My Inner Inventive Scot

One of the more illuminating aspects of the drastic oil price plunge has been the spiteful and counter productive reaction of the anti Scots. ‘And they wanted to go it alone. Ho ho ho,’ said one reader in the FT, encapsulating the phenomenon. It’s like a Road Runner cartoon where the crazy bird points and laughs at the Coyote while walking backwards towards the cliff edge…

To the small-minded Unionist this is an unexpected bonus to be relished – just remember to look suitably earnest when mentioning the thousands of job losses. (The implications for the loss of potential tax revenue to their own country simply doesn’t compute as they clearly don’t take pride in their country.) And imagine the irony of taking lessons from a country whose banks crashed and had to be subsidised.

If they take off the blinkers they will see that the fall is so severe and potentially enduring that the damage could be spread way beyond the North Sea and a political argument in Scotland. Although to date removing blinkers hasn’t been a Unionist strength.

A low oil price doesn’t just affect tax revenues, it reduces the rate of inflation which keeps interest rates low. That means savers don’t get a return and the share price of major companies is depressed. The fear now as the oil numbers combine with embedded low inflation from the financial crash is of deflation – when inflation goes below zero which helps our money go further but crucially has the effect of increasing debt, something the UK seriously wants to avoid with public and private sector debt soaring. The UK’s huge national debt heading for £1.6 trillion costs £43 billion or 8 per cent of all income tax just to service. It can never really be paid back so relies on inflation to eat away at the outstanding amount over the years.

Central banks are all struggling to bring inflation to around 2% so as to avoid deflation, but thus far they have failed. If prices remain low for a considerable period of time, it may lead to another crisis with deflation at the core.

Eurozone goods have fallen in price which seems like a bonus but if it turns into deflation consumers stop spending and so do employers. Confidence drops and people save which slows the economy further. This affects us all. We need to be cautious too about the reaction of powers heavily dependent on oil revenues. There could be further instability in the Middle East. The position in Saudi seems volatile with a diplomatic stand off with Iran and its economy being transformed by deliberately letting oil prices fall to damage the US shale market – with some success. Most of the shale oil wells are profitable only when priced above $60 a barrel.  Some have taken large loans to expand production and with prices low, these become unserviceable.  That puts a strain on the lenders, the banks.

Also we may have cause to watch Russian reaction. As the oil slump depletes the economy hard man Putin is not adverse to fomenting trouble to deflect attention.

I know none of this seeps into the one-track mind of the zealots but it’s worth taking their case at face value and asking: If a low oil price rules out independence, does a high oil price do the opposite? If $30 a barrel is too low, how much should it be to guarantee economic stability? Spoiler alert: the answer is no price per barrel will ever be good enough for Scottish independence. Campbeltown Loch could be bubbling with the stuff and it wouldn’t be good enough for independence. The truth is that for the anti Scots we will never be capable of making our own way even if our underpants were made of gold. What they’re rejoicing at is the loss of revenue to their own country which if it continues threatens (another) serious economic crisis and could spark international tensions. Whoopee! Serves you right, Salmond

At the same time, and because I’ll always be a believer, I find my hidden Inventive Scot coming through at times like this. First of all, nothing but nothing demonstrates better the utter folly of letting the UK take control of our natural resources than the failure to invest the oil revenues. Independence in 1970 when the British were hiding reports of how rich we’d be and their agents were lying about oil’s value, would have brought in a Scottish regime to husband the bonanza, create the oil fund that was requested and given us forty years of wealth, a fund to protect us from all seasons and way of avoiding the humiliation of our own money paying for Thatcher’s unemployment cheques. Instead we would have worried about coping with an overhyped currency and searched for ways of diversifying our economy. We could have lent to England at preferential rates.

The question never asked by the Unionists is: If Scotland relies on subsidy, why should this be so after 300 years of Union? How could oil be discovered and £300bn taken in taxes (at today’s prices) and still Scotland isn’t prosperous? That part is presumably down to our own ineptitude, not the incompetence of Westminster who had the control of oil throughout. Indeed, to make sure oil could not be claimed by Scots, the British set up a new economic zone, the UK Continental Shelf in 1964, to which oil income was assigned. That really was Scotland’s clue that we couldn’t trust the Brits.

So the lack of an oil fund today as the price plunges is a standing condemnation of British policy every bit as much as a mark of Scotland’s relative reliance on the black stuff. No Scot should let them get away with sneering at the impact of the oil price when not a bent penny of the windfall has been saved.

