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Wings Over Scotland

Yet another Union dividend

Posted on August 20, 2013 by

An alert reader (what would we do without them?) sent us this interesting graph today:


It comes from a page on the website of a heating-oil supplier, and had both our reader and ourselves scratching our heads trying to explain it. Scotland is an oil-producing nation, and almost all of the UK’s oil comes ashore and is refined in Scotland. It has less distance to travel to get to customers in Scotland than anywhere else.

So why do Scots, consistently and by a strikingly large margin, pay the most for it?

At the time of writing, that’s a rhetorical question. We don’t know the answer. One argument is that Scotland has more remote rural settlements (the kind of place that’s disproportionately likely to use heating oil rather than other forms of energy), but that doesn’t seem to stand up to much scrutiny. Wales has plenty of remote areas too, and Northern Ireland is across a sea, which you’d imagine would ramp costs up somewhat, yet it’s almost always the cheapest anywhere in the UK.

Remoteness also wouldn’t explain why the discrepancy isn’t constant. Ullapool and Mallaig don’t move around, and nor do Aberystwyth and Cardigan, so why was the difference between Scotland and Wales zero in January (when it was pretty darn chilly across the whole UK), £120 in February (still pretty darn chilly) and £70 now?

We’re probably missing something obvious. Anyone help?

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  1. 21 08 13 12:47

    Commonwealth Games | laidbackviews

96 to “Yet another Union dividend”

  1. handclapping says:

    Its obvious; Scots are richer than the reast of the UK so the market will bear more. Just like the 9.9% taxes from the 8.4% population

  2. UK Oils, trading as Scottish Fuels in Scotlandshire has a virtual monopoly in Rural Scotland on the supply of heating oil, as well as fuels. For years, they have been hiking the prices charged in many parts of the country, particularly in the islands. Look no further.

  3. Mairi says:

    As a former IT Consultant who drove all over the UK in the course of my work, my observation is the: the further away you are from where the oil is piped in or refined, the cheaper your petrol is: it’s the rule of inverse proportion.

    Living in Glasgow, it never ceased to amaze me that e.g. Shell petrol in Portsmouth was 5p cheaper, or that BP petrol in Belfast was so affordable! I believe someone might be interested in using to make a spreadsheet analysis of this trend. 

  4. G H Graham says:

    I bet it is driven by market competition. In Perthshire, I have basically three options; BP, Johnson Oils & Heating Oil Scotland which is just a brand of guess who, Johnson Oils.
    They all buy the oil wholesale from Grangemouth so the difference in consumer price is determined by their labour costs, fixed & variable overheads. And while I’m not suggesting any collusion or the operation of a cartel, when only a small number of competitors exist, it is easy to take market share and not actually have to compete because some operators just don’t have the capacity to cover all of Scotland.
    Quite how the market operates in NI is a mystery but I would guess that the competition is greater there because once the oil is onshore, its easier to move around.
    And each company is bidding for fuel oil weeks and months in advance so some make good bets and other make poor ones so a sudden rise from just one operator may be indicative of poor buying decisions.
    Oil is a commodity after all & open to anyone to bid for any amount at any price that the market will bear. We could crowd fund and buy an oil tankers worth in the hope that prices will rise above the cost by a margin big enough to make a very healthy profit. Or lose our shirts.
    Scotland’s geography & demographic spread really does work against us when it comes to the distribution of goods & services. 

  5. Murray McCallum says:

    Doesn’t Scotlandshire only have one oil refinery; Grangemouth?  Might contribute to inflated Highland prices but not Central belt where vast majority live.
    Wales seems to have two.
    Basically get the important crude oil extracted, pocket the tax, and sell the refined stuff back to those silly Scots at high prices.  Quite a few folks in the oil industry post here so will hopefully have the story.

  6. Norrie says:

    Is Scottish oil used to produce either petrol or heating oil?

  7. Bubbles says:

    You asked for help so here goes. Could it be that we’re a nation of mugs?

  8. Jr Ewen says:

    I am constantly amazed of the fuel prices in Shetland. With 2 person household 2 jobs, having 2 cars is essential. The fuel is the highest in uk even after the 5p reduction recently. Shetland is far away from Grangemouth but to see the tankers sail away from sulome voe with all the crude oil exports it seams very unfair To be paying possibly the highest prices in europe

  9. Rev. Stuart Campbell says:

    “Is Scottish oil used to produce either petrol or heating oil?”

