Bishop Hill Picking losers
Jun 17, 2015 Energy: gas Nicola Sturgeon is apparently to demand that the UK government provide incentives for North Sea oil and gas exploration. Given that the North Sea cannot compete in the face of the glut of energy from the Middle East and the unconventionals, this would appear to seem to be more a futile gesture than an idea that might have some practical effect.
And while the sentiment of the proposal is sound enough, you have to wonder about the decision of the Holyrood administration to back yesterday's fossil fuel industry, while putting stumbling blocks in the way of tomorrow's. I'm thinking of course of the moratorium on unconventional oil and gas development north of the border.
Put alongside her all-out support for renewables, it's hard to avoid the impression that Ms Sturgeon loves a loser.
Reader Comments (52)
So the SNP like Ian Wood now? I'm having trouble keeping up.
As usual when it comes to the SNP most of the posters here do not let their ignorance stand in the way of their prejudices.
After the 211 tax increases a number of operators in the North Sea postponed or abandoned large projects in the North Sea. They did so because the tax rises made difficult or impossible the long term plans that such major projects require. It was nothing to do with the price of oil.
The Wood Report (from a firm Unionist) makes it perfectly clear that DECC was unfit to manage a mature field such as the North Sea. The Wood Review has been accepted by the Westminster government. There were a number of criticisms which made it fairly inevitable that the Review would have to be accepted. First, the instability of the fiscal terms applied to the industry by successive governments made planning difficult. In a competitive industry that made it less likely that returns from the North Sea could be maximised.
Wood stated that DECC was not equipped to manage a mature field. There were insufficient numbers of staff with inadequate knowledge and resources. Management of the field compared unfavourably with the resources devoted to the same exploration area by the Netherlands and Norway. I write this from memory but the detail of the criticisms made by Wood is interesting, especially when, in the period running up to the referendum he changes his mind about the volumes of oil that may be extracted from the North Sea.
The comparison with Norway makes for depressing reading about lost opportunities. Though not mentioned in the Wood Review this year the Norwegian government opened a new research centre. It has a clear objective. It is to raise the average recovery rate of oil from exploration fields to 60% from the current level of 50%. The UK like most other countries, has an average recovery rate of 35%.
The SNP's policy is to have a mix of sources of supply of energy. In this, it perfectly matches the Westminster government.
When Montford writes about the SNP it would be less tedious if he did a little research before soiling his pants and encouraging the more credulous of his readers to follow.