Who should own and benefit from Scotland’s natural resources is an old debate. The 1970s play The Cheviot, the Stag and the Black, Black Oil tracks the history of the Highlands and Islands. It maps violent evictions of rural communities and the vast swaths of rural land turned into a hunting playground for the ruling class, to the arrival of North Sea oil production. The play culminates in the discovery of North Sea oil and the promises of the wealth it would bring to Scotland’s communities. It ends with a crestfallen prediction that this would not translate into widespread benefits for Highlands and Islands communities. 

 

The most notable exception regarding community wealth deriving from oil production is that of Shetland. The Zetland County Council Act of 1974 provided the legal framework to enable Shetland to receive oil-related funds. Importantly, as a percentage of the total value of oil and gas that passed through Shetland, the value retained by the community was strikingly small. Despite this, it was enough to create significant community wealth.  

 

While the isles sat at the heart of North Sea oil and gas developments, revenues from the oil and gas industry are in steady decline as renewable energy grows - and Shetland is set to play an important role in the transition to net zero. 

 

The achievements of the 1970s highlight the importance of robust policies and negotiation with industry and government to build community wealth from energy developments. Oil-related cash flows in Shetland resulted in the accumulation of significant reserves for the community. Now, as Shetland hurtles towards another industrial transition, the question of who should own and benefit from natural resources has reared its head again. 

 

The need rapidly to transition to net zero energy is clear but how we do so - and who benefits from it - matters. Shetland’s role in securing community wealth in the oil era can act as a useful guide to securing local rewards from renewable generation. Today, as the isles undergo a dramatic rise in renewable generation, Shetland presents an early test case for the just transition, providing valuable insights for other impacted communities throughout Scotland.