    Dunno. Had a look on Google, but a hard thing to find out. Still wouldn’t explain why it cost so much more to get it to Scotland than Northern Ireland.

  10. Rev. Stuart Campbell says:

    “Wales seems to have two”

    But the oil doesn’t come ashore in Wales, so you’ve still got to somehow ship it to Milford Haven before you can refine it.

  11. Norrie says:

    Had a hunt on google as well can’t find any info.

  12. Colin Dunn says:

    North sea oil is classed as Brent Crude, I believe, in which case it is used for petrol.

  13. ianbrotherhood says:

    We pay more for it because we’re too poor, wee, stupid, and fat to stop them.

  14. Norrie says:

    Just spoken to an ‘oil man’ Brent crude is high quality which means it is easier refined and a high proportion goes to kerosene, aviation fuel, petrol and the like. Anything can be made from it, inlucuding heating oil, the important thing is the refinment cost for the more expensive fuels is less. So rip into them gents.

  15. Braco says:

    here now! I’m not too fat.

  16. Martin Henderson says:

    About 40% of crude oil comes out as petrol.  The rest is diesel, fuel oil, kerosene etc.
    Check Google for crude oil fractional distillation for the details. 

  17. Rusty Shackleford says:

    Quite how the market operates in NI is a mystery but I would guess that the competition is greater there because once the oil is onshore, its easier to move around.
    I’m surprised at the large discrepancy, however anecdotally I can tell you that competition for heating oil in NI is quite healthy. While I’d imagine that there’s only a few wholesalers for fuel (I gather Statoil is one of the main ones), there are lots of small to medium sized fuel businesses across NI, so it’s easy to shop around. I’m also guessing (plucked out the air however) the the proportion of heating oil users in NI is quite high – even larger towns only started to have piped gas available in the last few years, and many households still use oil.

  18. Juteman says:

    Re Oil prices in NI.
    There was a certain oil distributor in Armagh that was well known to the security services. He had a farm that straddled the border. Tankers would empty their tanks on one side of the border, and another tanker would fill up a few yards away on the other side of the border. I don’t know if this operation is still on the go.
    Maybe cross border traffic lowers the price, legally or otherwise?

  19. gordoz says:

    Nah its worse than that surely.
    Rev should knlow this ….. arent we the ‘Lost ribe of Israel’ or somehting an ‘acursed nation’ or just a bunch of numpties too daft to notice we are the only place to strike Oil ever to get poorer, because  we were all reared to vote for a ‘monkey in a red jacket’ every time regardless.

  20. Murray McCallum says:

    “Brent crude is high quality which means it is easier refined and a high proportion goes to kerosene, … …”
    Yup Kerosene is the description on my heating oil bills.  Living in SE England I paid 56.43 ppl + 5% VAT on 13Jun’13.  Apologies – I am not trying to stir things up.

  21. gordoz says:

    Nah its worse than that surely.
    Rev should knlow this ….. arent we the ‘Lost tribe of Israel’ or something an ‘acursed nation’ or just a bunch of numpties too daft to notice we are the only place to strike Oil ever to get poorer, because  we were all reared to vote for a ‘monkey in a red jacket’ every time regardless.

  22. Hetty says:

    When I was in Northern England recently I saw a small rural garage with a logo of a lion and the name ‘scot fuel’ or something like that, I can’t remember exactly what the name was but I was surprised to see it.  I have never seen it here, has anyone else seen it?

  23. Atypical_Scot says:

    Interesting link that asserts all refineries end up with some of everything;

  24. James Morton says:

    Pretty straight forward. Labour de-regulated the industry as part of its “Choice” agenda. From that moment on, the end product was treated as a commodity that could be bought & sold on the open market, not just to supplliers but also to speculators. Even if firms didn’t own a single length of pipeline, they can buy a certain volume of gas and sign a contract with you that you agree to buy some of that supply from them. Now these firms speculate on the market as well, and have shareholders, though they have little to no infrastructure, so the only thing they can do, is to extract what they think the market can bear in terms of pricing. Hence the obscene levels of profit compared to the acutal wholesale cost of the resource and the small costs to refiners.

    The energy companies can be likened to Nike – they get someone else to make the product and then they sell it at whatever price they think they can get away with.

    It also has to be said that speculators outside of these firms are also culprits in this insanity, and sadly one of the worst are pension fund managers, not green taxes as some defenders of the market system will try to tell you.

