Security or insecurity of energy supply

Renewable generation in Scotland exceeded nuclear for the first time according to the latest government statistics. But this may not be as significant as some claim.

Wind and hydro power produced 10.3 terawatt-hours (TWh) of electricity in the first six months of this year. National Grid figures showed nuclear power stations generated 7.8TWh over the same period. In addition, 5.6TWh of electricity came from coal-fired power stations with a further 1.4TWh from gas-fired stations. Environmental campaigners described this as a “significant landmark”.

However, Paul Younger, professor of Energy Engineering at the University of Glasgow, said it was important to keep a sense of perspective. “It’s true that we’ve seen an increase in both the installed capacity and output of wind generation over the last year or so, but the 2013 closure of the coal-fired power station at Cockenzie and the downgrading of the gas-fired power station at Peterhead have had a much more dramatic effect on the percentage balance of generation sources. What we are seeing is a loss of capability in Scotland to generate on demand. Basically, nuclear generates steadily, 24/7 and we can increase generation from coal and gas as and when we need it. We desperately need not to lose sight of that. Otherwise, we will be relying on importing power from England, or else facing blackouts. That would bring a backlash against renewables which I do not want to see.”

Iain Macleod from Scientific Alliance Scotland makes similar points about the need for a balanced energy policy in his Scotsman article. He also makes the case for adequate control systems rather than relying on the market. He said:

“The negative effect of renewable energy on the risk that supply will not meet demand has to be considered on a system basis. Reliable technology exists that can be used to keep this risk at an acceptable level. But in order to do this, a central authority is needed to do the calculations and take action to ensure that the necessary generation capacity is made available. Market forces cannot be relied on to deliver a secure supply of electricity.”

Michael Meacher MP makes a similar point about market failure to secure supply, “The government’s answer to these setbacks is to launch a new system of what it calls “capacity payment auctions” which are effectively bribes to get the energy companies to invest. It exposes how helpless the government is in a privatised system where the companies hold back, knowing they’re in the driving seat, till the government makes an offer they can’t refuse.”

Despite security of supply warnings, the UK is in the top 10 for its energy security, but not in the top 10 for either sustainability or affordability of supplies and it has been placed on “negative watch” by the World Energy Council along with Japan, Germany and Italy.

WET’s Joan MacNaughton, said: “One of the things that’s important is the trend. Over the last three years there has been a downward trend in the performance of the UK. In particular, its energy security is down, it’s still just in the top 10, but it’s come down quite a lot since 2012. Affordability has worsened significantly. Clearly there are issues that the UK would want to look at, but it is one of only three countries that get a AAA rating so it’s still doing very well.”

Caroline Kuzemko from LSE takes the debate in a different direction by arguing that we are over obsessing about domestic energy supply. She says, “The idea that the UK’s energy supply is at risk has once again gained currency with the ongoing conflict in Ukraine. While the narrative that energy supplies are of strategic importance is regularly trotted out by UK corporate energy interests for their own gain.”

I will leave the final word to Dieter Helm, professor of energy policy at the University of Oxford. He says that it does not make economic sense for Scotland to be reliant on renewable energy, “Salmond has talked about 100 per cent renewables for Scotland. Well, it’s nonsense. Wind is intermittent by definition. You have to ask a very simple question: even if you wanted to do this, what are you going to do when the wind doesn’t blow? The truth is Scotland relies on baseload nuclear power, coal and gas to balance its system and it will have to for a very long time to come. Full stop.”

If we can be certain of one thing, this debate isn’t going to reach a ‘full stop’ anytime soon!


Just another fracking day

Since Dave Watson's blog on fracking and the powers of the Scottish Government to stop it, there have been a few developments that I thought were worth a short update.

Starting with the Smith Commission report that includes devolving onshore gas exploration. That removes any fig leaf the Scottish Government may have been clinging to on powers to regulate the exploitation of unconventional gas or fracking. As Dave pointed out, they already have the planning powers to stop fracking, but there is little evidence that they want to. Ineos would not be be buying up licences like a Tesco Black Friday sale, if they though the Scottish Government was going to stop them drilling in the central belt.

On the safety front the Guardian covered a report produced by the government’s chief scientific adviser that fracking carries potential risks on a par with those from thalidomide, tobacco and asbestos. The flagship annual report by the UK’s chief scientist, Mark Walport, argues that history holds many examples of innovations that were adopted hastily and later had serious negative environmental and health impacts. The residents of Falkirk and the surrounding areas have probably already worked that one out!

A similar view on the health impact comes from a large amount of health impact data from the USA summarised by a Correspondent in The Lancet. Recent studies from the USA before, during, and after fracking have suggested an increased risk of adverse health events, such as congenital heart defects, and low Apgar scores – the very first test given to a new born child – in individuals living close to natural gas development (within a radius of 10 miles).

