THE Scottish Council Development and Industry yesterday warned that the damaging acts to the UK economy of abandoning oil and gas developments to the West of Shetland far outweigh the environmental risks.

The council is to invite Greenpeace to address it about concerns and has urged the industry to begin talks with the environmental organisation.

However, that seems unlikely as a spokesman for the United Kingdom Offshore Operators' Association (UKOOA), who attended the meeting, indicated that they would only discuss the issues on a non-confrontational basis with Greenpeace.

The council, which has a number of oil industry members, yesterday accepted a report by its North-east area manager Dugald Cantlay. The report said that while it was easy to indulge in the moral-philosophical rhetoric over the use of hydrocarbons and their possible effect on the environment the reality in the developed world was a near total dependence on their use.

Mr Cantlay said that as the main opponent of the Atlantic Margin development, Greenpeace was dependent on media response to give leverage to its actions and made many of its demands from a moral or emotional standpoint.

He said that if the Atlantic operations were closed down it would mean, in the short term, that:

• £610m already invested would be written off.
• The net present value of £1830m would be written off.
• The earlier loss of UK self sufficiency in energy.
• The earlier loss of UK's share of the world market in crude oil and natural gas.

In the longer term he predicts it would mean:

• Significant loss of investment, jobs, export revenue, research, development, and other activities.
• Increased costs in social security and unemployment benefits.
• Loss of associated manufacturing industries.
• Loss of oil and gas investment to other countries and areas of the world.

Mr Cantlay said:"In effect, such a shut down would result in the premature run-down of the UK oil and gas industry with all that entails for the economy, for jobs, and for the UK industry in world-wide terms.

"This would only hit areas like Aberdeen and Tyneside, or the Highlands and Islands economies, but would have wide ranging effects on manufacturing and service industries throughout the whole of the UK."

The Council accepted the view that abandoning the Atlantic Margin development would probably result in much less environmentally conscious levels of production increasing elsewhere.

The report says:"The North Sea development took 15 years for significant production levels to be achieved and despite changes in technology, a similar time frame must be realistic for the Atlantic Margin.

"It is thus vitally important to continue the exploration and development of the area as a priority, located as it is with easy access to Orkney, Shetland, mainland Scotland, and main shipping routes."

Mr John Wils, Aberdeen director of UKOOA, said although individual oil companies had met with Greenpeace the industry as a whole had not had any formal meetings with them.

Mr Wils said: "We have ongoing dialogue with many of the non-Governmental organisations. We also have been sharing with Greenpeace and other organisations many of the environmental studies which the oil industry has been doing in the Atlantic Margin areas and from these environmental studies there does not appear to be any significant concerns at this stage.

"I will report back to UKOOA the recommendations that have been made at this meeting. We would meet to discuss these issues on a non-confrontational basis but so far the Greenpeace campaign has been totally confrontational."

Mr Wils emphasised that if the oil was not produced in UK waters it would be produced elsewhere in the world.

He said: "The Atlantic Margin represents about 0.14% of world reserves and if there is a curtailment of exploration there that oil will get produced elsewhere in the world and it will be produced in a less environmentally friendly manner.

"The issue here is really deep water drilling and the concern being expressed by Greenpeace is that this is a new technology for other areas of the word."

Mr Cantlay said: "Atlantic Margin development was not new and there has in fact been activity there since 1972."

"During that time there has been no discernible adverse effect on the fishing industry, bird life, cetacean migration or any onshore pollution."