    So if you want to lay the blame somewhere, you can safely lay it at Thatchers feet. She opened the door in the first place, but never forget it was Tony Blair and New Labour that decided to walk through it, rather than close it.

  25. gordoz says:

    O/T Thought this might interest some  (From NNS)
    Silence of the Lambs
    The anti-independence campaign group Better Together has been accused of routinely censoring messages from its online Facebook page if they do not express pro-Union views.
    According to a newly formed action group, whole sections of debates and discussions are being routinely removed when they contain posts which challenge the views of pro-Union activists.
    The action group, calling itself ‘Silenced by Better Together’ (SbBT), has compiled a dossier it says shows the extent of the censorship which it claims has led to people being blocked for posting inoffensive, factual messages that address points raised by others.
    The group has also compiled a similar report into the rival Yes Scotland Facebook page, which it says shows much lower levels of censorship by comparison.
     The group compared the censorship levels for both campaigns for the month of June this year and found Better Together had removed 1648
    SbBT claims to have found evidence of similar practices being employed by Labour’s so called ‘Truth Team’ on its website and on the official Facebook page of the Scottish Conservatives.  According to the group the latter has removed over two thirds of posts from its page since the turn of the year.

  26. CameronB says:


  27. John Dickson says:

    I live in the highlands now and cannot afford heating oil at 375 for a minimum delivery of 500 litres which lasted all of February. Before that I lived in Grangemouth, there is a petrol station on Bo’ness road within 800 metres of the refinery, fuel there is 3p-4p a litre more expensive than all the other petrol stations around except of course the other BP ones

  28. dinnatouch says:

    Hetty says:
    When I was in Northern England recently I saw a small rural garage with a logo of a lion and the name ‘scot fuel’ or something like that, I can’t remember exactly what the name was but I was surprised to see it.  I have never seen it here, has anyone else seen it?

    I’ve seen their tankers on the road a few times, and even a garage selling their petrol once.

  29. Paula Rose says:

    re – what women don’t want….. yet more raping of our one and only world, stop this macho crap and start building a sustainable future, I want self-determination for my country and I don’t need any more of this ridiculous burning of a finite resource – we’re better than that.

  30. les wilson says:

    Rev, can’t help but think if SG use all the info that goes through Wings,in debates, they will wipe the floor with the Unionists across the board.Things they will not have answers to!

  31. CameronB says:

    Aaaaaaargh. The test was because a post of mine has not shown up, yet I am told it has already been posted when I repeat the exercise.
    Ii contained a link to a comment of mine which had been removed by the Guardian, so perhaps it is just being delayed. Can you link to posts that have vanished? That’s three comments removed without notification of their removal for breaking any rules and no record of them in my profile page either.
    Aaaaaaarrgh. It has not been my day for digital media

  32. AnneDon says:

    @ Hetty – this is driving me mad! I’ve seen an old photo or postcard with a petrol pump with that name on it! Don’t know anything about the company, though. Sorry!

  33. Murray McCallum says:

    John Dickenson
    I live in the highlands now and cannot afford heating oil at 375 for a minimum delivery of 500 litres which lasted all of February.
    Holly shit 75ppl and £375 (500 litres) lasts 1 winter month!

  34. twenty14 says:

    Think you may find it’s the fault of Alex Salmond  and the Scottish Government ………. waffle waffle…….drivel drivel……. blah de blah ……..
    Your sincerely
    Alistair Darling

  35. CameronB says:

    Sorry to go on OT. That has been three of my posts removed today, along with a number made by other posters. It looks like the Guardian also wants to suppress free speech, but does not want to clutter their page up with removal notices.
    I don’t think I’ll be giving them my ‘clicks’ again.

  36. wullie says:

    Well as they say. You can fool some of the people some of the time but not all of the people all of the time, Unless of course your Scots, you can take the piss out of them 24 7 365.
    Apologies but sometimes I just wonder.
    Vote yes to end this

  37. gordoz says:

    Im with you Wullie
    For Christ sake doubters; stop dithering just vote YES the alternative is truly awful !

  38. rabb says:

    Northern Ireland are in a common energy market (SEMO) with Eire. That would explain the price in NI.

    In general they pay less for gas & electric. I may be wrong but energy suppliers in NI and Eire have a cap on profits. They’re only allowed to make a few % margin above wholesale. That ensures the consumer isn’t ripped off like we are.

