After last week’s lost bid for Scottish independence, oil fields of the North Sea will remain under British control. How much was oil a deciding factor in the referendum?
Scotland’s oil will remain under the control of Great Britain as a result of a majority vote against last week’s referendum for Scottish independence.
One of the main platforms of the Yes campaign was rooted in economic promises provided by the oil fields of the North Sea—a platform that the first campaign for independence ran on more than 40 years ago.
Since the discovery of the oil fields, the town of Aberdeen in northern Scotland has become one of the most economically stable regions in the British Isles, with some of the highest wages and lowest unemployment rates in all of Europe. Those voting Yes had hoped that by seizing the North Shore oil fields, 90% of which are within Scottish territory, Scotland would secure its economic power.
The Washington Post reported:
Indeed, the Yeses are counting on an oil windfall to pay for 1) free childcare for three and four year-olds, 2) indexing benefits and tax credits to inflation, 3) small pension and caretaker allowance increases, 4) shoring up health and education spending, and 5) creating a sovereign wealth fund.
In the weeks leading up to the referendum, former Scottish National Party (SNP) deputy leader Jim Sillars declared that energy giant BP would face a “day of reckoning,” and would be nationalized in an independent Scotland. In a passionate rant, Sillars stated:
BP, in an independent Scotland, will need to learn the meaning of nationalization, in part or in whole, as it has in other countries who have not been as soft as we have forced to be. If it wants into the ‘monster fields’ in the areas west of Shetland, it will have to learn to bend the knee to a greater power—us, the sovereign people of Scotland. We will be the masters of the oil fields, not BP or any other of the majors. If Bob Dudley thinks this is mere rhetoric, just let him wait. It is sovereign power that counts. We will have it, he will not.
But what will become of North Sea oil now that Scotland’s bid for independence has been denied?
If you guessed that it will stay safely in British hands, you would be right. From OilPrice:
For all the talk about energy transitions, new sources and untapped reserves, the energy sector craves stability. And so do the public. Alex Salmond, the outgoing First Minister of Scotland, may have crowed about how an independent Scotland would have obtained untold billions from fully tapping up its North Sea reserves but the transition of energy oversight from London to Edinburgh would have caused some real problems. Enthusiasm for independence might have taken a hammering if electricity or oil prices had spiked, even momentarily, while the handover was sorted out.
In spite of the nationalist pride and zealotry behind sentiments like those of Sillars, it seems Scotland had a pretty bleak future if that future were to depend on oil. A report from earlier this year by Sir Ian Wood found that North Sea exploration was at an all-time low. The report warned:
In the last two years less than 150m barrels [of oil and gas] has been discovered and if this trend continues, the UK will fail to recover even a small proportion of exploration potential that still remains across the UK continental shelf, which the Department of Energy and Climate Change estimate to range from 6bn to 16bn barrels [of oil and gas].
While it might not be ideal, the British government knows that it’s better to have depleted oil reserves instead of none. The next budget is expected to implement much of the Wood report’s recommendations to stimulate exploration of the North Sea.
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