One major peer reviewed study in rural Colorado calculated natural gas well counts within a 10-mile radius of maternal residences to estimate maternal exposure to natural gas developments. The study found “an association between density and proximity of natural gas wells within a 10-mile radius of maternal residence and prevalence of congenital heart disease and possibly neural tube defects.”

Some bad news for taxpayers who are likely to have to fund hundreds of boreholes across Britain to try to persuade the public that a looming shale gas boom can be developed safely. Sensors in the boreholes would detect possible water pollution or earthquakes caused by fracking and the information would be made public. “We will be taking the pulse of the sub-surface environment and will reveal if things are going wrong, but also if they are going right,” said Professor Mike Stephenson, director of science and technology at the British Geological Survey, which would drill the boreholes. “The aim is to reassure people that we can manage the sub-surface safely.”

The plan, called the energy security and innovation observing system, will cost taxpayers £60m-£80m. It is awaiting final approval from BIS where energy minister Matthew Hancock, a fracking enthusiast, holds another ministerial post.

So, powers in place, safety fears not resolved and the taxpayer to pick up the bill. Just another day in the search for a energy source we simply don't need.



Coalition against Ineos fracking plans

Fracking is back in the news with the announcement that Ineos, the owners of the Grangemouth plant, has £640 million plans for shale gas exploration and appraisal. It already has two licences for extracting from under the ground near its Grangemouth refinery, but is applying for more in Scotland and the north of England.

Ineos is facing strong community protests on the grounds that the techniques are unproven and risky. Others argue that Scotland should be focusing on clean energy rather than fossil fuels.

A coalition led by Concerned Communities of Falkirk (CCoF) and Friends Of The Earth Scotland, including the trade union UNISON, are demanding a moratorium on unconventional gas development in Scotland, saying risks to public health, staff and the environment are “impossible to regulate away.”

Labour's shadow energy minister Tom Greatrex, said: “Shale gas extraction cannot go ahead unless we have a system of robust environmental regulation and comprehensive inspection.” He also accused the Coalition Government of sidelining legitimate environmental concerns.

Top scientists have also warned that fracking will not stop ­climate change and could lead to 11% higher greenhouse gas emissions by 2050. They identify a possible scenario that the boom in shale gas may have no effect on carbon dioxide pouring into the atmosphere over the long term. Five computer models assessing the impact on global warming projected that, despite natural gas consumption increasing by up to 170 per cent by 2050, changes in CO2 emissions would range from a 2 per cent reduction to an 11 per cent increase.

Ineos is offering the prospect of cash for land owners and communities. In addition they are banking on the Scottish Government not opposing the exploitation of unconventional gas. It looks as if they might get their way because the Scottish Government has avoided opposing this extraction in principle. They have sought to distract attention from this position by campaigning for devolution of the reserved powers over exploration. Ineos might attract more support if they had better industrial relations and paid their taxes in the UK rather than dodging them by registering in Switzerland

A Survation poll commissioned by the Scottish Greens, found 66.1 per cent said controls on shale oil and gas exploration should come to Scotland, with 18.2 per cent believing they should stay with the UK Government. Many submissions to the Smith Commission have also argued for this

So while there is a consensus on devolution, the Scottish Government already has planning powers that could end the prospect of fracking in Scotland now. They have used these powers to stop new nuclear power stations, but not fracking. Simply put, Ineos are making this level of investment because they are confident that the Scottish Government is not going to stand in their way.



Diversifying energy ownership needs a more radical approach

Community energy provides an opportunity to diversify Scotland’s energy ownership from the dominance of big energy companies. The Scottish Government has published a Community Energy Statement that sets out the measures they are taking to encourage the development of community energy.

The Scottish Government’s ambition for community energy is that it provides an opportunity to spread the benefits of the rich energy resource with which Scotland is blessed. Support for community projects reflects their importance in empowering communities to take control of their own destiny and make the most of their own local resources.

Community energy covers a spectrum of activity – from direct ownership of energy assets, through joint ventures to community benefits payments. These enable communities to take a stake in the full range of heat and electricity generating technologies, from onshore wind, to solar PV and solar thermal, hydro, biomass and heat pumps.

community energy

The ambition is to see a fairly modest 500 MW of renewables in community and local ownership by 2020. This has been independently estimated to create some £2.2 billion over the operational lifetime of those projects. There is already 285 MW operating in 2013, including 43 MW of community energy. Most benefit comes from community benefit payments made by commercial developers. In the past 12 months this amounts to about £6 million from over 3 GW of (mainly) onshore wind schemes. While the cash is no doubt welcome to the communities concerned, this is not community ownership.