    Working under the assumption that England & Wales are a single market and consumption is higher overall; the wholesale price will be lower thus the retail price will be lower.

    Lower consumption in Scotland will mean higher wholesale price which in turn will be passed on to the customer.

  39. Tim says:

    Could it be the isles increasing the average? Certainly in Orkney, petrol and heating oil costs a fair bit more. Despite lots of it coming ashore at Flotta. 

  40. Archie [not Erchie] says:

    O/T but happy to help
    @ Anne Don – Like you I have seen something like that but its way back in the mists of time, However here is a wee link that may help and surely that webmaster will be able to help, especially if you look at his selection of pumps and signs.

  41. Bob Howie says:

    We just need Scotland to put a blanket price of £1/litre for diesel and petrol after independence, and problem solved as costs for transport will drop.

  42. Holebender says:

    Scottish Fuels. I occasionally buy heating oil from them, but they’re usually quite dear. Anyway, take a look at their logo (top left of page). Is that the lion you saw on the petrol station?

  43. DaveB says:

    It’s actually Dublin based GBOils not UKOils which has been buying up independent distributors. It’s a complex business they operate, but explained to me as this.
    They operate under the brands they’ve bought, & on the surface look all separate, so if you’re phoning around for prices, you think you’re doing the right thing. Wrong. It’s all centralised, they know who you are, know you are phoning around, and will quote accordingly.
    Interesting website here set up for drivers & staff. look for the article ‘The Office of fair trading’
    Unaware they were part of GBOils, I used to have a monthly direct debit with Scottish Fuels, until I discovered on one delivery they’d billed me approx 15p more per litre than they’d quoted. They completely refused to accept they were wrong, so I told them to sling their hook & went & found one of the few remaining indy suppliers.
    I’m told they’re losing customers like snow off a dyke. Good.

  44. Peter says:

    I was with Brogan fuels for years till I found out they were part of GB Oils who tried to change terms and conditions, cue change of supplier to an independent, I like that word, fuel supplier from Turriff!!!

  45. Tearlach says:

    I’m not sure there is that much of a story here in political terms, and I speak as a heavy user of heating oil living in one of the most remote parts of the Scotish mainland. Its mainly economics, with a wee bit of possible – and I say that very carefully – price fixing in place, although this has never been proved.
    Fuel in rural areas is more expensive as its a high volume high turnover business, think supermarket petrol. Low volumes, low turnover makes it expensive. People tend to forget that Scotland is an Urban country with the vast maority of the populace in big towns and cities.
    And therefore on the gas grid. The mains gas grid.
    The rest of us are are in remote areas, dispersed, low volume customers, no access to grid gas, and therefore needing to use Heating oil.
    Rural Wales and rural Northern Ireland are much more densley populated, and they have have less gas grid penetration, so many more heating oil customers, and more competition. Rural England is just full of people.
    There is also a big disconnect between production and refining of oil products. Grangemouth serves central Scotland, with Petrol, Diesal and heating Oil for the North and West coming by Coastal tanker, often from Wales (Milfford Haven) rather than the Forth. In fact the current cheapest player in heating oil here in the North is Simpsons of Wick, importing oil to Wick and Invergordon for distribution by road tanker. And while Wick is pretty close to the Oil fields is a long way from Grangemouth.
    Interestingly a lot of us crofters burn coal as well, and the price of that fuel has fallen in real terms in recent years. I buy stuff from a Thurso based merchant, who imports from China, and the because of low demand from the USA (fracked gas meeting their energy demands) chinese anrathcite has now been at the same price for the past 4 years.
    So I’m not sure its a direct result of the current political set up of the UK. But I’m sure that a Scottish Government would be keen to try and sort out much wider issue of fuel poverty and urban rural price disconnects.

  46. velofello says:

    It’ a well worn path. Buy the raw materials from the colonies at low prices, ship them to the UK, refine the raw materials and sell the value added materials back to the colonies.Tobacco,tea, sugar cane. And the clever bit, you sell them steam trains and the like to create employment here.
    Nowadays it isn’t necessary to import the raw materials they are here – oil and gas in the North Sea ,and next electric power via renewables. As for selling back to the colonies, well there is Trident to charge the operating costs to the colonies, and inflated transmission charges to the colonies for generated power delivered to Mother England. 
    Wakey wakey.

