Outside Pittodrie Stadium, the seaside home of Aberdeen football club, stands a statue of Sir Alex Ferguson with his arms aloft.
The bronze sculpture commemorates the legendary manager who led the Dons to a famous win in the 1983 European Cup Winners’ Cup when they beat the mighty Real Madrid.
Many football fans think his achievement in taking the unfancied and unfashionable Scottish club to continental success surpasses all Fergie went on to achieve as Manchester United’s most celebrated coach.
The unlikely rise of a local team built on a shoestring also coincided with the North Sea drilling boom that turned Aberdeen into the oil capital of Europe.
Sadly for both, those glory days are a fading memory.
The oil and gas sector has seen the number of people employed – whether directly or indirectly in the supply chain – halve to around 200,000, according to industry lobby group Offshore Energies UK.
Once a hotspot for its offshore energy, Aberdeen has seen the number residents employed in the sector dwindle and house prices plummet
Once a hotspot, house prices in Aberdeen have plunged, too. The average property now costs £137,000 – less than half the UK average, according to valuation experts Hometrack.
Gone are the days when the Granite City boasted the highest concentration of millionaires in the UK and modest three-star hotel rooms would cost guests upwards of £370 a night.
Now another dark cloud hangs over this once-booming city, with plans for a ruinous tax grab by Labour that could devastate the industry and kibosh plans to switch from fossil fuels to green energy.
Such is the outrage at the proposals that Conservatives, Scottish National Party and even the Labour-supporting unions have formed an unlikely coalition to oppose them.
Unless the government backs down from its tax raid, the local chamber of commerce says another 100,000 jobs could be lost in the industry along with £30 billion of investment.
It means a highly uncertain future for Aberdeen.
Locals half-jokingly call it the ‘Silver City’ as the mica in the pale granite that was quarried nearby and used to make so many of its buildings sparkles in the sun. But on a quiet, wet Monday in July, Aberdeen has a distinctly grey look and feel to it.
North Sea oil and gas production peaked in 1999. The UK, however, remains a substantial producer and the energy sector remains a big employer, especially in the north-east of Scotland.
As oil and gas reserves dwindle, the city is re-inventing itself as a hub for developing new technologies for the ‘energy transition’ away from fossil fuels towards a net-zero, decarbonized future.
But even that transition – which all parties agree needs to happen – is under threat from Labour’s plans, experts say.
North Sea producers already endure a 35pc windfall tax introduced by the Conservatives after energy prices spiked following Russia’s invasion of Ukraine.
It runs until 2029 and takes the total tax burden on oil and gas firms to 75pc – among the highest in the world.
To ramp up the move to renewable power, Labour has vowed not only to raise the levy by another three percentage points but to also scrap tax breaks on profits that are re-invested in fossil fuel production.
Labour plans to ban new drilling in the North Sea, too.
Many players in the energy sector are warning that Sir Keir Starmer’s plans will result in a highly uncertain future for the city
The threats have sent shockwaves through the city, raising fears that even higher taxes will sound the death knell for the North Sea oil and gas sector – hitting future tax receipts and energy supplies in the process.
‘There’s this misunderstanding which is that somehow we’re a golden goose and we’ll just keep laying eggs,’ says David Latin, the oil industry veteran who is chairman of Serica Energy, an Aberdeen-based producer.
‘But if you don’t feed the goose with investment, it’ll keel over and there’ll be no more eggs.’
Serica Energy is one of a trio of companies – along with Jersey Oil and Gas and Neo Energy – which have already delayed by a year the planned start of production at the Buchan Oil Field 120 miles to the east of Aberdeen.
Mr Latin recently compared the situation to the ‘war zone’ he experienced when working in Libya.
He told shareholders: ‘I have never encountered a situation which was so challenging when it comes to making investment decisions, and planning for the future more generally, as it is in the UK at present.’
At least when the war in Libya was over everyone agreed that oil production should continue, he told the Daily Mail.
‘In the UK it’s not so clear. It feels like no one wants us anymore,’ Mr Latin lamented. ‘Trust has been damaged on both sides. The rules keep changing every five minutes.’
Mr Latin is not alone. Andy Shirreffs has worked in the North Sea for 14 years.
The 55-year-old electrical technician hopes to stay in off-shore work until he retires but fears for his younger colleagues.
‘Labour have got to hear the message but they’re not listening,’ he says.
There was ‘no training plan’ for the transition from oil and gas to renewables, he adds. ‘We don’t have any ideas on how we actually are going to do this’, he says, warning it could end like the ‘disaster’ that hit mining communities when many coal pits were closed in the 1980s.
The sector’s air of despair and trepidation is spelt out in a recent survey by the Aberdeen & Grampian Chamber of Commerce, which represents local business interests, and accountancy firm KPMG.
Sir Keir Starmer’s government has just 100 days to convince the industry that the North Sea has a viable future, the report warns.
‘Failure to do so will result in the current apathy turning to open revolt where companies move on to countries which offer more favourable regimes and better returns,’ it adds.
That could see 100,000 jobs in the UK oil and gas industry disappear – with the loss of investment worth £30 billion and tax receipts totalling £20 billion by 2029, the report says, citing investment analysts.