But my inner Inventive Scot is also whispering something else. Isn’t this an opportunity to move away from fossil fuels and fully embrace renewables? One reason I don’t vote Green is because I’d be a hypocrite. I endorse all forms of renewables and firmly believe in the need for subsidy. I love turbines. But I have always believed we needed the strategic importance and potentially huge income from the North Sea. If you remove that because you have no choice, you face up to the alternatives – you have to – just like an independent country has to find its way through every headwind and setback.

We already see the benefits of people switching to funds and portfolios focused on environmental sustainability as investors see the volatility of the fossil fuel markets.

Renewables are bigger than nuclear now. We already get 15 per cent of all our energy from renewables and expect to meet the target of a 100 per cent equivalent of electricity demand by 2020. Were being asked to up the ante by going for 50 per cent of all energy from hydro, wind and tide by 2030.

Greens argue for a managed transition away from oil and gas to refocus skills and investment towards sustainable sources. Thousands could be employed by investing in renewables and oil and gas decommissioning, rather than, as Patrick Harvie puts it, propping up an industry whose unburnable assets pose a huge economic risk.

In this of course we are challenged by the UK government which again does not have Scotland’s interests at heart. Subsidies have been cut and the experiment of carbon capture ended for short-term savings. Meanwhile British taxpayers are to be fleeced to pay for Chinese nuclear – perhaps a better target for Unionist scoffing?

The North Sea is far from finished but this looks like the chance to take the leap and transfer our efforts to decommissioning and all-out renewable development. Perhaps that can become the new bonanza.

And here’s a simple accounting point from Alex Russell, Professor of Petroleum Accounting at Robert Gordon University. The lower price reduces the value of the North Sea as an asset in any negotiations between Edinburgh and London. If it is deemed to be unsustainable, Scotland would be seeking compensation for taking over a wasting asset. ‘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.’

And shouldn’t we take comfort from the obvious fact that our economy hasn’t collapsed in on itself. In a difficult global environment Scotland’s economy is robust and diverse and a magnet for inward investment. We head into what some forecasters warn will be a year of global economic Argmageddon in reasonable health and, I believe, with a united sense of purpose built around the Yes movement. It isn’t zealotry that keeps SNP support high but an informed understanding of the incompetence and corruptions of a Treasury-run economy that is against our national interest, allied to a sense of solidarity built on pride and renewed dignity. We believe we can overcome the short-term difficulties. We are no longer cowed by the metropolitan maisters. We have been made resilient.

And a final thought. It’s only five years since the Unionists did the same sneering routine at Ireland when the Celtic Tiger lay legs aloft. It was a warning to Scotland. This is what happens when wee countries think big.

Well, Ireland’s economy grew by 7 per cent in the third quarter of 2015 compared with the same period in 2014. Britain’s grew by 0.5 per cent. There was increasing output in all business sectors and Ireland is now the poster boy for economic recovery – population 4.5 million and they still haven’t properly exploited their oil reserves.

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22 thoughts on “My Inner Inventive Scot

  1. Aye, but we need to decide in principle if we’re going to leave the oil under the sea or bring it up and burn it at some point. I’d say bring up the minimum amount required to switch us over to renewables and leave the rest be. This graph is terrifying to anyone who has studied atmospheric physics;

    http://www.esrl.noaa.gov/gmd/ccgg/trends/full.html

    and the atmosphere is the ultimate Union – no borders at all.

  2. Yeah the sneering at what they see as a flaw in the Indy argument just turns them into unpleasant people who rejoice in what they perceive as the misfortunes of others. You make a very important point in reversing the coin. They suffer more than we do because they take the lion’s share of the income from oil and they have squandered it – or at least, successive UK governments have. How do they answer that.

    I also suspect that many of those who crow at the low oil prices only do so because it’s the only argument they have against us, despite it being a specious one. Makes them know-alls without a clue. How often do you have to tell people that our economy would not be reliant on oil and that we’re perfectly capable of managing on the assets we have already. After a while their crowings and jibes become just so much white noise: easy to ignore.

  3. Fabulous. You have articulated the gnawing despair that I feel more pronounced each passing week. I’ll need to dig deeper to find my ‘hidden Inventive Scot’, at the moment my focus is two votes SNP in May.

    • Can’t understand your “gnawing despair”. Scotland has awakened, there is a new bounce in Scots’ steps, a new demeanor, Scots MPs are in Parliament in force, we don’t take shit anymore from Westminster, or their English media whores, the Yoonatics are irrelevant empty drums that make a lot of noise. The Scottish economy is in far better shape than Englands, oil is but a bonus and isn’t required to make Scotland a successful Independent country.

