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Rush for new oil gets old response



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Published Date: 11 June 2008
BOOM sparks new North Sea goldrush. You'd think a headline like that in a serious English broadsheet newspaper would be enough to make even the most pro-Union Scot or anti-SNP party political activist pause for thought. But you'd be wrong.
The hardcore opponents of anything that might give political nationalism a leg-up have responded as they've done for the three decades the oil's been flowing.

Whether old Tories, New Labour or futile federalists, the common comment boils down to
an all-season "Bah humbug".

Regardless of the benefits Scottish ownership of North Sea oil might represent for Scots, including those in the various interest groups supported by the different parties, the comments are predictably Pavlovian.

Unionists and others have refined the old put-down about the estimated oil tax revenue that would go to a Scottish Treasury being short of the amount needed to run Scotland. With the price of oil rising to $139 a barrel, the cheerleaders for Westminster now preach their false gospel on the impossibility of basing an economy on one main resource – oil.

Does their willful refusal to acknowledge the opportunities afforded by oil revenues directed to a Holyrood-based finance minister indicate an ignorance of the facts, or is it just petty politicking?

Norway's wealth comes from one big tax resource. Sure, by staying out of the EU, Norway's fishing industry hasn't had to contract as much as ours.

But the engine of the economy is oil and the cash in the bank for future investment, in infrastructure or skills training, comes from the taxes paid by the same oil companies with contracts on the Scottish side of the Norwegian trench.

Kuwait produces roughly the same volume of oil as Scotland. How wide a tax base does this very wealthy country have, apart from the state oil company?

As these two very different countries demonstrate, provided enough tax is paid to a government, and provided it's used sensibly, with a proportion retained for investment in other sectors of the economy when needed, it's quite feasible to have one, main, lucrative tax source.

So aren't we lucky to have other sources of government revenue from taxation – such as whisky for example? The UK's single biggest dollar earner is whisky, and the biggest single tax contribution to the Westminster treasury is from the oil industry.

Cue the Unionist response, filed under "selfish". For 30 years, whenever its arguments falter under the facts, the "Leave-it-to-London" brigade plays its trump card: "After all the benefits the Union has given Scotland, it would be selfish to break up Britain and take the oil money."

In the 1970s, this deceitful appeal dissuaded Scots from raising their sights and calling their own economic shots. Ever since, the Union, and Westminster control of the oil, has kept Scotland's growth rates below the UK average.

As a measure of the Union's success in improving life for Scots, a report on child poverty in the 1970s found one-in-ten Scots babies were "born to fail". Thirty years on, the figure is one-in-four.

Scraping the bottom of the barrel, Unionist politicians trundle out the old chestnut at this point: Scots get more out of being part of big Britain – UN Security Council permanent member, big wheel in the EU and member of G8 – than small, independent countries get out of being masters in their own small house.

The pride in that sort of status is long gone if its price is lower living standards, poorer health care, education and pensions than those in Europe's small states.

A political union isn't necessary for cross-border co-operation required on environmental matters, or borders security or transport by adjoining but different countries – as shown by Norway and Sweden, Portugal and Spain or the Republic of Ireland and Northern Ireland.

Obama's next move
Barak Obama looks to be made of the right stuff for an American president who'll have to persuade Americans to guzzle less gas. All he has to do now is to resist having Billary Clinton on the ticket, and to re-visit the speech he made to the Jewish pressure group, in the course of which he appeared to ride roughshod over the hopes of Palestinians for a just end to their exile from their rightful homelands.

Portugal's my pick
My mind is made up – I'm supporting Portugal. The wisdom of my choice was confirmed on Saturday night when Luiz Felipe Scolari's all-stars showed a useful-looking Turkish team how the beautiful game is played.

I'll own up to a certain level of bias based on the similarities of playing style I fancied I detected amongst players who'd started their careers in either Lisbon or Leith.

The Turkish tussle was good, and tonight's Czech Republic match looks promising. The mother of all grudge matches goes on unseen though ... Sir Alex Ferguson versus Cristiano Ronaldo.





