AS the Prime Minister announced hopes to dole out hundreds of new oil and gas exploration licences today, many found themselves asking: “Wasn’t it supposed to be running out?”
In the run-up to the 2014 independence referendum, Scots were treated to numerous warnings the wells of oil and gas were running dry.
It was a boon to the Unionist campaign, undermining as it did the sunny projections for independence forecast by the Scottish Government on the basis of optimistic readings of the North Sea situation at the time.
Today, the Prime Minister’s spokesperson told reporters it was estimated there is still around six billion barrels’ worth of oil laying in wait beneath the North Sea.
Wood's warning
In an explosive interview with the specialist website Energy Voice the month before the 2014 referendum, oil tycoon Ian Wood warned the Yes side’s projections for future oil revenue were too optimistic.
His comments were seized on by the Unionist side, with No campaign leader Alistair Darling calling Wood’s assessment “devastating”.
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But they were dismissed by then-energy minister Fergus Ewing, who said: “This is ultimately a debate about exactly how big Scotland's remaining oil reserves are, and most countries are not nearly lucky enough to be in that fortunate position.”
‘Not what it was’
Just days before the independence referendum, the Washington Post ran a story filed from Aberdeen, which quoted John McLaren, an energy economist with the now-defunct Fiscal Affairs Scotland think tank, as saying Scotland’s energy reserves weren’t what they were in the 1980s.
He told the paper: “The early to mid-1980s was when Scotland would have done extremely well if it had had all the oil.
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“But there’s no prospect of it getting to anything like what it was in the past.”
Volatile predictions
Controversy was sparked in July 2014, when Robert Chote, then-chair of the Office for Budget Responsibility, wrote to the Scottish Parliament to explain why he believed there would be a sharp fall in oil and gas tax receipts in the coming years.
He predicted a fall in tax receipts from the North Sea from £6.1bn in 2012-13 to £3.5bn in 2018-19, with steeper declines to come. Chote’s predictions were more optimistic than what was borne out in reality – the real number was just £1.2bn in 2018-19.
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In his letter to the Scottish Parliament, Chote said: “Oil and gas receipts are the most volatile revenue streams in the UK public finances and forecasting them over even short horizons is extremely difficult.”
More recently
A controversial paper published in 2017 by Edinburgh University geologists said there was only a decade left in North Sea oil and gas.
The paper, published in The Edinburgh Geologist, claimed that just 10% of the recoverable oil and gas remained – predicting the wells would be practically dry by 2027.
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