      So get rid of that gloomy attitude, take no notice of the SNP BAAD media and believe.

  4. Great stuff.
    (But did you mean £300bn, rather than £300m?)

  5. Excellent once again Derek – and for once I have nothing to add.

  6. I agree with the bloger who said when the oil prices go back up the bbc news staff will be wearing black armbands well said

  7. Here are some extracts from the Holyrood Energy Committee’s deliberations on security of electricity supply looking at the effect of renewables and providing different opinions on timescales of use. The heading is “Transition, flexibility and balance” and the link is here: http://www.scottish.parliament.uk/S4_EconomyEnergyandTourismCommittee/Reports/EETS042015R08Rev2.pdf

    The issue for Professor McInnes was not so much the transition to low carbon,
    given that Hunterston and Torness already produce such electricity—

    “We are talking about a reconfiguration of our energy supply from one that is
    dependable to one that is intermittent.”

    He said storage and interconnection had become the focus as we attempted to make a square peg fit in a round hole. His worry was not with renewables but with overegging onshore wind to the long-term detriment of affordable energy. Somewhere in the grid large-scale thermal generation‖ was necessary
    …” it does not matter how smart your grid is, you still have to put joules of
    energy into it somewhere.”

    The absence of thermal post-Longannet and in the scenario of Peterhead going and the no nuclear approach was of concern to Sir Donald Miller and Colin Gibson. Their written submission warned of the high risk of Scotland not being able to meet energy demand in the 2020s.

    The current rate of transition was an issue for Professor Haszeldine, who said,
    taking into account the current price and volume of renewables, it could take
    anything between 50 and 100 years.

    The Institute of Mechanical Engineers provided a gloomy outlook, suggesting the transition to renewables had not been logically thought through‖, the tools in place were inadequate‖ and the use of fossil fuels beyond 2050 appears inescapable.

    I came across this piece of research by Frigg et al which looks at the Climate projections done by the Met Office. The research may have particular relevance to the flood planning that is being done across the UK by governments, UK and Scottish. I’ll provide the abstract and a conclusion. Here is the link:

    http://static1.squarespace.com/static/54dcfad0e4b0eaff5e0068bf/t/55c11734e4b069fd4aee792c/1438717748794/18.pdf

    “Abstract
    The United Kingdom Climate Impacts Programme’s UKCP09 project makes highresolution
    projections of the climate out to 2100 by post-processing the outputs of a large-scale global climate model. The aim of this paper is to describe and analyse themethodology used and then urge some caution. Given the acknowledged systematic, shared errors of all current climate models, treating model outputs as decision-relevant projections can be significantly misleading. In extrapolatory situations, such as projections of future climate change, there is little reason to expect that post-processing of model outputs can correct for the consequences of such errors. This casts doubt onour ability, today, to make trustworthy, high-resolution probabilistic projections out to the end of this century.”

    “Conclusion
    We find little support for interpreting UKCP09’s projections as trustworthy projections
    for quantitative decision support, alongside significant doubts that the information
    required for such high-resolution projections is at hand today.”

    It is clear that the computer models on which energy policies, among other policies, are based are all flawed. This is what Richard Betts, a climate scientist and computer modeller at the Met Office says about the limitations of what his work can do to aid policy makers.

    “Everyone* agrees that the greenhouse effect is real, and that CO2 is a greenhouse gas. Everyone* agrees that CO2 rise is anthropogenic Everyone** agrees that we can’t predict the long-term response of the climate to ongoing CO2 rise with great accuracy. It could be large, it could be small. We don’t know. The old-style energy balance models got us this far. We can’t be certain of large changes in future, but can’t rule them out either. So climate mitigation policy is a political judgement based on what policymakers think carries the greater risk in the future – decarbonising or not decarbonising.

    A primary aim of developing GCMs these days is to improve forecasts of regional climate on nearer-term timescales (seasons, year and a couple of decades) in order to inform contingency planning and adaptation (and also simply to increase understanding of the climate system by seeing how well forecasts based on current understanding stack up against observations, and then further refining the models). Clearly, contingency planning and adaptation need to be done in the face of large uncertainty.

    *OK so not quite everyone, but everyone who has thought about it to any reasonable extent

    **Apart from a few who think that observations of a decade or three of small forcing can be extrapolated to indicate the response to long-term larger forcing with confidence.”

    Steve McIntyre has been looking at the predictive abilities of the computer models used in climate science.

