The devil you don’t know
Power Of Scotland is a newspaper about the power industry, given away as a business supplement with The Times. An alert contributor pointed us to an intriguing article in the latest edition from regular Scotsman columnist Peter Jones, offering a more nuanced account of the industry’s view of independence than you might expect.
If you’re pressed for time we’ve pulled out a couple of the more interesting passages.
“Scottish independence doesn’t just put Scottish public finances in a better position, it also puts the UK in a worse place.”
“Would an independent Scotland be advantageous to the industry or not? The key word here is “stability”. Arguably, the UK government blew that card when it hiked supplementary taxes in the March 2011 budget and, despite subsequent concessions, many in the industry still feel angry about it. So there is an argument for saying that the devil we don’t know might be better.”
As the UK government continues to publicly rubbish the oil industry’s prospects with suspiciously gloomy predictions of lower production and prices – which surely can’t do oil company shares any good – it’ll be fascinating to see which way it might jump.
Imagine how fantastic Scotland could be if everyone talked up its prospects instead of talking them down.
Maybe yesterday’s front page Herald is a sign of things to come.
I don’t necessarily think the oil industry has to jump one way or another. If they’re honest about the longevity of current and future reserves, licensing, exploration and investment then the business case stands resolutely. The good thing is that a lot of these facts are already in the public domain. We just need to make these *solid and unimpeachable* to kill this “oil runs out a week on Tuesday and we can’t give the stuff away” unionist lies…
Would be good if Scottish Skier could chime in later, think oil geology is part of his day job.
Well at least the article is fairly open in its approach to industry V government political strategy. Scary to be sure, but it has to be said, with the backing of major oil companies behind the SG a 2014 win would be that much closer.
How come these informed insiders like Peter Jones are only now tumbling to the facts that anyone with half a brain would have surmised years ago?
Of course the UK ‘(Grand Style)’ is going to be a helluva lot worse off without the future trillions from oil and gas. It also wouldn’t take an ‘einstein’ to work out that if you have an asset at your disposal, such as a partner’s riches, then you really should keep that ‘sweetheart deal’ nice and cosy.
So what do you do – not? You don’t irritate your compliant partner to such an extent they want to get rid of you and on Christmas card terms only. You don’t set about biting the hand that feeds you by screwing them with ever-more punitive taxes. You don’t waste the family silver hoard on dalliances just to strut your stuff on a world stage that is already morally imploding.
Looks to me like the grand strategy to misinform, propagandise, lie and generally be a stoopid pain in the arse to everyone around you has backfired big-time and your bags have been packed and are sitting at the door.
While we are on the subject…
Norway’s oil fund, one of the biggest investors in the world, rose in value by 13.4% last year, its second-best performance ever.
The central bank said the fund’s investments in shares jumped by 18.1% in 2012, boosted by soaring equity indexes around the world.
It is now worth 3.8tn krone (£450bn; $670bn), up from 3.3tn krone in 2011.
link to bbc.co.uk
That’s an excellent article – to anyone reading the comments without having read the screenshot, I highly recommend you go back and do so. If only more of the press would write in this fashion I’d have no fears about the referendum.
I’ve Googled the title of the article, with no result which is a damn shame – it deserves some internet exposure.
Just another thing – the big question is – who was the stoopid SOB who screwed up this neat little arrangement called the UK and thereby bugg**ed the other side arrangements of other interested parties – like Trident owners for example?
off topic but WordPress sends out email notifications when you post something new but when you click on “read more of this post” it directs you to the old site. The trials and tribulations of moving site I am afraid.
The oil industry is centred on North East Scotland. The SNP’s heartland is North East Scotland. I think there might be a wee hint there about the oil industry’s view of independence.
I recently heard a comment that Aberdeen was now second to Houston in the oil industry.
Is this true?
Well the super soaraway has come up with another beezer today as follow up to last weeks slap for ‘better no’.
link to thesun.co.uk
Make of this what you will, but it will reach a few bods out there.
Holebender – don’t be too certain. Aberdeenshire may be to the SNP what Glasgow is (was?) to Labour, but Aberdeen itself is a different kettle of fish. This is a city which contains the postcode with the second highest concentration of millionaires in the UK (Rubislaw Den, presumably), and we all know how conservative millionaires tend to be.
There are a lot of “I’m all right, Jock” types in Aberdeen, the type of No voter who opposes independence on the basis that their life is fine as it is and they so no need to change it. I know because I’ve been surrounded by them all my life.
I’m not sure I like this article. It’s basically the oil industry waking up to the power it has to hold guns to the heads of governments to get its own way. As with the Murdoch empire and other big business, there is plenty the UK government can offer to bribe these folk to stay on message firmly against independence. There is less the Scottish government can do, and even less that we – as Scottish people – might want them to do to bribe big business, oil interests, Murdoch etc.
None of these people have the interests of Scotland or the Scottish people at heart and will leap to whichever side makes it most in their interests.
