Half a century ago, the North Sea oil boom changed Aberdeen’s skyline and the fortunes of northeast Scotland. A medieval harbor known for herring and whaling became filled with white storage tanks and colorful supply boats transporting goods to oil rigs.
Shell built a modern headquarters as wealth flowed into the city. In the 1980s, a team managed by Sir Alex Ferguson even beat Real Madrid to win football’s European Cup Winners’ Cup.
Local humor noted that oil workers brought in from abroad often complained about being sent to “far north” Aberdeen, the Granite City, and then grumbled even more when they had to leave, recalls Fergus Mutch, an advisor to local businesses.
Not all of Aberdeen benefited from the boom. The fishing village of Old Torry was demolished in the 1970s for the oil industry. Today, Torry is a struggling neighborhood overshadowed by warehouses, where council workers report issues from unsafe roads to health concerns.
Shell recently tore down its iconic headquarters, moving to less notable offices on Union Street. The historic shopping area needs rejuvenation, with many shops empty. House prices have dropped for much of the past ten years.
Aberdeen is eager to change its story as North Sea drilling declines and a climate-friendly era emerges, seeking to ensure workers and communities aren’t left behind in the global energy shift.
A new addition to the skyline suggests better days ahead for this self-proclaimed oil capital of Europe. Eleven 191-meter wind turbines operated by Vattenfall spin off Aberdeen’s coast, visible from the beach promenade, which could also support tidal energy initiatives.
Paul de Leeuw, a former Shell and BP worker now at an Energy Transition Institute, says combining oil and gas with wind, tidal, carbon capture, and hydrogen could lead to “more energy potential in the North Sea than we’ve seen in the past.” The concern remains that oil and gas could disappear too quickly before greener alternatives are ready. “If done correctly, we can use the skills and supply chains from one industry to boost another,” he explains. “The alternative is a steep decline, where everything halts and we face the consequences.”
As the wait began for Aberdeen to see if the new Labour government would support growth in Wednesday’s Budget, Chancellor Rachel Reeves announced £40 billion ($51.9 billion) in new taxes.
Aberdeen’s chamber of commerce stated that business confidence is lower than during the 2008 financial crisis or the peak of Covid-19. Mutch warned that any tax increase would be “too much to bear” for some operators.
The Budget brought mixed news for Aberdeen. The expected profit levy rose to 38%. An end date of 2030 was provided along with a consultation next year about future windfall taxes.
While the allowance for investment in tax rules was partially extended, signaling that the government was listening, the chamber’s CEO Russell Borthwick argued there was “no justification for a super tax on ‘windfall profits’ that no longer exist.”
Though Labour’s plan for a state-owned clean power investor, GB Energy, to be based in Aberdeen has been positively received, uncertainty remains about its future impact, said Mutch. About one in five workers in northeast Scotland are connected to the offshore industry. “The number of oil and gas jobs is decreasing in the North Sea. While there are new jobs, they aren’t being created at the same pace as renewable jobs,” he said.
Plans for a green transition are underway in Aberdeen. The floating Aberdeenshire wind farm, Green Volt, was approved in April and is touted as the world’s largest. GB Energy comes equipped with £8.3 billion ($10.78 billion) to invest in clean energy projects. BP has committed to a new hydrogen hub in Aberdeen for producing and storing clean fuel.
Labour is investing billions into a new National Wealth Fund for ports, green hydrogen, and carbon capture. Sustainable farming efforts are underway in Aberdeenshire, and salmon rivers are being restored to protect wildlife from climate change. Decommissioning oil rigs has also become a significant industry.
David Innes, a retired head teacher and chairman of Aberdeen for a Fairer World, highlighted the positive sustainable development efforts in northeast Scotland. “We could do more to promote our success stories and potential, showcasing our leadership in this area,” he said.
However, locals are aware that oil and gas still hold sway in politics. North Sea drilling is part of Aberdeen’s history, celebrated in museums where workers share their experiences. “Maintaining hydrocarbon supplies is vital for our economy,” noted an installation manager from Tern Alpha.
Student Lisa Heinzler, who researched sustainability in Aberdeen, expressed frustration in getting oil companies to discuss their sustainability efforts beyond public statements. “They seem okay with their starting point in the sustainability journey,” she said.
Britain’s peak oil production was in 1990, and output has steadily declined after a brief surge in fossil fuel trading while Europe sought alternatives to Russian gas. The global race for clean energy is on, following agreements made at COP28 in the UAE to triple the world’s renewable energy capacity by 2030.
Aberdeen possesses an industrial supply chain and expertise in sub-sea engineering. Applications recently opened for companies wanting to join the offshore wind supply chain, with 75 out of 135 UK companies involved located in northeast Scotland. Experts estimate that 90% of the North Sea workforce has transferable skills for green industries.
Making a successful energy transition requires a skilled workforce, a supply chain, and an integrated energy ecosystem, all of which “are abundantly available in northeast Scotland and Aberdeen,” said Prof. de Leeuw. “If we manage the transition well, we can establish an energy powerhouse for decades to come.” This represents both a significant opportunity and challenge for the city; get it wrong, and it risks losing capacity as people move on to different jobs. For Aberdeen, the chance to reinvent itself is within reach.