    “I’ve done a boxplot for all CMIP5 runs. All of the individual models have trends well above observations, with the CanESM2 model from Andrew Weaver’s group being a wildly overheating performer. There are now over 440 months of data and these discrepancies will not vanish with a few months of El Nino.”

    and

    “If observed CO2 emissions have been at the top end of scenarios (as they have been) and observed temperatures have been at the very bottom end of scenarios, it seems reasonable to consider whether the models are parameterized too warm. From a distance, it seems like far more effort is being spent arguing against that possibility than in investigating the properties of lower-sensitivity models.”

    It seems to me that better policy might be just to wait and see.

  8. and of course there is now the character assassination progressing subtly against the SNP, with Tasmina now in their sights, who next?

    • Well argued Derek, and par for the course I’m afraid John. The good news is that it’s having abdolutely no effect on the doorstep. Hope that trend continues till the 6th, May.

  9. Not a sausage to add to that Derek. 🙂

  10. David Cameron promised a £200 billion oil bonanza to Scots but only if they voted No they did it’s the media’s job to hold the winners to those promises you know like home rule but still lab politicians repeat the tory party spin of “the most powerful devolved parlement in the world ” and again the media fail to hold them to account

    One final wee thing why has Norn Iron been given control over Corporation tax and not Scotland we’re back to oil it’s still the biggest contributor to corporation tax

  11. Derek, fantastic article again.

    I think you are right, the question that needs to be repeated over and over again is:

    If $30 a barrel is too low for Scottish Indepence, then how much should it be to guarantee economic stability?

    No Unionst would ever answer that one, it.would be like digging the biggest hole

    • It twins that other great unanswerable for yoons – If Scotland is such a greedy, whinging, economic basket case, your reason for retaining a union with such a nation is???

      The rest, as they say, is silence.

      Their narrative ran away from them. They were too successful in their campaign of denigration and demonisation. Now? Now they’ve no room to back away from it, no easy out. Frankly, I don’t think I give a damn anymore. I’d struggle to find even one establishment politician I respect enough to pause and listen to anymore and certainly no major media figure or outlet.

      They’re simply too wrapped in their own bubble of condescension and patronising bullshit. They’re more interested casting/projecting blame than offering solutions, or considering compromise. More interested in themselves, the state and all that goes with it, than the people it’s meant to serve.

      What they’ve done in pursuit of those things should, quite rightly, never be forgotten.

  12. I agree with all that’s been said. Unless we get Independence soon, however, the potential from renewables will be unrealised and it’ll be another great missed opportunity to build resilience and a nest egg for the future, in the same way we were cheated over North Sea Oil. Scotland’s renewables are truly enormous: wind, tidal, wave, hydro, solar (yes, the sun does shine occasionally), geothermal. Plus the development of a hydrogen economy to convert surplus renewable energy into a form that can be stored. Many of these technologies can also be developed at the micro level too – think roofs.

    But we need to be in charge, so that, for example suppliers aren’t penalised to grid-connect because they are “remote” from London, and so that appropriate levels of public as well as private money can be invested in developing the technologies and encouraging indigenous industries to flourish.

    I have for long believed that Scotland’s future is in renewable energy, but first we need to fight for independence, then we need to make sure our elected government pursues these policies.

    • Dinnae fas Broadbield. Independence will come. Tidal, hydro, wind and solar will always be with us. When we are independent; the sun will still shine (occasionally..), the wind will still blow, the waves will still roll, the rivers will still flow.

  13. Richard montgomery

    Is the whole oil thing just a distraction. If we are a basket case of a country with oil at a high or low price as per the unionist argument goes then surely once the oil goes we will all be running round in rags and begging England to feed us. I just dont find this scenario believable in any way. To think that the tories either blue or red are going to permanently subsidise another country forever out of the goodness of their hearts when they could get rid of us and invest billions in the City of London to make themselves even richer is pure fantasy. Are there other reasons that they want to hold on to such a third world country as they describe Scotland

  14. Derek

    If you are interested in how Scotland and the UK will transition to renewable energy there is very interesting work done by the Energy and Tourism Committee on security of supply. Some of the evidence was given directly to the Committee and screened. Some was written. All of it, It seemed to me, was influenced by the position, experience and prejudice of the speaker. For that reason alone, i found it very interesting and watched as much of it as I could. For example, written evidence was given by Sir Donald Miller (former Chairman, Scottish Power) and Colin Gibson (former Network Director, National Grid). Both are hostile to wind energy because of its intermittency and effects on the Grid. (Their submission is quietly scathing about UK energy policy on other grounds and is worth reading for that alone). Professor Hazeldine, whose professional background is Carbon Capture and Storage, thinks fossil fuels are likely to be needed for another 50 years. He believes CCS (Peterhead) was possible in 18-24 months. There is professional disagreement about the effects on security of supply of electricity to Scotland of the loss of Longannet and possibly Peterhead.