The full article contains 825 words and appears in Edinburgh Evening News newspaper.
Page 1 of 1

  • Last Updated: 11 June 2008 9:45 AM
  • Source: Edinburgh Evening News
  • Location: Edinburgh
  • Related Topics: Margo MacDonald
 
1

,

11/06/2008 11:14:25
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2

Douglas Eckhart,

Edinburgh 11/06/2008 11:23:46
As the BBC recently revealed, almost half the oil reserves are still out there and that they will be producing oil for at least the next 40 years with rising oil prices more than off-setting any drop in production (witness the growing need from China nad India) - and that's just with current fields and technology.

What is so astonishing and depressing is that although all the English based newspapers made this headline news, it was hardly mentioned by the Scottish press, and indeed continues to be an unmentioned story, apart from your piece today.

The news that salmond has initiated an oil fund inquiry got a pathetic 4 lines in The Scotsman on Monday, whle Donald Trump gets pages.

It must be frustrating for the unionist press that the BBC have promoted this story so succesfully.

I would also like to comment on the unionist argument that its silly to base your economy on one commodity:

Actually, this is a false argument as the oil industry in an independent scotland would create a knock-on effect that would help inject momentum into other industries and encourage diversification. Far down the line, whne oil does eventially go, Scotland will have a healthy diversified economy to work without it.

If you think this is fantasy think again - that's exactly what the UK did in the 70s. Before the oil was discovered, the UK economy was virtually bankrupt. Oil saved it and helepd kickstart a recovery and this then led to a diverse economy that we have today. The same would happen in Scotland.

We need to act now and kickstart the scottish economy before it's too late.
3

PaulW,

Borders 11/06/2008 11:23:58
Well said, Margo. As usual you are spot on and a class act.

Norway has around £190 billion in its oil fund and the financial impact of oil will, in effect, last forever, so long as that fund is well managed. Given that in today's money something like £230 billion has been extracted from the North Sea and porbably as much oil (at an ever increasing value per barrel) left to extract. You would have to be an egit not to see that Scotland would be in a very robust financial position if independent and what's more we have an indiginous financial services sector with a heck of a lot of expertise that would be very well placed to invest the Oil fund to good effect.

4

Boggle fey the Bog,

11/06/2008 11:33:11
Aye the shame of the Unionista Press, is that it takes an 'Independent' columnist to actually get this story into print, and even then only in a local evening news (no pun intended) paper, not the 'mainstream',flagship Daily title of the Johnston Press!

Good on ye Margo, you've got it totally right!!
5

Gusto,

11/06/2008 11:50:44
Well bless my soul! - a piece of real journalism! Bless Margo too! Even a touch of humour too!
Norway, for all their oil wealth, are the highest users of electricity per head in europe, and it is NOT generated by oil, but by hydro power - which Scotland could do more of.. after independence of course...
6

kimba,

11/06/2008 11:58:59
AHH, Margo MacDonald, another biased article!
7

R_K_C,

11/06/2008 12:31:03
Margo MacDonald citation of Kuwait as an illustration of how Scotland could benefit is a classic example of the deluded thinking that pervades the Nationalist/"It's our oil" brigade's thinking.

Oil wealth has turned Kuwait into a society where the locals do not want to work and expect the state to pay for everything (including bank loans that they have run up with no intention of repaying!). The Kuwaitis have been complaining recently because the Govermnment ONLY give them 50% of the money they need to build a family home, can you believe it they actually have to take out a mortgage for the remaining 50%, poor darlings.

The country (in common with all the other Gulf Arab states) is straining under vast inflationary pressures brought on by it's oil wealth, it has had to import a huge immigrant labour force to do all the work (in the UAE locals only make up 15% of the population, the rest are "temporary guest workers".

