Shetland’s Oil Boom: the development of North Sea oil
Sullom Voe Oil Terminal
The advent of the North Sea oil industry had a great impact on Shetland. It was a pivotal point in the island’s history, accelerating Shetland into the modern, industrial era, creating a boom in the island’s economy.
North Sea oil was discovered in the 1960s and a terminal was planned for a 1,000-acre site on the northeast shores of Sullom Voe in the North Mainland. The 1970s saw a flurry of construction to make ready for the first barrels of oil coming ashore in 1978. Sullom Voe Oil Terminal was the largest oil terminal in Europe at the time, and employed 6,000 workers during construction phases.The infrastructure required for a terminal of such magnitude was a real feat of civil engineering, unlike anything Shetland had ever seen before. It helped stem a gradual decline in population at a time when post-war jobs were hard to come by and opportunities few. With major road networks installed from north to south, new piers and jetties built at Sella Ness and Lerwick, it was a project of epic scale for a small island population.
The terminal has no refinery capabilities, and is used as a storage facility before oil is shipped on to global markets. At peak times, the terminal handled an incredible 7 billion barrels of oil annually. The council negotiated a good deal with investors and, for every barrel of oil landed in Shetland, the community got a percentage of the profit, held in a charitable trust fund that has been used to fund many of the social enterprises, care, leisure and education facilities and the subsidised inter-island ferry network. As a result of North Sea oil, Shetland, which once relied solely on fishing and crofting, is a relatively prosperous island with a steady population and very low unemployment.
Today the oil industry makes up around 15 percent of the local economy and employs around 1,000 people, with fishing and aquaculture contributing towards half the economy. It is worth around £90 million to the local economy, handling around 90,000 barrels of oil a day which comes ashore via pipeline from 25 offshore oil fields that are then collected by around 75 tankers a year from Sullom Voe, now operated by EnQuest.
In 2016, a Total natural-gas processing plant opened nearby, employing around 300 people and providing around eight percent of the UK’s gas needs – enough for around two million homes.
Oil has given Shetland the infrastructure and funds to allow a thriving economy, an exciting arts scene, and plenty of job opportunities for young people who wish to remain in the islands.
to discover more about shetland’s economy and island life today, pick up a copy of our guidebook.
The future?
Sullom Voe Oil Terminal is still in use today, although the amount of oil it handles is much reduced since that of the peak oil boom. Recent proposals to open up new oil fields in the region have been met with mixed feelings both locally and nationally as more emphasis is placed on a move away from fossil fuels.
Centrally located in the Shetland Mainland, the Viking Energy Wind Farm is in the final stages of constructing a 103-turbine, 443MW onshore wind farm that will harness Shetland’s wind and export power to the national grid via an interconnector cable that runs between Shetland and the Scottish mainland.
Offshore, plans are underway to build two large wind farms at sea.
Both these wind farms have been met with significant local opposition owing to their locations either within an area of blanket “carbon-storing” bog and or prime fishing grounds. Viking Energy Wind Farm will be in full operation by 2024.
At a more micro level, many community buildings and some private homes use small turbines to meet their energy needs and several Shetland companies install modern heat pump heating systems and other green initiatives, such as solar power, to homes throughout the isles.