Support for community energy is currently delivered through the Community and Renewable Energy Scheme (CARES) delivered by Local Energy Scotland, and the Renewable Energy Investment Fund (REIF) delivered by Scottish Investment Bank. These schemes provide funding and technical support. While these initiatives are welcome, fully functioning direct ownership is limited to small scale, mostly rural hydro and wind farms.

Continuing down this path is unlikely to deliver a radical change in energy ownership in Scotland. There are substantial barriers to this form of community ownership as the Statement recognises. Not the least of which is the UK government’s volatile energy policy. Long term investment in energy needs a stable pricing regime. Another is the speed of connection to the grid, something that other European countries accelerate through public ownership of the grid.

Experience from Europe indicates that to make serious steps in diversifying ownership requires new public sector entrants to the market, primarily local authorities, although Scottish Water could also be a bigger player. The Statement recognises that the formation of Local Authority Energy Supply Companies (ESCOs) may be an opportunity to improve competition and offer a wider range of tariffs. CARES support has recently been awarded to Comhairle nan Eilean Siar to explore the potential to establish an Outer Hebrides Energy Supply Company (ESCO), which could enter the UK electricity market in 2016-2017 retailing green Hebridean electricity to local and export markets.

The next big step requires new municipal entrants to the energy market in urban areas. Cities should be engaging in the energy supply market where this can support efforts to tackle energy affordability and promote local generation. The Institute for Public Policy Research paper ‘City Energy, A new Powerhouse for Britain’, July 2014 showed one way forward.

This Scottish Government Statement is a reasonable description of the relatively small scale efforts made to date to encourage community energy ownership. However, the ambition is modest, lacking proposals to seriously diversify ownership in Scotland. The next big step requires support for local authorities to return to their 19th century role as an energy provider. They can do this on their own or in partnership with cooperatives. This model brings significant benefits to communities across Europe with lower energy prices and income generation for public services. I set out this approach in more detail in the energy chapter of the Red Paper on Scotland.

For all the words in this latest publication, the reader is left with the overwhelming impression that the Scottish Government is not in the business of taking on the big energy companies. As they have not been over energy retail prices. A few rural wind farms in community ownership is not going to make the radical diversification we really need.

Renewables round up

Our latest renewables round shows plenty of new potential, but still some concerns that the overall strategy may not be deliverable.

The case for renewables is set out, with much enthusiasm, in this FoE blog post at Left Foot Forward, “Energy security, jobs and carbon reduction. All in one. And since the sun and the wind will remain free as the technology to harness them improves, the potential for cost reduction is almost limitless. The countries which grasp this the quickest will be the winners in the 21st century, just as those who first piled into coal and steam were in the past.”

If you are sceptical about decentralised power, what about the Saharan sun? Up to 2.5 million British homes could be powered by Tunisian sunshine by 2018 under an £8bn plan to build a giant solar farm in the Sahara desert and ship the electricity to Europe through a 450km (280 miles) submarine cable. Solar power could outstrip fossil fuels, other renewables and nuclear to be the biggest source of electricity by mid-century, according to the International Energy Agency.

Germany is the new model for the renewables industry. They are well on the way towards having a predominantly green electricity supply. The transition from nuclear and fossil fuel electricity to using renewables is happening faster than anyone had anticipated. However, it is hugely expensive largely because the weather is notoriously unreliable and variable. So a secure system needs more renewable capacity and also more reserve capacity from conventional power plants (mainly fuelled by natural gas) to make sure it can always meet demand. As the chart below indicates, installed renewable capacity in 2050 is expected to be 180GW, which is roughly twice maximum demand.

german power

One indicator is that electricity tariffs have almost doubled since 2000. Meanwhile CO2 emissions have not decreased, but actually increased over the last few years because coal-fired power has been on the rise while nuclear wanes. German technology might not hack it this time.

Can renewables really provide all of Scotland’s needs?

scot energy sources

Scottish ministers have approved four major offshore wind farms that it is claimed could generate enough electricity for more than half of the homes in Scotland. On windy days of course. This seems fine on a day like today, but its not always like that. The Longannet announcement and problems at Hunterston, highlight some security of supply challenges. Others argue that the UK government is strangling offshore wind through the Electricity Market Reform plans. UK government estimates of expected offshore wind generation by 2020 have gone from 18 GW in 2012 down to just 10 GW.

Marine renewables have had something of a boost with the announcement that the developers of a planned tidal energy scheme in the Pentland Firth have signed a 10-year Power Purchase Agreement (PPA) with energy firm SmartestEnergy. Under the first phase of the project, four 1.5MW turbines will be installed on the seabed. MeyGen said eventually the scheme could have up to 269 turbines and it plans to start installing devices over the next two years.

Lets also not forget demand reduction. The Energy Saving Trust reminds us that households could save £356 million by making simple changes to their energy use. Around 594,000 tonnes of carbon emissions could be cut by minor improvements such as installing solar panels, switching to LED bulbs and switching appliances off rather than on standby.