I wonder if the current Falklands referendum is related to what is going on back home. There are apparently large potential oil fields in the Falklands. If Scotland votes yes in 2014, and 90% of UK North Sea reserves are lost, it would be really useful for rUK if another big source of oil comes on tap. A referendum to secure the oil reserves? Are they planning something? Do they know something? The Argentines are becoming increasingly agitated and it’s not just about the Falkands referendum!
With regards to oil and gas, Newsnet have this piece which is also very interesting:
link to newsnetscotland.com
Then, we have the massive Scottish North Atlantic sector oil and natural gas fields, off Scotland`s west coast, which is predicted to contain two or three times the amount of oil and natural gas as the Scottish North Sea sector. The Scottish ‘Atlantic Frontier’ for oil and natural gas goes way out beyond Rockall. London has earmarked over 2500 licensing blocks for sale in the Scottish North Atlantic sector.
Its published under opinion – however it opens up the discussion on just how much oil and gas Scotland has access to within its own boundaries – food for thought.
One thing to remember is that the oil industry does business worldwide, in places such as Libya, Iraq, Equatorial Guinea,Angola, Nigeria, Sudan etc etc. To suggest that the oil industry would pull out of a European democracy because it disagreed with independence always struck me as bizarre (not least cos I work in the oil industry) so it’s refreshing to see someone write sensibly about it.
Anyway I was going to post my RANT on the old site, but here goes…….
From http://www.hse.gov.uk:
“Grampian Police exercise jurisdiction over all installations in Scottish Waters of the North Sea above 55° 50′ North. Scottish Law applies…..”
This has long been established – by a non-SNP UK government, at least as far back as the early 1980s. The latitude is actually just below that of Berwick-upon-Tweed on land. This means that the UK government has long accepted that the national maritime border between England and Scotland is a straight line due East at 55deg 50′ N until it intersects the maritime border of Denmark. More or less a horizontal continuation of the Scotland-England land border. As a former oil economist with RBS Alex Salmond will be well aware of this.
As an oil worker, I can tell you there is an empty area of sea around the border, with the Scottish (mostly) oil fields to the North and the English gas fields to the South.
Any attempt to move the border so that it slants upwards as you follow it East will gain little by way of reward unless you make it really, really, outrageously go North-East from Berwick-upon-Tweed. However, you will start to have a few problems then.
You’d have to rebuild a lot of oil infrastructure, including pipelines, a heliport and so on at Berwick rather thanat the current locations, Aberdeen and Shetland. Until you did this you might not get a lot of oil back to shore or personnel to the rigs themselves, unless you ask Sikorsky to build some long-range helicopters. Maybe the friendly Scottish Government could let you rent existing facilities?
Northern England has a shortage of deep-water sea lochs or fjords for rig maintenance – actually, that’s part of the reason why the UK’s nuclear deterrent isn’t stationed on the Humber or the Norfolk Broads.
Anyone else in the oil business care to comment? No-one ever seems to point out the obvious when it comes to the oil “debate”.
Ach Doug, there are also poor areas in Aberdeen where large majorities probably support indepenence already. The big problem we have is that half of them aren’t registered to vote, and the half of those that are probably won’t bother to vote.
Companies are normally agnostic to government as long as their profits are not threatened. The oil industry is geographically tied to its reserves so they can’t threaten to move to Switzerland.
the main thing often missed in the oil debate is that it always focuses on the oil tax, whilst forgetting corporation tax,PAYE etc etc
I see that the Scottish Govt’s Oil Bulletin is out and despite the spin around it – seems quite measured and it shows a range of forecasts including the OBR one. Some useful information in there…
link to scotland.gov.uk
Hi Macart, thanks for the link, very interesting and heartening to see some supportive press articles for a change.
Strangely, having read the article from the link, I tried to find it from the Scottish Sun home page, without success. Ho-hum, back to the link and selecting ‘Home’ from the article took me to the English Sun home page. A search on ‘Swinney’ on the Scottish Sun failed to return the article either. Can anyone confirm that it is in the print edition? It’s certainly well hidden online.
Barontorc
Maybe it’s because his wife is no longer a MSP and he doesn’t need to undermine her by writing things the Labour Party wouldn’t want to be revealed?
@ Doug Daniel- Totally agree Doug, I live on Deeside and the strath is also full of the “I’m all right, Jock” types. Also full of tug the forelock, ‘goodlife’ and retired types. I am retired (early!) but I like to think I am still doing my bit for my country and my fellow man. Problem on Deeside is that many see themselves as Brits. due to the Royal connection, big estates and Hooray Henry’s who use the place as a playground.
As far as the oil industry is concerned everyone in the North East knows the good times are back. I said yesterday on the Herald blog that oil companies were building like klondykers setting up tents in a gold mining camp. A unionist from Aberdeen who claimed to have thirty years experience in the industry, came back at me with, it’s only the service companies who are building and they are exporting their expertise all over the world. Unfortunately for his argument that is only partially true, he forgot to tell the other half of the story. Service companies are building like cazy to serve overseas markets but also the North Sea, where investment is at record levels. I personally know of six oil producing companies (there are more) who are building or have recently built office accomodation in and around Aberdeen. They are Nexen, Taqa, Apache, BP, Premier Oil and Statoil (Norwegian state owned company, oh the irony!).