  47. Linda's back says:

    After Project Fear we now have Project Hack from the NO Scotland campaigners but political “hacking” with the compliance of a journalist is given short shift on BBC Scotland TV news whereas STV run a detailed report including an interview with the First Minister.

  48. Paula Rose says:

    I care about my children and their children, if this country had no oil it would make no difference, this is the country I want my children to grow up in – a country that will determine its own future – please explain to me why it is important to base an argument for independence on a finite resource. What women don’t want is yet another version of ‘trickle down economics’.

  49. CameronB says:

    Just a wee update on the Guardian censoring their comments. Topped the hat-trick with another deletion. Again, no notification or record in my profile. People in glass houses…….

    Hope they haven’t also ‘disappear-ed’ the the votes I got. 🙂

  50. M4rkyboy says:

    I take comfort from Holyrood’s ambitious renewable energy target.I think the Green party under Patrick Harvie has had a great influence.

  51. Murray McCallum says:

    Paula Rose
    I agree with what you are saying about renewable energy.
    We also have to ensure we do not repeat the mistakes of fossil fuel consumption and have people in remote Northern regions (where the energy comes from) pay +50% more for their electricity than someone 700 miles south (I am comparing what I pay to Mr. Dickson who lives in the Highlands).  We can’t allow this to continue.

  52. Frazer Allan Whyte says:

    Isn’t the reason for for oil over-pricing and over-taxation obvious? Scotland stands in a classic colonial relationship to England. All the well known features are there – own resources sold back at a premium to the colonizers, resource extraction to the benefit of the colonizing power, restricted decision making power with key areas reserved to the colonizing power, provision of cannon fodder for external wars and internal “police” actions, denigration of language and culture, instilling of sense of inferiority and incapacity in the face of of the “superior” culture of the colonizing power, psycholgical infantilism, colonialist  monopoly of media and  – last but not least – “useful idiot” natives to do much of the dirty work of the colonial masters  – such servile natives being rewarded with beads, trinkets and empty titles. The fact that the whole country hasn’t risen up en masse in disgust at its condition continues to be a source of amazement.

  53. Ghengis says:

    OT Simon Pai lied tonight on ‘Scotland tonight’ when he said the yes campaign have lost the economic argument.
    Incredible such a bare faced lie!
    I didn’t see if he was challenged or not. I wasn’t the one flicking through the channels.

  54. Bill C says:

    @Frazer Allan Whyte – A very succinct summary of our situation.

  55. Onwards says:

    Paula, why ignore what is a hugely profitable natural resource?
    Around half the oil is left, so it seems only sensible to have a mix of energy policies – with both green energy and fossil fuels.

    The revenues from oil and gas can fund schools, roads and hospitals.
    In Norway’s case, a massive pension fund for their children..

    It beats me why the SNP doesn’t make some sort of National Energy company a campaign point. With the potential to eventually grow into a future Statoil.
    They need to highlight more opportunities that a YES vote will bring.

    We might not be able to afford an oil fund right away, but future profits from an state owned energy company could be used to this end, as well as maintaining thousands of jobs here.

  56. Paula Rose says:

    Boys please explain – what is the economic argument? I want to live in a country fit for people, my friends come from all over the world, they make this country.

  57. pmcrek says:

    I think I know the answer to this one, Scotland on average is colder than Wales, England and Northern Ireland by about 1.5-2 degrees in any given month. So in more cases heating is a necessity rather than a luxury and you can charge what you like for it. Also energy in this country is costed by a small monopoly of companies.

  58. Ken Johnston says:

    No, Ghengis. Simon Pia was not challenged.
    Just like, my pet gripe, no it’s anger. Why are the lies about Scotland would have been unable to support the banks are NEVER challenged. When in fact we would only have had to support that section of any bank only for the business which it was doing In Scotland.

  59. Ghengis says:

    @ Paula
    The economic argument is that Scotland is a wealthy country which subsidises the rest of the UK. As part of the UK were are one of the most unequal countries in the world. We can do a helluva lot better.

    “Scotland is a country rich in resources, and undoubtedly has what it takes to be a more prosperous and fairer nation.”

    Where Does Scotland’s Wealth Go?:

  60. Ghengis says:

    Thanks Ken
    I feared he would get away with it. Makes my blood boil. Lies are left unchallenged on our worthless media.

  61. Rev. Stuart Campbell says:

    “I think I know the answer to this one, Scotland on average is colder than Wales, England and Northern Ireland by about 1.5-2 degrees in any given month.”

