Questionable financial and environmental assumptions made by Viking

Opinion, by Billy Fox, chairman of Sustainable Shetland

In response to Jeff Goddard’s opinion piece in last week’s Shetland Times, is it appropriate for an employee of the Shetland Charitable Trust to be expressing his opinion publicly? Surely trust opinions should be reserved for the trustees.

Pedantic perhaps, but it is an indicator of how the lines have become blurred between what our councillors, council officials and trust employees consider to be their direct remits. In short we have employees and officials behaving like politicians and councillors behaving as developers. This has become such custom and practice over the last 25 years or so that they can no longer see the lines of demarcation and where their appropriate areas of responsibility lie. Local democracy suffers and non-representation of the electorate is the result.

Going back to the first public consultation meetings held by Viking Energy, both Jeff Goddard and director of finance Graham Johnston publicly endorsed the project as the best financial prospect ever to have landed on their desks.  An amazing statement at such an early stage of an investigative process, from two individuals who would be carrying out many of the necessary impartial checks and balances.

Let us first look at the comparison with Sullom Voe and the oil industry. The projection of six times more revenue from the windfarm than the oil industry over the lifetime of the project is of course confined to trust funds. Let us compare it with what Shetland has gained overall from Sullom Voe.

The figure of £500 million windfarm income (and it must be pointed out this figure is speculative) should be compared to the combined figure of £750+ million, comprising the funds that have come from the oil industry and continue to do so.

Jeff Goddard’s intention is to focus debate on the £81 million that initially comprised the Charitable Trust, relative to the perceived £500 million from Viking Energy, conveniently sidestepping the remaining £670+ million that Shetland has reaped from the oil industry.

Although the SIC had to incur financial expenditure in providing the necessary infrastructure regarding roads and housing when the oil industry arrived, deducting this from the benefits still leaves us considerably better off. Also, the commercial risk was borne by the oil industry; unlike the risks proposed to our money that Viking Energy will pose.

The current proposal to put up £72 million from the SCT then borrow the remaining £288 million begs the question, where are the current SCT disbursements coming from during the five years it will take to get the turbines turning?

Always assuming of course that the significant civil engineering hurdles can be overcome expediently. Commercial pressures during construction will occur; with the SCT as major shareholders how will that conflict of interest be overcome when it comes to the environment?

The financial benefits gained from employment created by Sullom Voe, both directly and indirectly, are impossible to quantify but undoubtedly far exceed any employment potential with Viking Energy. Take note, it is an engineering firm from Germany which has recently been carrying out maintenance at Burradale; this is not likely to change. Specialists would also carry out the main construction; local employment would be fleeting and ancillary.

A commercial land rent for the oil terminal would generate approximately £12 million per annum, exactly what we currently take from the Charitable Trust to fund our various outgoings. Rather puzzlingly, councillor Allan Wishart said on Radio Shetland’s recent Speakeasy that if the council sat down with the oil industry and started making such demands it would be a very short meeting. We are not talking about making demands; it is about negotiation.

Total E&P UK Ltd are investing £500 million in their new gas facility to develop the Laggan and Tormore fields west of Shetland. If the SIC continues to expound on the demise of the oil and gas industry in Shetland, there can only be a rubbing of hands and expressions of delight from the oil giants. Since writing this I am pleased to note our chief executive is setting up an “oil strategy committee” to re-establish negotiation on the long-term future of Sullom Voe. This is a step in the right direction.

As financial controller of the SCT Jeff Goddard’s opinion is all to do with the financial argument. Let us not lose sight of what this windfarm is supposed to be about, combating global warming. The fact of the matter is this windfarm will do nothing to mitigate global warming; the carbon payback on building on peat moorland and blanket bog is seriously questionable. If one looks at the payback model the input data is open to challenge. It is my firm belief that this would be a carbon negative development. We are therefore looking at the prospect of irreparably damaging Shetland’s environment and bringing with it the ensuing problems in respect of quality of life, diminishing property values, damage to tourism etc.

Combating global warming is not something we can build our way out of with a technological fix. Wind generation as a primary electricity source simply does not work; in order to keep the lights on conventional backup of 90 per cent will always be required. This means researching conventional clean burn technologies is an absolute necessity. Serious attempts to curb carbon dioxide emissions must be done through energy conservation measures, combined with a varied renewable energy strategy. This wind-rush is ill judged. Damaging natural carbon sinks further is completely unacceptable; instead we should be preserving every square metre we have.

Once more I urge anyone who opposes this development to submit an objection to the Energy Consents Unit before 28th July.