‘Jackdaw means we pay our mortgages’: relief in Aberdeen over gasfield approval

As recently as 2012, Aberdeen boasted the highest concentration of millionaires in the UK. An ATM reportedly had the highest withdrawal rate in Europe in the 90s, as oil and gas wealth flowed through the city. House prices soared in the scramble for space as fossil fuel firms transformed the city’s grand granite houses into company offices. But that was then.

Today, “for sale” and “to let” signs punctuate the city’s main thoroughfares. Disposable income in Aberdeen has fallen by nearly 20% between 2013 and 2023 – more than any other large UK city – after a 2014 oil price shock sparked a brutal reversal in Aberdeen’s fortunes.

At the beginning of this year, demolition began on the former offices of Marathon Oil, once a base for hundreds of workers. Between 2010 and 2021, the number of people aged 20-29 fell by 16%. BP appears set to leave the city after announcing plans to divest from its North Sea business. On darker days, the spectre of former coalmining towns looms large in the minds of some residents.

“Years ago, a fund should have been set up that saved some of the oil money for Aberdeen. But that’s long gone,” said Scott, an assistant at a men’s clothing shop. “It’s a city centre like any other now. People blame the local council and the local government. I don’t know. It’s very different to how it was.”

“Twenty years ago this street was full. Now it is so quiet,” said one woman at a bus stop on Union Street.

For many Aberdonians, the government’s decision to approve the Jackdaw gasfield, located 150 miles offshore, came as a relief.

Critics point to the climate impact and the modest number of jobs that the new gasfield would likely support. Tessa Khan, the executive director of the anti-oil campaign group Uplift, said: “Jackdaw will provide around just 2% of our gas demand for roughly 10 years. It has been oversold and won’t stop the overall decline in North Sea jobs as it will be largely unmanned and operated remotely.”

The UN Environment Programme has said global carbon emission targets need to be cut by nearly a fifth in the next four years, and by close to half within a decade, to avoid overshooting climate targets by a disastrous margin.

But for oil and gas workers in the city, this is about keeping as many North Sea jobs for as long as possible, which have so far not been replaced by the renewables sector and tend to pay less.

At the heliport, offshore workers returning to dry land after a flight across stormy North Sea waters were in good spirits about the prospect of a new field.

“Jackdaw means we pay our mortgages. Without oil and gas, what am I supposed to do?” said one woman, who works offshore as a cleaner on a rig.

Another offshore worker said: “Short-term, the green industry isn’t going to replace this. It’s a slow process. You can’t expect it to happen overnight.”

Few think that the new gasfield will restore the city’s boomtown years. Unlike other oil cities such as Houston, Abu Dhabi and Stavanger, Aberdeen has not been able to recover from the 2014 price shock and there is growing acceptance that the decline is permanent. Many offshore oil and gas workers acknowledge that they are likely to be the last generation of their kind – and increasingly work away for weeks at a time on rigs in Africa and Asia.

More than 90% of the UK part of the North Sea basin has been exploited, compared with just over 50% in Norway, which has not outlawed new exploration licences. Jackdaw is projected to supply only 6% of the UK’s gas output at its peak. In the approval, the energy secretary, Miatta Fahnbulleh, pointed to national security reasons behind her decision to back the project.

“This decision will support the country’s energy security with homegrown gas this winter and help minimise the UK’s use of imported higher emission fuels as we continue our transition to renewables and nuclear.

“The decision is compatible with our legally binding climate commitments, and we remain resolute in ending new licences for oil and gas and achieving net zero by 2050,” she said.

The rapidly growing renewables industry in the city has proved to be a boon for some firms: the shipping operator North Star once made all of its money from the oil and gas sector, but now nearly 80% of its operating profit comes from offshore wind. Great British Energy is headquartered in the city. Yet, the growth in the offshore wind industry has so far failed to offset the decline in oil and gas jobs in Aberdeen, and it is unclear it ever will. About 90% of offshore jobs in the northeast of Scotland remain in the oil and gas sector, supporting around 38,000 jobs compare to 4,200 in the renewables sector.

From the doldrums of the 2014 crash, Aberdeen has seen recent signs of recovery. Major regeneration works are taking place in the city centre. On a drive through the leafy west of the city, grand houses are not longer left on the market for months, said Joni Esson, a property lawyer with Simpson & Marwick.

“We’re seeing property sell for reasonable prices and a little bit of confidence coming back,” she said. “Loads of people who bought pre-2014 got in negative equity and then just couldn’t shift their homes.”

Our Union Street, a community group formed to reinvigorate the city’s main thoroughfare, has been filling empty shops after the vacancy rate reached 20%. For Bob Keiller, a former oil and gas CEO who oversees the effort, Jackdaw’s approval was a sign that the government was taking a more pragmatic approach to the fossil fuel sector – which would be a boost to the city.

“It’s symbolic. For a long time, it’s been ‘no, nothing, never, never again’. Whereas now there’s recognition that maybe it makes sense to produce your own fuel sources. It has to make economic and environmental sense, of course,” he said. “Before, it was, ‘No, not listening! Just stop oil.’ What does that mean? Everything we’ve got here just now relies on oil and gas at the moment.”