    That doesn’t explain the variation in the discrepancy, though.

  62. G H Graham says:

    The single biggest reason for the high base cost of oil based fuels in Scotland is of course HM Revenue & Customs in Whitehall in London.
    When we get rid of that inefficient department after independence, we might just be able to lobby for a completely different & more equitable tax regime.

  63. pmcrek says:

    “That doesn’t explain the variation in the discrepancy, though.”
    What I mean by that is, its easier to price fix if people need a good more and Wales/England and Northern Ireland experience similar temperatures.

  64. Shinty says:

    @ Peter, Brogan’s only sold out to GB Oils about 3 years ago, in fact they have started out again (which they are permitted to do after the 3 year period)
    My understanding of Grangemouth is it’s only BP who have the refinery, the other companies Ineos, Ross Chemicals and others get their fuel shipped in.  Distributers get their forecast on fuel prices from these various companies and buy from whoever is cheapest on the day
    Your distributor then whacks on what he likes ie  take 4 houses in a street, all getting 1000lt Kero delivered on the same day (from the same supplier) they will be charged 4 different prices – honest, that’s how they work.

    So come winter folks shop around and get quotes, don’t just use your normal supplier – make the competition work for you.

    This still doesn’t answer the question of why we pay so much more in Scotland, sorry.

  65. john king says:

    BBC  up their tricks again Catriona Shearer said
    “The oil industry and gas industry leaders said the decline in north sea oil output is picking up speed because of technical difficulties and the unplanned shutdown of facilities, they said the knock on effect is a fourfold rise in the cost of extraction per barrel over the last ten years,
    they say this is a worrying trend which could affect the lifespan of the industry making some fields uneconomic if the price of oil goes down”
    how the hell could the unplanned shut down of facilities NOW have had a knock on effect over the last ten years? 
    and how is it a surprise to them that platforms and infrastructure possibly approaching the end of their  productive lives needs to be taken out of use (earlier?) than planned?
    who knew? a few broken drills and out of date living accommodation on a rig and
    that’s it boys pack up and go home the cost of a new rig is not worth the trillion pounds+ of oil left !

  66. john king says:

    the above was apparently a quote from “trade body” oil and gas UK

  67. ianbrotherhood says:

    GMS have just said they’ll be hearing from ‘Oil & Gas UK’ at 7.30.

  68. bunter says:

    Listened to GMS this morning re UK oil and gas report and BBC said among other things that record investment going into North Sea and the oil expected to last decades while noting that due to difficulties extraction had declined 14% recently. However as mentioned above, Shearer on BBC one mentioned nothing about record investment, nothing about the oil lasting decades, but only negative, negative and finished off that it was a worry that if the price of oil drops, wells may be unviable. Im not saying that the BBC are trying to confuse deliberately, but you would never think that the two stories could come from the same report…..

  69. mealer says:

    Can anyone provide a list of all the Scottish-based oil distribution companies owned by GB Oils/Scottish Oils ?

  70. john king says:
    really not seeing anything of serious concern apart from the usual concerns any industry would put up in an attempt to give their industry some leverage with government to influence them into reducing their tax levels, no ones going to make their job sound easy and encourage a government to take more tax are they?

  71. ianbrotherhood says:

    @john king-
    They’ve gone through a positive, upbeat Press Release and plucked the only negative statement available. 
    The Oil &Gas UK Release ends with details of two public meetings which can be attended for free – one in Aberdeen, t’other in London. Could we get any WoS readers to attend and report back?
    Or will we just rely on the good old MSM to fill us in?

  72. Fairliered says:

    Linda’s back (10:08)
    Could STV be more interested in the hacking story because they know they are not involved in hacking, whereas the BBC…….

  73. Shinty says:

    Stopped watching BBC No Scotland some time ago and no longer contribute to the state broadcaster.

  74. Tony Little says:

    @john & Ian
    In addition I read (NNS) that new extraction techniques will make previously marginal oilfields far ore profitable, and therefore worth extracting for more years that originally planned or expected.  So the upper end of value for the total O&G in the North sea will be far higher than at first estimated.
    I know who I tend to believe, the Oil industry, Oil industry experts, and Oil industry posters on this site rather than the politically biased MSM/BBC or the No-Better politicos. 

  75. bunter says:

    Just heard the oil and gas guy on GMS and he just about shot down every early morning doom and gloom scare from the state broadcaster. His facts bore no relation to the BBCs negative spin this morning. It would be good if we could capture his interview and compare with the BBCs bulletins earlier as im sure you wont find a better example of a Brit Nat organisation blatantly twisting and spinning the facts.

