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Two bald men fighting over a comb

May 16

Posted by James in Constitution, Energy | 5 Comments

Scotland has endured forty years of debate about North Sea oil – who owns it, how much is there, what is it worth, can we afford to burn it, can we afford not to, and so on. It’s been a totemic issue for the SNP, with their early successes in the 1970s built in no small part on the slogan “It’s Scotland’s Oil“. Some on the fringes even believe the marine border between Scotland and the rUK was changed prior to devolution to diminish the proportion that would indeed be Scottish in the event of independence (pro-tip: negotiations over independence won’t be trumped by a Westminster statutory instrument).

More recently, though, there’s been a flurry of excitement from the nationalist side about the reserves that remain and the value of them to a future independent Scotland. There are three problems with this.

First, the argument on increased value is based primarily on a massive (and entirely plausible) projected increase in the cost of oil. The stuff is, after all, finite and globally the more readily accessible portion of it has indeed been used. However, not only do all those revenues not just accrue to Scotland, given we don’t have a nationalised oil industry, as a nation we also use a substantial amount of it. As Chris Skrebowski of the Energy Institute put it in 2008:

Alex Salmond’s predictions are simply wrong. Even with optimistic assumptions about future North Sea oil production, and even if Scotland was allocated all of that production, an independent Scotland would be likely to be a net importer of oil by 2015 or 2016. By that stage, given the global decline in output which has already begun, we will have to buy oil on the open market for two or three times the current price. It’s completely fraudulent to suggest that Scotland can just live off its oil wealth now.

The extent to which high prices benefit us while we remain a net exporter can be debated (i.e. how much of the benefit accrues to the Treasury or a future Scottish exchequer), but as soon as we’re a net importer high prices only hurt us.

oil chartSecond, although Chris’s dates there may be a bit pessimistic, the trends on output are clear. I asked a friend in the oil industry for the 1980-2020 output figures, and the graph to the left shows them for both oil and gas in kboe/day (red is oil, green is gas). The projected rise and fall again between 2012 and 2020 is down to a few factors, notably a couple of new developments plus the closure of Schiehallion during 2014 and 2015 while they replace their FPSO, effectively postponing production there for two years.

The baseline for that graph is zero, too. You’ll hear a lot over the next few years about a boom as oil output goes up from 888kb/d last year to a projected 1,429kb/d in 2016. But it’s just a blip.

The bottom line is this – the glory days of North Sea oil are over, and there is no prospect of anything like the 1999 peak in output being repeated. Last year’s figure is less than a third of that peak, and the long-term trend is down.

The third problem is this. We can’t afford to burn it all, because of a little thing called climate change which the unGreen parties are broadly ignoring, and any valuation of the reserves that assumes we can afford to burn it risks another bubble and crash.

Scotland can afford to be independent, and we are energy-rich, but our true lasting assets are the wind, the wave and the tides, not the dinosaur wine. Arguments with Westminster about who should own the latter are an embarrassing distraction. Even the climate change sceptics should realise that the raw economics make it time to plan for a post-oil economy, to invest in public transport not endless new motorways, to turn planning around so local communities come before commuting, and to switch to supporting low-carbon industries.

Arguments over how much oil there is are missing the point

Mar 11

Posted by Dom in Democracy, Economy, Energy, Environment, Ideology | 15 Comments

An independent Scotland will ban nuclear weapons, we are told. Top stuff. I’m all for it.

Nuclear weapons are amoral and have the potential to kill millions of people if they were ever used, as well as belonging to an age now past.

But there is a bigger threat to  global peace and wellbeing lurking in Scottish waters, one which the more head-in-sand types in the SNP leadership and UK government are all too eager to embrace.

Scotland is about to undergo a second oil boom apparently. At least according to the First Minister.

And in the week that a leaked document accepting the idea of change and adaption as a central component of any society made the headlines, we are told that things shall always be as they have been, for ever more. The boom becomes a beat and the beat goes on.

What is pretty clear is that we can’t just turn off the oil industry. The Scottish economy would collapse, and thousands of people would lose their jobs. Like those peace-loving Swedes exporting Bofors armaments far and wide with a shrug of their shoulders and and a nod to the employment statistics, it is easy enough to take away the pain of responsibility with a few spoons of relativism.

And it is incredibly tempting, because all those guns and all that oil pays for the welfare and investment in the public good which so many right thinking people want in a society.