The statement that Kuwait produces roughly the same amount of oil as Scotland seems compelling but is actually a red herring. Kuwait and the other Gulf States have some of the lowest oil production costs in the world, the North Sea has some of the highest, meaning sigificantly lower oil company profits to tax. Of course, the oil price is booming at the moment, but so are the input costs, meanwhile the biggest North Sea fields are mature and declining, and will only become more expensive in the coming years to extract commercial quantities of oil from.
8

Arfur,

11/06/2008 12:39:46
AHH, Mount Kimba, another waste of space.
9

ThomasP,

11/06/2008 12:50:05
The United Kingdom - 0

Scottish Nationalists - 1

Bring on the elections.
10

brettgallacher,

edinburgh 11/06/2008 13:00:33
if the oil ran out tommorrow , as sure night follows day the english would dump us like a skunk on speed, we need our independence now and use the resourses wwe have to set up our future our childrens future and beyond, in the seventys i went on a trip with the school to torridon which at that time was going to provide our energy through natural means, ie water, as soon as the english started stealing our oil it was dumped and we became oil driven , nuclear driven energy country now clobal warming etc is putting paid to that the english still think we should just turn into a waste land when the oil runs out
11

Tom R,

11/06/2008 13:27:47
Virtually everyone in England believes that Scotland is being heavily subsidised by England, whereas the reverse is the case (with the value of the oil it simply must be the case that Scotland is more than paying its way).

Given this belief in England, anyone who thinks that people in England will be grateful if the Scots remain in the union is going to visit a very sad future on their children/ grandchildren when the oil really soues run out-pehaps 50 years down the road.

Human nature being what it is, do not expect our children or grandchildren to be given any help from England then, because England will never even have recognised the sacrifice made by Scots, never mind appreciating it.

We must do what is best for Scotland's future, and declare independence as soon as possible to protect the future of our loved ones .
12

Busymale,

11/06/2008 13:35:25
#6 Kimba, the slayer of the Scots!

Is that all you can say to a well balanced argument? Something that doesn't suit your nasty anti-scottish rants?

All we ever get from you is how Scots live off the English when its evident to all its the reverse.

I've never heard a response from the unionists as to why Jim Callaghans government felt the need to stifle a report of Scotlands true wealth and marked it "too politically sensitive and dangerous for publication". We were conned then and we're being conned now. Shame on all those unionists who put self interest before that of their nation.
13

john z,

edinburgh 11/06/2008 13:36:30
Thank you Margo, for highlighting what the so-called journalists of Scotland won't.

I just cannot understand how anyone of sane mind can even suggest Scotland would be poorer without England. Wake up folks, and stop believing the lies of English owned media.

Once the oil goes, England will dump Scotland pretty damm swiftly

In relation to this, Scotland is also rich in another natural resource which can be used once the oil runs out in 40-50 years, and that is wind. Money from oil now, could easily make Scotland nearly self sufficient in wind power, as Scotland recieves over 40% of European wind (sadly about 90% of its rain!)
14

Busymale,

11/06/2008 13:43:23
#7

In answer to your stance "meanwhile the biggest North Sea fields are mature and declining, and will only become more expensive in the coming years to extract commercial quantities of oil from," haven't you been listening my friend? The most senior oil geologists have been telling us for years that technology has moved on and yes, while more difficult and more costly to access it is still profitable, and when it comes to volume, the same again!

Why don't Unionists listen? Is "queen and country" so overpowering for you that you'd let down future generations all for a bit of bull and pomposity? Do you think that lousy dysfunctional family give a hoot about you? Oh, alright, that makes it all okay then!
15

McMadman,

Saor Alba 11/06/2008 13:46:27
# 6 kimba,11/06/2008 11:58:59

"AHH, Margo MacDonald, another biased article!"

Biased meaning anything you don't agree with I take it. Still waiting for you to tell me, as you often assert, the source for your claims that england gets 90% of it's oil from Norway, and also for you to tell me whether, if this is true, that you agree the North sea oil revenues should all go to Holyrood.

