Chamber and committees

The production of natural gas from the North Sea is declining, but remains important for energy system security and flexibility. While Scotland is currently more than self-sufficient in natural gas production, by 2025, the UK is expected to be importing 67% of its gas from outside the UK.

In a hydrogen future scenario, as set out in a scenario in the Scottish Energy Strategy, increased gas demand would be met from a variety of sources by 2050, including a large share of imports of both natural gas from Europe and LNG from world-wide markets. While hydrogen can be generated from electrolysis of water, and there are obvious opportunities for Scotland to harness its very substantial renewable energy resources to this purpose, LNG can also be used to produce hydrogen via a process referred to as ‘steam methane reformation’; this process is thought to be cost-effective and can be rendered carbon neutral when combined with carbon capture technologies.

LNG and Liquefied Petroleum Gas (LPG) play a crucial role in supplying energy to the Scottish Independent Undertakings (SIU’s) located in Oban, Campbeltown, Wick, Thurso and Stornoway. These towns have separate networks which aren’t directly connected to the main distribution networks, but maintain the consumer benefits of utilising gas.

Heat accounts for 52% of the energy consumed by Scotland’s homes and businesses, with 79% of Scottish households using mains gas as their primary heating fuel. Both figures show the extent to which Scotland currently relies on natural gas.

Our commitment to energy efficiency, and the growth of more diverse heat networks, means that demand for natural gas is likely to reduce; however, natural gas will remain an important part of Scotland’s energy mix for the foreseeable future. Meeting this demand, and balancing the needs of consumers with a lower carbon secure energy system, will be a key challenge.

Alternative hydrocarbon sources

New and innovative ways of using hydrocarbons are already emerging, and will continue during the coming decades.

Rising demand for alternative hydrocarbon resources in the form of LNG (Liquefied Natural Gas), LPG (Liquefied Petroleum Gas) and CNG (Compressed Natural Gas) could potentially reduce emissions – especially when derived from bio-sources. The marine, power generation, industrial, road transport and residential sectors could all play a part in pushing up demand for these alternatives.

We support the uptake of these energy streams, where the current infrastructure is able to meet the expected growth in demand. Investment could support economic development, safeguarding and creating jobs in the energy sector.

Our transition to net-zero will be just and fair to everyone so that no-one will be left behind. We are now looking across our whole range of responsibilities to make sure we continue with the policies that are working and identify areas where we can go further, faster. However we need the UK Government to act in ‘reserved’ policy areas, such as the regulation of the gas networks, that are not yet devolved to the Scottish Parliament and Scottish Ministers. The Committee on Climate Change has been explicit that “Scotland cannot deliver net-zero emissions by 2045 through devolved policy alone”.