By David McGuinness, North Lanarkshire , Scotland.
David Milligan, Glasgow, Scotland.
Sajjad Khan Bangash, Islamabad, Pakistan.
On 18 September 2014 Scottish voters threw away the opportunity to take control of their own destiny by rejecting the idea of breaking away from the overpowering influence of Westminster.
The reasons for the “No” vote are many and varied. But fear was high on the list of factors as many pensioners were consistently reminded by the media that their future pensions would be seriously in jeopardy, their houses would fall in value and in any event they wouldn’t even have a currency that would be acceptable anywhere.
The fact that 98 per cent of the remaining 24bn barrels of oil in the North Sea lay in the Scottish part of the UK Continental Shelf was dismissed as being more of a liability than an asset in an independent Scotland. The argument used was that the oil industry would shut up shop and go elsewhere.
Well, at least that is well on the way to happening despite the ‘no’ vote.
According to Oil & Gas UK, the industry’s representative body, over 65,000 jobs have been lost already in the past year.
And the knives have been out in force as unionists and non-SNP political parties rejoice in their analysis of the devastating impact the plunging oil prices would have had on the economy of a separate Scotland.
There is some logic to their argument. Oil at $47 a barrel will raise less revenue than oil at $114 a barrel. But, and it is an enormous but, if Scotland had voted “yes”, the first conversation that Holyrood would have had with George Osborne would have been along the lines of this:
It is precisely those types of negotiations that are overlooked in all the current media hype around what the impact of low oil prices would have had on Scotland’s economy.
A low oil price in the aftermath of a “yes” vote , I believe would have secured less of a burden for Holyrood with respect to Scotland’s share of the national debt; the change of ownership of the North Sea oil and gas reserves would have been a bargain basement buy.
Oil revenue is the icing on the cake of the Scottish economy. There would have been some manageable short-term economic pain resulting from the current low oil prices. But, oil prices will rise in the future and the North Sea assets would be better protected in an independent Scotland.
“So, now after the sterling work Mr. David McGuinnes has done we can now make some “real” business assumptions.
Last year in April, Sir Ian Wood wrote a report for the UK govt on the recoverable oil in the North Sea left before it runs out. The considered amount was put at 28 billion barrels of oil.
Just before the referendum, he strangely changed his mind and almost halved his previous estimate to an astounding 15 billion barrels of oil left.
Just at that time we heard confirmation of the “proven” Claire Ridge oilfield which has now been confirmed as the largest light sweet crude (highest quality) oil field in the world. The UK govt were keeping it a secret so that it wouldn’t be a factor in people’s minds prior to the referendum. Needless to say Claire Ridge never figured in Sir Ian’s report or subsequent change of heart.
If we use the low, low price that the oil sits at now, and if Scotland was independent then if we just use Sir Ian’s lower estimate for barrels of oil left, we get….. (drum roll)……..
Now do you see why Westminster will pull out every stop and every dirty trick they can to keep Scotland as part of the Union.
Okay I’m compelled to write this as I’m fed up hearing about the collapse in the oil price as being a disaster for Scotland so here we go some simple maths and facts about Scotland’s oil wealth.
David McGuinness ‘s Economic Calculation on Scotland Oil Production and Westminster share.
Scotland and Oil for Dummies:
Oil at it’s peak of $120.00 a barrel.
Tax take = 70% to Westminster .
70% of $120.00= $84.00.
Scotland’s share of that $84.00 is per capita which = 8.4%
Scotland share of the $84.00 = $7.05.
Westminster’s share of that $84.00 = $76.95.
Oil price as it now stands at $47.54 Tax take still 70%.
Tax take to Westminster $33.27
Scotland share of that $33.27 is per capita which =8.4%.
Scotland’s share of the $33.27 = $2.79
Westminster’s share of that $33.27 = $30.48.
So in Summary even at it’s lowest price Scotland would be far better off with it’s oil wealth in it’s own hands than with Westminster even at it’s peak.
As you can see from the simple sums above an independent Scotland would not now be worse off because of the fall in the oil price because at it’s peak we can see from the figures when oil was at $120.00 a barrel under the current arrangement we only get $7.05 per barrel .
Hope that clears that up.