Doubt I'll get any answer let a sane one supported by some facts, rather than your usual nonsensical unsupported assertions. Be glad to have to apologise if you actually did though.
16

R_K_C,

11/06/2008 13:51:08
Perhaps the reason that so few Scottish papers have commented on the stories is that, if you actually bother to read the story (instead of just looking at the attention-grabbing headline) they aren't really saying anything particularly new or interesting. New oil fields are being discovered in the North Sea, but these are mostly small fields that have nothing like the impact of the big discoveries in the 60's and 70's (20m barrels average compared to 500m in the 70's if you check the Press Association article).

Scotland can go producing oil for maybe 40 more years, but it will be in ever decreasing quantities and at ever increasing cost (two factors combined mean a dramatic drop in tax revenue).

North Sea oil production peaked in 1999 and is in significant decline. That is not going to change, even if the Nationalists would like to think otherwise.
17

ThomasP,

11/06/2008 13:53:42
16 R_K_C.

True the oil is in decline.

but has Britain prepared for the future? What has Scotland got as an alternative?

The Nationalists are not idiots. They know the oil will be gone and the reserves are smaller but we have got nothing to fall back on.

They are wanting us to take control so we can benefit.
18

R_K_C,

11/06/2008 14:15:35
Perhaps #14 and #17 could confer and get back to the rest of us on what Nationalists actually believe about North Sea oil - is technology going to rescue production or do you accept the reality, i.e. it is in signficant decline?

Just to save you the bother, production in the UK sector peaked at about 2.7mb/day in 1999 and is currently down to about 1.5mb/day (#14 please note that there have been continual advances in oil technology throughout this time, it's not something that just magically happened in the last year or so, yet despite this production continues to decline). Technological advances will slow the rate of decline slightly, they won't reverse the trend.
19

Douglas Eckhart,

Edinburgh 11/06/2008 14:33:09
RKC

You are unfortunately arguing with yourself.

Everybody knows that oil production is declining, but it is also the case the the price is rising and has been since the 1970s, more than off-setting the drop in production. This has always been the trend and will not change, especially with the rise in demand from India and China.

Thisi s why the north sea oil companies are investing in so many long term projects in the North Sea.

20

roughrider,

Glasgow 11/06/2008 14:37:33
Westmonster wants every last drop.
Why cant we have an oil fund like Alberta?
Because the westmonster unionist thieves want it for themselves.The only country in the world to discover oil and get poorer is Scotland.
The rest of the world must be laughing at the way we let these greedy bustards treat us.
Time to end this dis united kingdom.
It,s time.
21

R_K_C,

11/06/2008 14:53:09
#19 The oil price has not risen consistently since the 1970's - in the late 90's there was protracted price slump, and at one stage the price was around $10/barrel. At that point, even the wealthy Arab Gulf States began to realise that oil-based economies had some serious drawbacks.

Depending on who you listen to, North Sea production could drop to a third of it's current level in the next ten years, so you need a threefold increase in price (plus inflation adjustment) to maintain gross revenue. However, costs are likely to continue to rise dramatically as well, impacting the profit available for government taxation.

Countries such as India and China will contribute to an increase in demand, but growth of their economies is already showing signs of being affected by high oil prices.

I don't have a crystal ball but I would not bet on oil prices continuing to rise at anything like the rate they are. In the short term they are causing worldwide economic growth to stumble, in the medium to long term companies, individuals and goverments will come up with ways to reduce demand. In the US the major car manufacturers are already closing several plants that produce SUVs as consumers (finally) abandon these vehichles in favour of more economical cars. Expect more of the same around the world.
22

Tom R,

11/06/2008 15:04:19
R_K_C Various comments

If the oil is of so little consequence as you suggest, why doesn't Westminster just say to the Scots that it is of such trivial value that they really wouldn't miss it, it's not worth arguing about, and so the Scots can have it all?

I won't be holding my breath waiting for that to happpen :-)

I have to say that you are being incredibly naive if you really do believe that the value of the remaining oil in Scottish waters would not make a major difference to Scotland's prospects if it were allocated-where it belongs-to the Scottish Government.
23

R_K_C,

11/06/2008 15:24:38
#22 Nowhere did I say that the oil is of little consequence at this present time. However, it is in significant decline and will not sustain the Scottish economy for the 30 or 40 years that the Nationalist movement would like to pretend it will.

