Scottish voters have every right to feel confused about Scotland's oil.
Last week, they were told by the UK Office for Budget Responsibility, that oil was running out and revenues will dwindle from 4% of GDP today to 0.03% by 2040. The Scottish Government insists oil production is expanding, that there remains £1.5 trillion in revenues to be extracted from the North Sea. Who is right? They both are.
As explained by Professor Gavin McCrone in today's Sunday Herald, it is unlikely we will ever again see revenues of £28 billion a year flowing to the UK or Scottish Treasury. But Oil & Gas UK, the industry body, is adamant that production is set to increase from 1.5 million barrels a day to two million barrels, as a result of new fields. Last year, PricewaterhouseCoopers predicted an investment boom in the North Sea of up to £376bn, and that seems to be true.
On Good Morning Scotland in March, Business Secretary Vince Cable said: "I think that in the past there's been a belief that [the North Sea Oil industry] was declining, and it isn't declining, it's got great prospects."
Scotland has a valuable asset in North Sea oil and gas, 98% of which is in Scottish waters. It would irresponsible to base any country's economic future on a volatile natural resource, but the case for economic independence does not depend on oil alone. Scotland has a financial services industry employing 100,000 people, more world-class universities than France or Germany, a burgeoning renewable energy sector, a healthy tourist industry and useful exports, including whisky. For a country of five million, that is not bad.
Scotland is the only country, region, principality or state to have discovered oil and not received any direct benefit from it. Even Shetland, with 22,000 people, secured an oil fund worth £1bn. Norway has one of the largest sovereign wealth funds in the world, worth $700bn. In Alaska, citizens receive an annual dividend as their share of oil revenues.
In the 1970s, the UK Government underplayed the value of North Sea Oil in order to discourage nationalism. The unionist Better Together should be careful of playing the same game today.
Between £200bn and £300bn in North Sea Oil revenues have gone to the UK Exchequer since oil was discovered nearly 50 years ago. Much of it went to finance tax cuts, the deindustrialisation of Britain and to take on the trades unions.
It is not greedy or selfish for Scots to argue this wealth could have been put to better use. Nor is it self-centred to argue that today, with Scotland's serious social problems, that future revenues could be put to better purpose too.
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