SCOTLAND should indeed be glad still to have quite a few barrels of crude on its doorstep, whether the UK collects the revenues or Scotland itself will.
Cash benefits come in irrespective of collection point. But as cannot be pointed too often, the oil will run down and out, increasingly so in a couple of decades or 50 years, take your pick of knowledgeable experts ("Salmond faces grilling after tycoon warns oil running out", The Herald, August 21). So it's not just our youngsters whose middle-age should be the worry, but all subsequent generations which will have to deal with the multi-billion-pound lost revenue.
Holyrood's estimated fiscal deficit is tempered to a limited extent by this revenue, which as is well known is reckoned to be between £4-£7bn or even £14bn annually (again take your pick of experts), but there is still nothing convincing on the table to explain the details of how the deficit as it increases as the oil does diminish can be slashed by Holyrood's enhanced growth, productivity and immigration-linked tax collections if separate.
The Yes campaign's latest through-the-letter-box circular as usual ducks the issue of this long-term financial stress as it hides behind repeating the general assertion that a more prosperous fairer Scotland will arise (but there is no magic wand for it, whatever that means). Just having faith in a "better future" is no answer to meet the concerns about ever-increasing public expenditures adding to the existing cumulating yearly fiscal deficit.
Joe Darby,
Glenburn, St Martins Mill.
Cullicudden,
Dingwall.
AS authors of the N-56 report on the future of oil and gas we very much welcome Sir Ian Wood's confirmation that recoverable oil is far higher than that outlined in the Office for Budget Responsibility figures (OBR).
What we stated in our report is consistent with both Sir Ian Wood and also oil economist, Professor Alex Kemp. We highlight that under a high-production scenario there are 14.9 billion barrels of oil and gas recoverable between now and 2040, and we also considered a medium-production scenario of 12.2bn barrels and a low-production scenario of 9.5bn barrels. Sir Ian states there are 15-16.5bn barrels and, in evidence to the Scottish Parliament in April, Professor Kemp stated that 14 billion barrels could be produced by 2040 with implementation of the Wood Review recommendations to improve production efficiency.
There are indeed an estimated up to 24bn barrels in reserves, as acknowledged by Sir Ian in his own review on the future of the industry, but these are not all recoverable as the figures above illustrate, although as technology improves these will potentially increase.
The recommendations outlined in our report to maximise recovery include a more competitive tax regime for the North Sea, such as tax incentives to boost growth, a long-term oil and gas industrial development plan to foster economic growth and the co-location of policy and decision makers responsible for oil and gas taxation and regulation to be moved from London to Aberdeen. Some of these are Sir Ian's own recommendations in his Wood Review.
If Sir Ian is right and there are up to 16.5 billion barrels recoverable, then future oil taxation revenues would be even higher than this, perhaps as high as £400 billion between 2014 and 2040, far higher than the OBR figure of about £60bn. This confirms the N-56 analysis that, based on rising oil prices and industry views on recoverable reserves, the remaining value of oil to the economy and to the Treasury could total around the same as the total historic value received to date.
Graeme Blackett,
BiGGAR Economics,
Midlothian Innovation Centre, Pentlandfield,
Roslin,
Midlothian.
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