So, oil will boom in UK and go bust under indy... right?

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So, oil will boom in UK and go bust under indy... right?

Post  TinyHandsOfConcrete on Mon Apr 01, 2013 9:03 pm

I get on fine with politicians. Almost without exception, no matter what side they come from, they honestly want to do their best for people and for the country. But I try not to like them because the time may come when I may have to knife them.

On the other hand, I really, really like Professor Andrew Goudie. He is one of the nicest chaps you could ever meet, as well as one of the brainiest.
Some time ago I wrote about GERS — that’s our annual national accounts or Government Expenditure and Revenue in Scotland. I pointed out that when Labour and the Tories were in power, GERS had a certain flavour about it and, when the SNP took over, the mood changed a bit. Well, Prof Goudie was the Government economist who drew up both versions but, now that he has moved on to greener pastures, he feels released to speak his mind. Although everybody is shouting about transferring powers to Edinburgh he says: “There has generally been far less emphasis placed on accurately identifying the potential value of those powers.”

And when it comes to GERS and what the numbers tell us about independence, Prof Goudie’s answer is clear. They tell us nothing. Not a blind thing.
Andrew Goudie, is standing by his figures which show that Scotland is considerably less bust than the UK with a deficit of five per cent, compared to the UK’s 7.9 per cent. But that’s a picture of how things are today, not how they might be at some time in the future — either inside the UK or under independence.

And Prof Goudie has been absolutely scathing about the politicians he used to work for. He says arguments about independence and extra devolution have been based on “cavalier assertions with little or no foundation”. Which brings us to last week’s visit to Scotland by UK Business Secretary Vince Cable. He was part of a delegation which came to Aberdeen to tell international oil barons that the North Sea can be a money-making bonanza for them — so long as it stays British, of course.

According to the UK Government Oil and Gas Strategy published during the visit, up to 24billion barrels of oil remain in the North Sea and the supply will continue “well beyond” 2055. That’s even more than Alistair Darling predicted when he was Trade and Industry Secretary in 2007. He said: “There are potentially more than 20billion barrels of oil and gas still available to be produced, which is good news for industry, our economy and energy supply. The oil and gas sector is one of the UK’s most important industries.” But that was before Mr Darling took charge of the anti-independence Better Together campaign and realised the North Sea is more or less a squeezed lemon.

Just last October he told the House of Lords’ Economic Affairs Committee: “The thing about oil that worries me is no one knows when it is going to run out.”

And last month, Better Together warned: “Oil is becoming increasingly more expensive to extract from the North Sea as it begins to run out.”
But that can’t be right. Well, not according to Mr Cable, who said: “The message we have as we launch this oil and gas strategy in Aberdeen is that there is a very positive future for the industry. This is an expanding industry. We can either help create more jobs and opportunities across the UK if we get this right. Or see work going overseas if not.”

Unlike Alistair Darling and Better Together, Mr Cable seems pretty certain the oil sector is not about to collapse. He said: “I think that, in the past, there’s been a belief that it was declining, and it isn’t declining. It’s got great prospects.”

Maybe he means that everything would be wonderful for the oil industry provided Scotland stays in the UK, but independence would make it run out.
That must be it. After all, Energy and Climate Change Secretary Ed Davey said that “oil and gas will remain an integral part of the UK energy mix for decades to come”.

In the same Press release last week, Malcolm Webb, Oil & Gas UK’s chief executive, said: “Record investment is forecast this year to search for and produce UK oil and gas reserves. This will be followed by an upturn in production from 2014.”

Why would the Government — your Government — allow a Press release like that to go out from the Department of Business Innovation and Skills if they didn’t think it was true?

Why would the Government lie? It’s not as if we’re talking about weapons of mass destruction here.

But Mr Darling says it’s all rubbish. Last week he said “that there is no evidence” for an oil boom, adding: “Betting a country’s economic future on such a volatile and declining resource just isn’t credible. It is time that the nationalists were straight on this.”

Which, again, is different from Mr Cable. He said there might be a fight with Shetland over oil rights but added: “The simple fact of the matter is that if Scotland did opt to become independent they would have a major resource.”

So no evidence of an oil boom, but the industry says an upturn in production. Oil running out, but the Business Secretary says it’s a major resource and the industry is not declining.

Oh dear, it’s all so confusing. So many people making those “cavalier assertions” — first on one side and then on the other. I just don’t know who to believe.

If only Andrew Goudie was here!

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Re: So, oil will boom in UK and go bust under indy... right?

Post  therrawbuzzin on Mon Apr 01, 2013 9:49 pm

That's the North Sea, not the coastal Atlantic too.

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