Both my sons work in the industry and both have seen official industry projections of at least 40 years of oil and gas still to be recovered. The late Dr. Richard Pike who was an oil consultant with BP and a Chief Executive of the Royal Society of Chemistry predicted in 2008 that North Sea reserves would yield at least the same amount of oil and gas as had already been been extracted. The industry’s own ‘voice’ Oil and Gas UK predicted it in its’ economic report of 2012 that “there are still substantial reserves to be recovered” from the North Sea. There are also substantial reserves West of Shetland, which are now being recovered thanks to new technology and petroleum engineers also believe that there are significant reserves off Scotland’s west coast.
In the coming days and weeks, Darling and Co. will do everything in their power to rubbish the potential of North Sea reserves. They will be telling lies. Scotland’s oil and gas reserves are the game changer in the referendum debate. The people of Scotland must be told the truth about their natural resources. Westminster cannot be allowed to squander Scotland’s wealth for a second time.
Barontorc said:
It also wouldn’t take an ‘einstein’ to work out that if you have an asset at your disposal, such as a partner’s riches, then you really should keep that ‘sweetheart deal’ nice and cosy.
So what do you do – not? You don’t irritate your compliant partner to such an extent they want to get rid of you and on Christmas card terms only. You don’t set about biting the hand that feeds you by screwing them with ever-more punitive taxes.
This was actually the take-home message of the McCrone report. He said, be nice to Scotland and do something about the chronic urban deprivation. He said, let the Scots have a decent share of the oil wealth so they can see they are benefiting from it. He said, otherwise they will get so pissed off they will vote for independence.
The Westminster government chose to conceal the report and try to conceal the extent of the oil wealth. From the point of view of people like Heath and Callaghan, it worked a treat. It worked long enough to see them out.
@ Stuart Black
It appears to be the Scotland pages of the UK site as opposed to the news pages of the Scottish Sun. Still and all any good headlines are welcome. The Daily Retch on the other hand is still sticking with the sooper top secret, hush, hush papers bull in two (yes two) stories. Even though a good number of reputable sources, several journos and of course the indy sites have thoroughly rubbished this nonsense, the Record continues its downward spiral to farce regardless.
@Macart
Yes, it does seem to be only in the U.K. edition, which I find disturbing. Yes, it’s great that articles of this nature are appearing, but we need them to be in Scottish editions, to counter the twattery of the Retard and the rest.
I agree with the statement where it said that Scotland because it is smaller would it would treat the oil companies well ( not word for word correct but this is what I think he meant ). Of course Alex Salmond has a long connection with the oil industry and understands how it all works. Not so Westminster who only want to pump the hell out the North Sea as quickly as it can be done, after all, the desperately need the revenue.
Scotland indeed being smaller, can take a longer term view, we do not have 62 million people to feed , only 5+ million. Not to hard to see that it would be easier for us to make things easier for the oil companies, within the terms of reality of course. As is proved with other successful smaller nations , the ability of being nimble is a big asset, something that the UK cannot match, nor is likely too.
I’m a taxi driver in Aberdeen and I can tell you there are at least 4 new business parks under construction. The place is booming, no recession here..
It hasn’t been lost on the industry that they are Westminster’s favourite target every time they need extra revenue and pretty soon they may do it again.
Cath said: “I’m not sure I like this article. It’s basically the oil industry waking up to the power it has to hold guns to the heads of governments to get its own way.”
I think the oil industry woke up to that power in about 1901, if not before.
link to en.wikipedia.org
@BillC Add GDF Suez to your list…..link to pandjenergy.co.uk
@MJB – Nice one, cheers.
@MJB BillC
The ground works for the site are under way now.
On a related note about resource control, today Ottawa and the Northwest Territories agreed a devolution deal that would see the territory keep half the profits from oil, mineral and gemstone sales. so that’s a territory, not even a province, with a population of about say, Glenrothes, that has more control over its non-renewable resources than Scotland does.
That’s got to mean something, doesn’t it?
It would be very wrong indeed to think that if Big Oil should come out for a Yes vote, that would be entirely good news. Big multinational companies are not evil but they tend to have interests entirely different from those of the average punter. So it’s always a good idea to pay close attention to the man behind the curtain.
And if you’re ever tempted to think of oil as an unmixed blessing, you may want to read this jeremiad against Albertan politicians [h/t Alan Trench]. Crazy! Much better to believe that oil is a finite resource, which had better be invested in a wealth fund or in infrastructure and similar sorts of spending which would produce long-term returns. One example, perhaps, would be the initial funding of universal child care, something which costs money to set up but which may pay for itself in the long run. But there are other possibilities. And you can probably think of more yourself if you try.
@Angus McLellan
All the more reason to get under Scottish control.
Seasick Daves comment about Norway’s oil fund. So their properly invested proceeds from oil now equal 3 times Scotland’s entire GDP. It must be awful having the burden of managing all that money and not knowing what to do with it.