net-zero.