But the kind of politicians who would take the oil and look away are the same type of person who would use the cheats on Championship manager, only to wonder why winning the European Cup carries no sense of achievement. It’s the Dorian Gray of natural resources, and for every single drop pumped out the official portrait at Bute House will turn a touch more grotesque. Or maybe Faust if you want. They’re all the same basic metaphor.

It’s our oil till we’ve sold it, and then it’s another man’s grievance.

There is no denying that the low-carbon world which we must inevitably transition to – either by design or by sheer necessity – will and must come. I’ve stood in the gallery at Holyrood and watched the whole parliament pat itself on the back over climate change legislation. You can call yourself world leading or pioneering as much as you like, but if you then choose to adopt a position which runs counter to received scientific wisdom and moral defensibility you will find yourself leading a world of one.

Because the emissions from an ever expanding Scottish oil industry will kill more people than Trident, be it in the form of air pollution or crop failure, flooding and conflict.

And because we must transition to a sustainable economy, does it not make sense to do it immediately?  I’ll be voting Yes to change Scotland into the country it can be, not into an unthinking and morally indefensible oil state.

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Lib Dem let-downs: too cheap to meter

Feb 19

Posted by James in Energy, Environment, Westminster | 7 Comments

atomictreeYou can set your watch by the Lib Dems. Every promise they make is worthless, and each one will be broken precisely at the moment at which it is tested (apart from on increased tax allowances, which are more regressive than might be thought). The latest is on nukes, predictably enough. In opposition they were against nuclear power altogether, but coalition changed that: the new line was yes to nukes, but without subsidies.

Even Cameron had been firmly set against subsidies: “We’ve taken the very clear view that there shouldn’t be subsidies, so if nuclear power stations can make their case in the market and be built, then they should be able to go ahead. That’s been our view for a long time. Our view has always been no subsidies, but if they can come forward as part of the energy mix then that’s fine.”

As the industry gradually retreated from the idea of new plants, with one eye on the chaos in Finland, the coalition clearly started to panic (can you hear Sir Humphrey warning about the lights going out?), and today we find out that, as predicted, the taxpayer will indeed be forced to pay for these white elephants.

The apparent aim is to keep the cost of nuclear power stable just below £100 per megawatt hour by concealing the fact that the cost is above that. It must seem quite cunning to divide the cost between energy consumers and taxpayers, who are, after all, largely the same people. Worse, that same piece confirms we’ll be locked into this absurd subsidy for up to 40 years. If the actual price of nuclear generation falls, as the enthusiasts think and the industry claims, this move would mean we’d just be handing over even more money to EDF. This isn’t a market. A true free market would never build nuclear plants: the entire economic justification of these new stations to shareholders will be based on our money.

To be fair, a true free market wouldn’t be building offshore wind just now either: it currently costs around £140 per megawatt hour. But then generating from renewables has another purpose: decarbonising our power system, and the costs of offshore wind are falling. The Crown Estate looked at the numbers, and by 2020, which ain’t far away, the costs of offshore will come below £100 per megawatt hour, and it doesn’t come with the massive decommissioning and waste disposal costs that a new nuclear fleet would bring (costs that would be borne by the taxpayer, natch).

The scale’s comparable too: offshore wind isn’t niche. That same paper notes that licences for 10GW-worth have already been granted, just in Scottish waters. That’s a ninth of the UK’s energy requirements (and about 100% of Scotland’s needs).

This decision, therefore, is pure ideology, not anything approaching rational either on economic or environmental grounds. Yet again, anyone who expects principled consistency or even pragmatic flexibility from the Lib Dems has just been disappointed. The only two things they’re consistent on are a love of Ministerial office at all costs and an ability to abandon principle the moment it comes under pressure.

Jumping into bed with the Swedes

Feb 15

Posted by Dom in Culture, Economy, Education, Energy, Environment, Europe, Gender, Holyrood, Ideology, International | 8 Comments

Shetland's hybrid Scots-Scandinavian flag

Shetland: Already halfway there

There have, in the past week, been a few noteworthy articles regarding the Scandinavian shadow which looms large over the issue of Scottish independence, as well as the future and makeup of Scotland’s economy, welfare system and society more generally.

Now I write this as somebody who knows a fair deal more about Scandinavia than most, for both personal and professional reasons.  A colleague of mine in the Greens remarked that the next Scottish Green manifesto should just be called ‘Scandinavian Nirvana’, such is the appetite in the party for increased welfare, greater social freedoms, gender equality and local democracy. I wholeheartedly agree.