Allocation of oil revenues in the current UK framework would almost certainly result in a equivalent reduction in the allocation of general taxation revenue to Scotland, so we'd be no better off. In a independence scenario? Well, first of all show me an economic plan that isn't centred around unrealistic assumptions about the future tax revenues from North Sea oil and maybe I'll be interested.
24

,

11/06/2008 15:29:00
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R_K_C,

11/06/2008 15:29:12
#23 I could say the same thing about the Nationalists, as far back as I can remember they've been banging on about North Sea oil being the bedrock of the future Scottish economy. And "England" stealing the oil. And somehow (as Margo still does in this article) blaming the Union for Scotland's social problems. Scotland's social problems are the fault of the Scottish people, no-one else.
26

Douglas Eckhart,

Edinburgh 11/06/2008 15:29:55
RKC,

The point still remains however that despite periodic slumps and highs, the overall trend shows that oil is increasinlgy more valuable from the 1970s to now, more than offsetting drops in production. It is highly unlikely that this trend will change. Of course the current high price will drop, but the overall trend will be a gradual increase over time, as it always has been.

I would also like to put an earlier poster's point to you that if oil is so insignificant and if the UK has to channel so many 'subsidies' to keep Scotland going, then what is the problem with asigning all the Scottish ol revinue to Scotland directly now? Then everyone can see what enormous drain we actually are and how much 'additional money' they have to inject on top of oil to subsidiese Scotland - no, thought not.

If the UK is so heavily subsidising Scotland, then the oil would be of no consequence - the absolute resistance to asign the oil dirctly to Holyrood is a glaring admission of guilt.


27

,

11/06/2008 15:37:06
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,

11/06/2008 15:40:35
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Alan B,

11/06/2008 16:44:56
#R_K_C

"Scotland's social problems are the fault of the Scottish people, no-one else."

Scotlands social problems are linked substantially to its economic problems. Both problems are directly related by the political governance of the the country.

You are correct in the scotland voting for the union and not independence should blame themselves and not england.

If scotland did not want 17yrs of thatcherism they should have voted independence.

If scotland wanted to be richer with more and better jobs and part of the so called arc of prosperity of the other small european countries scotland should have voted for independence.

If scotland had wanted to use its oil wealth to have a rich country and not mass unemployment during the 80s and continued low growth ever since, scotland should have voted independence.

The only thing u can blame the uk government for it the lies. ie Mcrone report etc. The propaganda from the media like the bbc.
30

acanthus,

Moscow 11/06/2008 16:54:36
Margo is right of course. Scotland is still full of neolithic Unionists who have lied to and cheated the Scots over North Sea Oil since the 1970s.

No matter what the fiscal arguments are , no matter how positive the futute might look and no matter how much the aspirations of the country are held back they will still revert to the same old tired lies and scare stories.

Their interests are not those of Scotland and the Scottish people and never have been.

31

Rasco,

Inverness 11/06/2008 17:07:30
Margo I am very surprised this paper has published your article,no mention of this story about North Sea Oil in Herald or Scotsman.
32

Busymale,

11/06/2008 17:11:21
Have any of these Unionists no pride in their country? No self blief that we can do it ourselves?

Oil is only part of the debate. Its about being a nation, taking responsibility for ourselves, and looking after our interests rather than giving our neighbour our assets to make decisions as to how much we are going to get back and told how to spend it.

No-one would turn round to their neighbour nect door and say "I've earned this money but I've no idea what to do with it. Here take it and use it in my best interests". Its pathetic and had we been independent it would have been a proposterous proposal to hand our nationhood to England.

Who ever got independence from England and then demanded to get back?
33

Dr. James Wilkie,

Vienna 11/06/2008 17:27:14
#25 Traquir. There is no dubiety whatsoever about where Scotland's marine border runs. That border was fixed in the year 1237 by the Treaty of York, and even after the 1707 union it remained the boundary between two distinct and independent legal systems. It runs from the Solway Firth in the west to the mouth of the River Tweed in the east, and it has never been altered in almost 8 centuries.

