Nicola Sturgeon's plans to fund indy Scotland branded 'environmentally and economically reckless'

In the 2014 independence referendum, the Yes campaign relied heavily on oil – with Alex Salmond making a bold claim that the North Sea industry belonged to Scotland.

READ MORE: Oil and gas giants 'commercially nervous' over new North Sea licensing round

But since the first vote on independence eight years ago, the climate crisis has been placed at the centre of the political agenda.

Burning fossil fuels is politically toxic with voters, with the North Sea oil and gas sector in the firing line for climate campaigners across Scotland and the UK.

In her keynote speech at SNP conference on Monday, the First Minister announced that a new £20bn fund will be set up in an independent Scotland with oil revenues and using the Scottish Government’s borrowing powers to kickstart the new country’s economy.

Nicola Sturgeon at SNP conference (Image: PA)

Asked by The Herald about the reliance on fossil fuels to boost the economy of an independent Scotland, Ms Sturgeon defended the strategy.

She said: “You can’t switch off oil overnight so you are going to have revenues for a period of time.

“Those revenues should be used to further advance the transition away from fossil fuels.”

But environmentalists have warned that an independent Scotland will need to "urgently shift away from oil and gas" if the country is to keep its progress in tackling the climate crisis on track.

Friends of the Earth Scotland's head of campaigns, Mary Church, said: “Oil and gas are destroying our future so it would be environmentally and economically reckless to attempt to build a new country with the revenue they generate.

"Climate science doesn't care about the constitution and every new fossil fuel project anywhere speeds us closer to climate breakdown.

"An independent Scotland would have to heed this physical reality and urgently shift away from oil and gas to reliable, affordable renewables as part of a just transition, as the UK must. "

She added: "Ending fuel poverty, decarbonising homes and supporting community renewables does not depend on the constitutional settlement.

READ MORE: Nicola Sturgeon calls on West to 'move faster' and follow lead on climate loss and damage

"The Scottish Government should use their existing powers and prioritise investment in these areas to get a move on with this agenda that is all the more critical in light of the cost of living crisis.

“Any money that was potentially brought in from fossil fuels to an independent Scotland should be going to compensate the people who are bearing the brunt of climate impacts. Communities on the front line, like those being hosted by the Scottish Government this week, are entitled to reparations from rich historical polluters.

"An independent Scotland should be paying climate reparations for the damage caused by using fossil fuels, not pouring more fuel on the fire and trying to profit from the misery they inflict.

“Oil revenues will be significantly reduced in the coming years given the huge subsidies that companies have secured in the form of tax relief for decommissioning their platforms in the North Sea.

"The tax regime for fossil fuel companies in the UK makes it the most profitable place to operate in the world, so unless the First Minister is indicating that major polluters will be taxed properly and tasked with cleaning up their own mess in an independent Scotland it's hard to see this actually generating much income."

READ MORE: Scottish Government's delayed energy strategy to tackle demand for oil and gas

The Scottish Greens, who are in government with the SNP at Holyrood, are understood to be supportive of the idea in the context that fossil fuels would be phased out, but believe that for as long as they are produced they should be properly taxed and that cash should go towards the just transition.

Scottish Greens energy spokesperson Mark Ruskell said: “We are phasing out fossil fuels but we aren’t turning off the taps overnight, so for as long as they are produced they should be properly taxed and that cash should go towards the just transition.

"We cannot drill our way out of the climate crisis, which is why we need to invest in clean, renewable jobs of the future.”

But the First Minister has been accused of “hypocrisy” by her political opponents – amid claims the Scottish Government is not supportive of the North Sea oil and gas sector.

Liam Kerr, Scottish Conservative shadow energy secretary, said: “After years spent talking down domestic production of oil and gas, Nicola Sturgeon's supposed conversion shows her opportunism is matched only by her hypocrisy.

Liam Kerr

"Apparently, all it took for her to appreciate the North Sea was a trip to Aberdeen.”

He added: “But she has some nerve promising an oil fund for Scotland — only after independence of course — when the SNP have abandoned the industry and those it employs.

“Having denied the need for energy security by increasing domestic production, Ms Sturgeon only backs our North Sea industry when she decides it can help her obsession with another divisive referendum.

"This rehash of Alex Salmond's 2014 separation plans will not deceive the tens of thousands of Scots who know the SNP-Green coalition would happily turn off the taps tomorrow and throw them out of work.”

The First Minister stressed that the new fund could help pay for net zero policies in a future independent Scotland – with many measures currently without a funding route.

Scotland's strategy to decarbonise buildings in the next decade will require an estimated £33bn, while only £1.8bn has so-far been allocated by SNP and Green ministers.

Speaking at the SNP conference, Ms Sturgeon said the party, in a future independent Scotland would “invest remaining oil revenues and use our borrowing powers"to "set up an independence investment fund”.

READ MORE: Nicola Sturgeon doubles down on referendum plans

She told delegates that the Building a New Scotland Fund will “deliver up to £20 billion of investment in the first decade of independence”.

Ms Sturgeon insisted that the revenue could “support a massive programme to decarbonise housing, cut fuel bills and reduce fuel poverty”.

She added: “It could finance the building of thousands more affordable homes, invest in local renewable energy projects, helping communities own assets and wield more influence over their use.

“It will help the transition to net zero, build resilient communities and kick-start the sustainable economic growth so important for our newly independent nation”.

Ms Sturgeon told SNP members that the policy would combine “Scotland’s abundant resources with the powers of independence to benefit this and future generations”.