Which brings me to something said by Blair McDougall in a BBC interview on the independence referendum. He accuses his opposite number in the Yes campaign, the significantly more articulate and less hackish Blair Jenkins, of wanting ‘57 per cent tax like in Norway’. There are indeed people in Norway paying that much tax, but these kind of people are not the salt of the earth working men and women which McDougall thinks will be crushed by the weight of Kaiser Salmond’s iron taxation, if he did indeed have such plans.

Then there was a report in The Economist which made the odd logical step of collating the radical reforms by centre-right governments in Sweden and formerly in Denmark with the high living standards and safe economies of the Nordic countries. As the Swedish journalist Katrin Kielos noted, there is an awful schizophrenia about the new craze for the Nordic centre-right, in that it assumes that being Scandinavian is a virtue in itself and argues that the path forward for these secure and durable systems is to follow a more British or American model . It is a trend which wishes to dine on the fruits of the Scandinavian countries’ labour whilst seeking to undermine it at its foundations.

The whole thing is illustrative of the fact that there is a huge amount of ignorance about the way in which Scandinavian society functions, and that this ignorance can be used to significant political advantage. It is also debatable to what extent it is even appropriate to address the Nordic countries as a single unit. There are however certain things which underpin  ‘the Scandinavian model’ which Scotland would have to adopt were it to develop in such a direction.

The first is a strict ethos of universalism. Not all services are free in Sweden or its neighbours, but notable by its absence is the incredibly British notion of selective assistance. Britain seems to implicitly accept that there should be huge gaps in income between different levels of society, and that one of the roles of public welfare is to alleviate this. It is a mode of thinking which the New Labour project perfected with its targeted alleviation, support for bright pupils from state schools and university access bursaries, without ever tackling the structural causes of poverty and discrimination.

Secondly, the way in which Scandinavian trade unions work is different to the British model. The nostalgia for the 1970s which pervades much of Britain’s left ignores the fact that old British models of trade-unionism were what allowed public support for the radical reforms of the 1980s. The systems of collective bargaining employed in Sweden and relatively high levels of unionisation amongst what might be termed normal people means that it is both destigmatised and can claim to represent large portions of the population.  This system has come under attack from centre-right governments in recent years but has survived relatively intact. The Scandinavian countries do not have a legal minimum wage, but they do have an effective minimum wage proportionally higher than Scotland, leading to a reduction in income inequality before the tax system has even played its redistributive  role.

And once tax is collected, where does it go? Not into benefits as they might be normally understood, but rather into the provision of universal services.  Childcare, incredibly well funded education systems, transport and infrastructure and healthcare.  The biggest challenge to Scotland is whether it is possible to transfer to this type of system given the appalling disparity evident in the country and present. It is in the interests of every Scottish woman to vote for a scenario which will provide the funding and structures for them to work and live on the same terms as men (and from a male feminist perspective, in men’s interest too).

Now to return to Blair McDougall and his mythical 57 per cent tax rate, I would say that it would only become an issue when you earn as much money as a senior press adviser or an MP.  Having large tax reserves means that in times of crisis governments are able to effectively deal with them, unlike the British model of medium taxation on an out of control financial system without any thought as to the after effects.

So to be realistic, adopting a Scandinavian social model would involve higher rates of tax, but it would also involve higher wages and better public services. In real terms incomes might well be higher, or at least remain static whilst providing for higher levels of public investment.

The whole thing is also dependent on a grand narrative. People vote for things because they believe in their viability, and the Scandinavian system is underpinned by a notion of functional redistribution different from the dominant discourse in Britain, and even in Scotland. It isn’t about smashing the rich or shooting bankers at dawn, but rather about building a cohesive society which works in the interest of all. As Norwegian Prime Minister Jens Stoltenberg says, “to create we must share, and to share we must create.”

David Leask’s excellent ‘As Others See Us’ column in the Herald, in which a group of Norwegians were asked for their opinion on independence, was revealing. The lack of interest in Scotland’s constitutional future was unsurprising – I frequently find myself explaining to Swedes the ins and outs of the independence movement – as Scotland is not politically visible. The Swedish daily Dagens Nyheter  recently published a feature on Europe’s contemporary independence movements which mentioned Scotland in the same breath as the Northern League in Italy and Flemish separatism in Belgium, entirely ignoring the broadly leftist motivations found in the majority of pro-independence groups and parties in Scotland. The challenge will be to explicitly build the construction of a sustainable and humane welfare state into the Scottish cultural narrative at home and abroad.