According to the international law of the sea the marine border is projected from the River Tweed on the principle of equidistance, until it meets the median line with another country's border, otherwise for 200 nautical miles. On a rough visual estimate, it would appear to run right up the middle of the Skaggerrak between Denmark and Norway.

That is the constitutional border. The present administrative border that meets the sea at Lamberton, north of Berwick, has no relevance in this connection. Berwick on Tweed was occupied by an English army in 1482, which was pure military aggression of no constitutional importance. Its present peculiar status dates from the 1502 Treaty of Perpetual Peace between James IV of Scotland and Henry VII of England, with Papal involvement. Since James was desperately anxious to marry Princess Margaret Tudor, for dynastic reasons, he bowed to the reality and agreed that Berwick would stay under English administration while remaining a part of Scotland, and this was one of the terms of the agreement, written into the treaty.

That status has never altered during the intervening centuries. Berwick has never at any time been transferred to England. It no longer has any strategic importance, and it is high time that this mediaeval anomaly was ended by removing the English administration from this part of Scotland. As far as fishing and oil etc is concerned, Scotland's marine border starts from the River Tweed, and not from Lamberton.

34

R_K_C,

11/06/2008 18:06:30
Right, back from my meeting, what did I miss?

#27 - Nonsense logic. From 1970 to 1999 output was increasing; it is now in decline. Extrapolating directly from 1970 to 2008 doesn't work.

#28, 29 - I don't care what impact it would have had. I'm looking at where we are now and what impact it could have in the future.

#30 - it's not beyond dispute, there is plenty of data to suggest North Sea oil is in serious decline; Even the "positive" articles like the Press Association one actually state that the oil finds are likely to be small in size and more expensive to extract.

#31 - No, social problems are mostly due to a breakdown in family groups and the sense of community and collective responsibility. You could look, for example, at rural communities in India, or the traditional bedoiun tribes of Arabia prior to first oil boom. Both groups exposed to tremendous hardship and poverty, yet maintained a sense of pride and community. Conversely, the now-rich Arab Gulf States have tremendous social problems with their young people, largely due to laziness and a sense of entitlement to a share of the country's wealth for no effor on their part.

#32 and #34 - who are you to pass judgement on whether someone has pride in his country or not? Noone is prouder Scot than myself. The neighbour analogy is also nonsense, a better analogy would be several people pooling their resources for their joint benefit. It's no good saying "if we had been independent when oil was discovered" - we could have been independent if that is what people wanted at the time, but clearly there wasn't a lot of interest, as far as I can recall there was some support for the SNP in 1974 and then it fell away and didn't come back until the 1997 general election.
35

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11/06/2008 18:20:48
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McMadman,

Saor Alba 11/06/2008 18:37:05
#36, get over yourself, you are clearly delusional and at least as far as this thread is concerned, largely unsupported.

Faigh na's fearr.
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11/06/2008 20:53:40
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11/06/2008 21:13:24
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11/06/2008 21:23:22
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Ugly George,

Edinburgh 12/06/2008 09:52:43
7 RKC
Apart from anything else Margo has got her facts wrong. Kuwait has been producing oil since the nineteen thirties and its current oil production is almost double that of the total UK continental shelf (UKCS). They are also planning to increase this amount. oil production from the UKCS is declining at a rate of 10-20% per annum.

I do wish that politicians and journalists would check their facts carefully before commenting.
41

Ugly George,

Edinburgh 12/06/2008 09:58:27
40 Traquir
The issue is not how long it will last but what the rate of production will be. Romania has been producing oil for over 70 years but is hardly awash with vast amounts of cash as the extraction rate is comparatively low. There may well be oil produced from the North sea in 50 years time but if the current rate of decline is not reversed the amount will not be significant.
42

A Clamper,

Edinburgh 12/06/2008 12:29:47
R_K_C - There are none so blind as those who will not see.

 

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