‘Should this transpire, our path to net zero could look more like a road to nowhere,’ says Aberdeen & Grampian Chamber of Commerce chief executive Russell Borthwick. ‘Confidence is at rock bottom.’
Net zero plans will scupper Aberdeen’s ability to make the most of its oil and gas reserves
It shouldn’t be like this. The oil price remains at a relatively high $80 a barrel but there is not a stetson to be seen on the subdued streets of Aberdeen.
While the Stetson was the quintessential hat of the American West – worn by cowboys and oil workers alike – it was until recently also a regular sight on the streets of this proud Scottish city.
‘The city should be booming,’ says a local taxi driver. ‘But it’s slow.’
‘In theory, the outlook should be better than ever,’ agrees Mr Borthwick.
‘Higher energy prices would normally mean more investment in the North Sea – with profits, in turn, pouring into off-shore wind and other renewables projects.
‘But industry is clearly fearful of what potentially lies ahead.’
Having ditched a £28 billion-a-year green investment pledge, Labour has lost no time in office setting out plans to meet its target of zero-carbon electricity by 2030.
Chancellor Rachel Reeves has ripped up planning rules by ending a de facto nine-year ban on on-shore wind farms and launched a National Wealth Fund to help industries reduce their own carbon footprint.
It will invest an extra £7.3 billion in high-risk projects, including carbon capture and storage in the North Sea, in a bid to make Britain ‘a clean energy superpower’, Energy Security and Net Zero Secretary Ed Miliband said.
A new build development in the city. The decline in energy profits means a highly uncertain future for Aberdeen
A bronze sculpture commemorates Sir Alex Ferguson, the legendary manager who led Aberdeen to a famous win in the 1983 European Cup Winners’ Cup when they beat the mighty Real Madrid
But oil and gas producers are still waiting for more details about GB Energy – a separate green investment fund designed to decarbonise the power they supply to the national grid.
And the Government has been forced to deny reports that Mr Miliband has overruled his officials and banned the North Sea regulator from issuing any outstanding drilling and exploration licences, including those that were in their final round of approval.
The Department for Energy Security and Net Zero said there was no change in policy. It will not issue new licences for new fields and will not revoke existing oil and gas licences, it said. Existing fields would be managed for the entirety of their lifespan, it added.
‘We’re at an inflexion point,’ says David Whitehouse, chief executive of Offshore Energies UK, which represents more than 400 energy companies.
‘We see this sector as a real engine for economic growth, but we do have some real concerns [about Labour’s plans]’, he adds.
The Office for Budget Responsibility, the spending watchdog, reckons its will cost £1.4 trillion to get to net zero. Experts say most of the money will have to come from the private sector.
‘We need an environment that [encourages] that investment,’ says Mr Whitehouse. ‘Things such as windfall taxes are a barrier to that.’
He fears that if the transition to net zero is poorly managed, without industry input, there could be ‘a hard stop’ to investment in the sector.
Mr Whitehouse also points out that three quarters of the energy used in the UK still comes from oil and gas – and half of that from domestic producers.
Even by 2050 – when the government is legally committed to hitting its net zero target – the Climate Change Committee reckons up to a quarter of Britain’s energy needs will still be met by fossil fuels.
And between now and then around half the country’s energy will come from oil and gas.
For example, there will still be 20 million homes heating and cooking on gas by the end of the decade, Mr Whitehouse notes.
But if investment dries up the UK will end up importing 80 per cent of its gas needs, compared to just half now.
‘We should priortise jobs over imports,’ says Mr Whitehouse. ‘National security is energy security.’
Labour’s manifesto recognises North Sea oil and gas will be here to stay for decades to come and that the energy transition should be done without jeopardising jobs.
‘We will hold them that,’ he adds.
It is not only the oil and gas producers that are opposed to Labour’s North Sea tax plans.
Both the Conservatives and the Scottish National Party campaigned hard against them during the Election.
The Tories won two of the Aberdeen area seats up for grabs with the SNP bagging the other three, including that of Scottish Conservative leader Douglas Ross.
Both parties have also made common cause with the unions, who are urging Mr Miliband to re-think the North Sea licence ban.
Even Labour-backed union workers object to the party’s ‘irresponsible’ green future, saying there is no stable plan behind its path to net zero
Sharon Graham, general secretary of Unite – Britain’s biggest union and a major Labour backer – describes the policy as ‘irresponsible’.
‘There is clearly no viable plan for the replacement of North Sea jobs or energy security,’ she says.
‘We should not be letting go of one rope until we have hold of another.’
And the cross-party consensus is growing.
Nearly 200 firms joined Unite in signing an open letter calling for Labour to drop the licence ban until there is a detailed plan to protect thousands of jobs.
‘We need Labour to make the right choices,’ says Peter Lawson, Unite’s senior organiser. ‘We’ll be holding Sir Keir Starmer’s feet to the fire.’
Perhaps Sir Alex Ferguson could also lend his support to the union’s cause.
The former shop steward and a lifelong Labour supporter is famous for the ‘hairdryer treatment’ he meted out to players he fell out with.
On this occasion, a quiet word in Sir Keir’s ear might be just enough to make the Labour leader see some sense.
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