  76. john king says:

    “Could STV be more interested in the hacking story because they know they are not involved in hacking, whereas the BBC…….”
      you may have something there

  77. ianbrotherhood says:

    It’s become routine now, hasn’t it? 
    The Oil & Gas UK spokesman couldn’t have been more cheery and emphatic – ‘this is good news’.
    Anyone who bothers comparing/contrasting the various scripts produced in relation to this story can only reach one conclusion, and it ain’t pretty. We already know it, and so do the perpetrators.
    It’s as brazen as it is shameless, and way past time that these PR-people got the gloves off – ‘Why are you misrepresenting us like this?’

  78. Another London Dividend says:

    BBC Scotland online still headlines story as Oil and Gas fears

  79. bunter says:

    @ Ianbrotherhood.
    Its clear that the BBC and their media pals see that their only hope is to stop the Scots from connecting with the facts and as such we will just have to find a way round it. My big fear is when the white paper is published, it will get the same treatment as the last GERS report when en masse, the whole of the Scottish media ran with a spoiler instead.

  80. rabb says:

    I posted the reason for the divergence in price last night folks.
    NI is cheapest because it’s part of SEMO (Irish common energy market). Profits are capped on domestic energy from all suppliers hence the lower price.
    England & Wales don’t diverge much as they’re also in the same market (Most heating oil purchased in Wales will come from English suppliers along the Welsh border)
    NI = Cheapest because of SEMO rules on domestic energy.

    E/W = Cheaper because of purchasing power (wholesale cheaper due to bulk buying)

    SCOT = More expensive because of an open market with less bulk buying power than England.
    That’s simply why we are shafted in Scotland.
    NI has a profit cap, England has more buying power so Scotland (despite having the resource) is left paying the price.
    Another union dividend 🙂

  81. Willie Zwigerland says:

    Tearlach – that’s a very informative comment, thanks for sharing.

  82. MajorBloodnok says:

    Yes, I heard that at 0730 this morning on GMS – doom-laden intro from the BBC about the frightening and oh dear worrying drop in oil production over the last few years (such a setback for Alex Salmond!) and then came the most immediate and positive debunking of the negativity from the O&G guy they interviewed. 
    I was in the car and laughed out loud.  The interviewer (Shearer?) was left scrabbling around trying to find the negative angles but obviously the interview had not gone according to script AT ALL.
    Basicallly he said that the drop in production in the last two years was due to the UK tax regime at that time, which has now been resolved.  Not the ageing equipment, lack of confidence spin that we’re getting from the MSM.
    He made absolutely clear that the level of investment right now was the highest that it had ever been, compared even to right at the very start (his emphasis).  He also noted the long term nature of the investment and that there was clear confidence in the continuing growth and profitability of the sector.
    I didn’t hear the GMS 0830 bulletin but I expect his positivity was edited out….

  83. ianbrotherhood says:

    I listened to the 7.35-ish interview, kept GMS on while getting the weans ready for school etc, and neither hide nor hair of O&G man resurfaced (that I detected anyway). It’s away down the ‘Aborted Calmanballs’ memory-tube.
    Oh dear, ‘ow sad, never mind – another one will be along shortly…

  84. Juteman says:

    I heard that interview on the drive to work.
    Talk about the intro bearing no relation to the actual story!
    Shocking attempt at spin by the BBC.

  85. Morag says:

    Last night at our SNP branch meeting a new member turned up.  A lovely lady who said she wasn’t yet a convinced Yes, but she’d been looking at all the headlines in the papers and was shocked by what she realised was pure propaganda.  She concluded that the only way to find out the Yes side of the story was to join the SNP!
    This somewhat parallels stories others have been telling, but it’s the first time I’ve encountered it personally.  It’s very encouraging that a number of people can see through it like that, but I just wonder how widespread such insight actually is.

  86. gordoz says:

    Guys – See back page of Herald today (read it off someone elses copy on train honest) Stopped buying UK papers dressed as Scottish last month.
    £22bn investment into ‘drilling new wells’ kind of shoots down another non story.
    Surely one paper/tabloid has got to see there is ‘real- mileage’ & revenue in a dying market for a counter view to UK policy driven media. At least some form of non biassed reporting ?