    Here is a link to the findings of the Committee. The evidence given is also available online and is worth catching in my opinion.

    http://www.scottish.parliament.uk/parliamentarybusiness/CurrentCommittees/93376.aspx#a14

    It seems to me that energy policy, in particular, is bound to be thorny because of the uncertainties of climate science though these are all too often played down. Research by Frigg et al looked at the computer modelling done by the Met Office for its Climate Projections Program. These Met Office projections are used at local and national level for planning purposes. Frigg et al find the projections untrustworthy for decision making. They say:
    ” The aim of this paper is to introduce and analyse the methodology used by UKCP09 and then urge some caution. Given the acknowledged systematic errors in all current climate models, treating model outputs as the basis for decision relevant probabilistic forecasts can be seriously misleading (Stainforth, et al., 2007). This casts doubt on our ability, today, to make trustworthy,high resolution predictions out to the end of this
    century.”

    Here is the link to Frigg: http://www.lse.ac.uk/CPNSS/pdf/UKCPPaper.pdf

  15. We don’t even need to worry very much about the carbon dioxide. If we could add one or two percent organic carbon to all our soils, we could cover our entire legacy load while making our soils far more fertile. The same process would enable to soils to soak up more of the water than lands on them, thus reducing flood risks. There are even some really interesting projects involving biochar production that may actually provide carbon NEGATIVE energy. And the whole time, we could be producing more, better food, helping to make our country more and more self-reliant and resilient.

  16. In terms of jobs lost, and correct me if I’m wrong but of the workers from the UK, are not most of those who have lost their jobs from the North East of England because they operated the buddy system of jobs for the boys and the rest of course overseas mobile workers who have now gone elsewhere
    And if that’s close to correct when the upturn in price happens will the local Scottish workers who are still on site not be better placed

    The media have banged on about 65.000 jobs lost but if they were all Scottish they’d show up in the unemployment figures but the figures don’t show that

    I put that point because an oil worker suggested to me that only about 2 in 10 workers were from Scotland
    perhaps someone with accurate knowledge might comment

    However I do wholeheartedly agree Derek no matter high or low Scotland is deemed useless to suit the purpose at any given time and if that’s all our opponents have got “Fear” history tells us that is not an everlasting strategy for control, but education brings freedom every time

    Scotlands strategic place on the map geographically even without everything else we have makes us the Location Location Location place to want to be involved in and that I think has always been the overriding reason for the Big British Panic and the “Where do we park our Subs” Americans

    Remember, for America, Independence Goood… for Scotland, Independence really really Baad, we love you please don’t go, or you’ll be broke, get cancer and die, nobody will want you, and you’ll be world outcasts,

    You have to think that was all a bit over the top, and if the softies won’t see that, their eyes need testing

    Shall we open the bidding Apres Independence

  17. The latest coal fired power stations are extremely ‘green’. so much so, that Germany is shutting its nuclear stations and in the process of building over 12 new coal stations. we have been told we have 300 years worth of coal under our feet, maybe, or maybe exaggerated, but even a 100 years of coal would do us, imagine a building program of power stations, and opening up the coal industry again, we would be begging people to come and help us do the work. The years with the coal stations could provide relatively cheaper energy, and give us the time and resources to concentrate on the change to renewables, as we built the renewables, we would produce excess energy we could sell off to europe. giving us yet more to put towards restructuring our whole nation.
    As to the anti scots, their double lunacy makes me laugh, its like we are a cancer in them, (in their minds) and when we say, ok we will leave and go away and die, (as they say we will if we leave) they are so bitter and twisted in the head, they refuse and tell us they are prepared to die before letting us free. lol. cut your nose off to spite your face is such an apt metaphor .

  18. I notice several people making comment in regard to energy policy but the key thing that needs to remembered is that energy policy is NOT devolved and so is 100% in the hands of Westminster. To those in the know that is obvious and we can see that clearly enough via the lack of an oil fund and through the actions of the Tories in regard to the grid and the renewables sector, the later of which I believe they are deliberately trying to destroy. I still meet other Scots who do not even seem to understand this and just lap up comment from conceited Unioinist who crow about ‘Salmond’s failed renewables exterprise’ but don’t seem to notice that is was the same conceited Unioinists who have undermined the whole thing. Ah to have a free press who might bring this too light but alas we are stuck with institutions like BBC Scotland who have the uncanny ability even when forced to consider a subject to alter the agenda and fail to probe the areas that would be of interest to at least 50% of us.

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