Neither would we or should we transform Scotland into Scandinavia overnight. When talking with a good friend of mine about how I hoped to live in a Scotland where I felt the state and society treated me and any potential wife/partner equally she smiled wryly and wished me good luck, with some justification. But that isn’t to say that we shouldn’t try. I answered that to combine the best aspects of Scotland and Sweden would create something beautiful, but that it would require the type of radical social change not seen since the 1960s. It would be a national project which larger countries would be entirely incapable of, but which might just work in Scotland. Scandinavia might be a fluid concept with many faces, but the values which it ostensibly represents are what we should really be aiming for. Both financially and morally, we cannot afford not to.

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Power from the people

Jul 26

Posted by Malc in Energy, Governance | 18 Comments

In the wake of the Japanese earthquake and the danger it posed to the Fukushima nuclear plant, most of Europe has been reconsidering its use of nuclear energy.  In addition to the European states who have never used nuclear power (Austria, Belgium, Denmark, Greece, Ireland, Portugal and Spain, amongst others) Germany recently has decided to phase out nuclear power.  Poland is due to hold a referendum on the issue at some point soon while Silvio Berlusconi’s intention to re-introduce nuclear as part of Italy’s power supply was thwarted as Italians turned out to defeat the measure in a referendum.

While the previous UK government committed the UK to building new nuclear plants in 2006 but the Scottish Parliament – with a coalition of the SNP, Liberal Democrats and Greens – voted in January 2008 to use planning powers to block the building of nuclear power stations in Scotland, confirming what had been long-held policy positions for each of the parties as the policy of the Scottish Parliament.  While the new Scottish Parliament, given its SNP majority, is likely to maintain its anti-nuclear stance, the UK Government – as recently as October last year – set out plans to build new nuclear plants in the UK, and re-affirmed commitment that in March 2011, post-Japanese earthquake.

However, during discussions on the Calman Commission and contained within its interim report, there was some mention that the Scottish Parliament’s effective veto over new nuclear might be on the table, that the UK Government may be looking for ways of removing this as a means of securing the UK’s nuclear energy future.  Naturally this provoked a heated response from the then-minority SNP government, and the issue was dropped from the final report.

I mention all of the above as the prelude to a fairly radical idea: the Scottish Government should perhaps hold a referendum on the issue of nuclear power in Scotland.

Here’s why:

1)  This is a serious political issue, and one on which the public have a vested interest in deciding.  There are still massive issues with nuclear waste disposal and getting it right is something which extends beyond the 129 MSPs who represent the Scottish public.  It can also be spun as a moral issue – on the same level as divorce or abortion, both of which Ireland has held referendums on in the past.

2)  The Scottish Parliament has signalled its intention to block the building of nuclear sites in Scotland but that block is based only on planning regulations.  Holyrood does not have powers over energy policy, and if the UK Parliament deemed it necessary or prudent to build new nuclear in Scotland, it could over-rule the Scottish Parliament’s decision.  A referendum which showed public support for the Scottish Parliament’s position would give further legitimacy to Holyrood’s decision, a clear mandate from the people on this particular issue.

3)  The fact that energy remains a reserved issue would provide for some conflict with Westminster if it was perceived that the Scottish Parliament were seen to be interfering in an issue which is not within their purview.  However, Holyrood – like Westminster – isn’t bound by any public vote in a referendum.  The referendum, constitutionally speaking, can only be advisory.  If Holyrood were to hold a referendum on this issue it would provide a blueprint for how an independence referendum might be conceived.

4) Finally, such a referendum would bring together elected representatives and activists of all parties and none to support an idea which crossed party lines.  The experience of such a campaign – cross-party, in support of an issue which is bigger than each of their individual goals – would aid preparation for a future referendum… say on independence, where a similar cross-party effort would be required.

Of course, the latter point could (would) be regarded as clear constitutional game-playing – especially as playing politics with a serious political issues such as energy and nuclear power would (rightly) play poorly in public.  But for the first two points above, a referendum may be a good idea – it would provide the public with a say on a key issue which will determine our energy future, and (if the public were opposed to new nuclear) it would strengthen the Scottish Parliament’s hand when dealing with Westminster on the issue.

Anyway, its just an idea.  But it seems like a logical one, since its what has happened in other places.  An idea – like so many of mine – which is unlikely to go anywhere though.