  87. Juteman says:

    They aren’t newspapers though. They are part of the British state propoganda campaign. They don’t need to make a profit.

  88. MajorBloodnok says:

    @Another London Dividend
    I note though that the BBC article has toned down the negativity (at 1114 today) and dropped the disparaging quote from Greatrex, although the easy to interpret subheadings “Premature Decomissioning“, “Worrying Decline” and “Volatile Commodity” are still there.  Bloody BBC (BBC Alba excepted).

  89. Chic McGregor says:

    Good article on NNS
    BTW, Holebender, there have been articles on NNS recently about extended reach drilling and on a new fast resonance assisted drilling, any thoughts on how genuine/significant those developments are?

  90. velofello says:

    Paula: The economic argument is better expressed as the economic case. Would Scotland prosper economically if independent? Of course it would.
    Scotland is a net exporter of many goods and services, some of which cannot be manufactured – oil and gas, wind and tidal power for power generation,extensive fishing grounds.
    It isn’t necessary to have a degree in politics and history to view the future in these islands as an United Kingdom,just look at what is presently happening in England. Education,social services and the NHS are seriously at risk should Scotland decide against independence.
    Trickle down economics is a smartly phrased deceit. The rich are rich because they like money especially well. There is no prospect of them generously passing it down the social ladder.Indeed the higher rate of tax was lowered wasn’t it?
    i’m campaigning for a Yes vote to safeguard my grandchildren’s future.

  91. Holebender says:

    Chic, we are pushing the boundaries all the time and there is no doubt it is much easier now to drill extended reach than it ever was before. Having said that, some of what are still the longest horizontal reach wells in the world (at Wytch Farm on the south coast of England) were drilled with decidedly old technology. If anyone proposed drilling those wells today with the techniques which were actually used to drill them they’d be laughed out of the building.
    I have read recently of a new tool being developed in Aberdeen, called RED, which does sound interesting. However, I want to know how its operation will interact with other downhole tools and what effect it will have on bit life before I’m willing to express an opinion on it.

  92. Chic McGregor says:

    Yes RED, going by the NNS article is the resonance enhanced drilling technique developed by academics in Aberdeen.  Apparently it is a bit like applying pneumatic drill type reverberations to the drill and it is claimed it will drill through rock 10 times faster and save wear and tear on the bit at the same time.  Was wondering if that technique would still be compatible with changes of drill direction, I guess it could be.
    Also, if extended drilling takes off, I can understand the advantages of on shore rather than rigs and their associated capital, risk management and support costs, but what would it do to the East coast (and if rumours are true about gas finds off Ayrshire and exploration reveals more oil finds further North, the West coast as well).  Or, are these well heads underground and therefore not as devastating aesthetically?

  93. Vambomarbeleye says:

    Right now there are a number of major oil companys building new rigs for the North Sea and no they are not scrapping any of their fleet. It’s a shame that they are getting built in Singapore and not Scotland.

  94. Holebender says:

    Chic, At the moment we can step out about 10km horizontally from the wellhead. Even after major changes in technology and techniques I cannot see that ever extending beyond, say, 15 km. Let’s go crazy and say 20km! How many offshore oilfields are within 20 km of the coast? Extended Reach allows you to have fewer offshore platforms. For example, the Brent Field has four platforms, each draining different parts of the field. If Brent was discovered today Shell would probably plan to develop it with three, or possibly two, platforms, saving themselves a few million.
    There are two aspects of RED which I’d need to know a lot more about before I could pass any sort of judgement on its suitability for directional work. (1) How much vibration and/or shocks will it induce in the rest of the drill string, i.e. will it be a tool killer? (2) Where will it be placed in the drill string? Rotary Steerable Systems (RSS) which is the generic term for the directional drilling tools you need for serious ERD (Extended Reach Drilling) work usually need to have the drill bit directly attached to the bottom end. They will lose effectiveness if there is anything (like RED) placed between the two as they generally rely on some form of leverage to actually deflect the bit from its natural path while drilling. The greater the distance from the business end of a lever to the fulcrum, the less effective the lever. If this RED needs to be directly coupled to the bit and it is any length at all it will probably cause directional drillers like me a lot of trouble.

  95. Chic McGregor says:

    Thanks H
    FYI (I seem to remember you saying you no longer visit NNS) here are the NNS articles I read.

    The RED claims are for LESS drill bit wear but whether that is in terms of distance drilled or time I’m not sure.

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