So, plenty of potential projects, but questions of actual delivery and cost remain. We will also still need conventional power sources to balance the system. The phrase, all our eggs in one basket, still springs to mind.


The case for devolving energy policy to Scotland

Devolving energy policy would tidy up the often conflicting mix of devolved and reserved powers and enable Scotland to develop new approaches to energy policy.

At present energy is a largely reserved matter to Westminster. Specific reservations in Schedule 5 of the Scotland Act 1998 include the generation, transmission, distribution and supply of electricity; the ownership of, exploration for and exploitation of deposits of oil and natural gas; Coal, including its ownership and exploitation; Nuclear energy and nuclear installations. However, secondary legislation has devolved aspects of these powers including the Renewables Obligation in Scotland and consent for power stations greater than 50MW onshore and 1MW offshore.

Perhaps even more importantly, environmental legislation and planning are fully devolved matters. The Scottish Government has used these powers to set more ambitious targets for reducing greenhouse gas emissions by 42% by 2020 (UK target 34%); 50% of all electricity demand from renewables by 2020; and finally aims to decarbonise electricity demand by 2020. Most notably, the Scottish Government has used its planning powers to rule out new nuclear power stations, although supporting life extensions to existing capacity.

These conflicts have resulted in well publicised disagreements over issues like transmission charges that discriminate against Scottish generators; Electricity Market Reform (EMR), support for renewables and subsidies for nuclear power.

The Scottish Government believes that the Scottish Parliament should have greater responsibility for all energy policy and regulation, including all oil and gas. They argue this would deliver a streamlined approach and allow Scotland to design a regulatory and fiscal landscape which maximises the return from the energy sector, encouraging a sustainable industry for the benefit of the people of Scotland. This would include joint oversight of UK-wide bodies such as OFGEM, and an arrangement of shared competence in relation to the new Oil and Gas Authority proposed for Aberdeen.

With these additional responsibilities, it is argued that Scotland could also capitalise more fully on its comparative advantages in the energy field. The Scottish Government could advance community and local ownership of energy; and better address societal inequalities through tackling fuel poverty. The connection of the islands to the national grid could also be prioritised.

There is of course a certain irony in the Scottish Government’s position. In the referendum they claimed Scotland would remain part of the UK energy market, despite the obvious consequences for renewables. Scotland gets a third of the UK’s renewable support with less than a tenth of the population. The Scottish Government’s claim that the lights would go out in England without Scottish renewables, was simply not credible. The rest of the UK has a wide range of options, including new interconnectors to Europe and their capacity margins will be tightest when the wind isn’t blowing. So, intermittent Scottish renewables would be the wrong energy at the wrong time.

The UK Government position in the referendum was equally weak. They failed to properly address their management of capacity margins, the mess they have made of EMR, energy prices and the consequences for fuel poverty. Their green credentials are in tatters due to the malign interference of the Treasury in energy policy.

Devolution could well deliver the best of both worlds. Security of supply and support for renewables, as well the opportunity for Scotland to develop a distinct energy strategy. Instead of being a minor player pleading from the outside, Scotland could have a constitutional role in the UK energy market. There is also a potential gain at UK level, with Scotland able to play a positive role in developing a coherent energy policy, rather than just blaming Westminster. The recent problems at Hunterston and ScottishPower’s announcement on Longannet could mean the loss of 40% of Scotland’s generating capacity. A prospect that should shake the Scottish Government out of its own naive approach to energy generation.

Having powers is all very well, but the acid test is how you use them.

A Scottish energy policy should use our abundant renewable energy resources, within a balanced UK and Scottish energy system. A planned energy policy than relies less on the vagaries of the ‘kid on’ energy market and makes a real contribution to reducing greenhouse gas emissions. A formal role in regulation will support the necessary reform of the regulatory system, including transmission charges and retail prices. That links energy efficiency, price and welfare – the three elements that are needed to tackle fuel poverty. It can also link already devolved matters such as training and education to address the workforce skills gap. We set out these approaches in more detail in our policy paper Scotland’s Energy-Scotland’s Future’.

There are international precedents for devolving energy powers. For example, Greenland and the Faroe Islands have devolved energy powers within Denmark. In recent years there has been renewed interest in local generation with local government leading the way in countries like Germany. We need to break away from the big business model of energy that is concentrating wealth in the hands of foreign corporations. One of the strengths of devolution is the ability of smaller parts of the UK to try different approaches. Scotland could be radical and innovative, with the devolved powers and the political will to use them.

UNISON has long argued that energy policy should be devolved to Scotland. It would tidy up the current mismatch of powers that allows governments to stop developments rather than encouraging new approaches. The UK would benefit from the innovation and Scotland would take responsibility rather than looking to others. That looks like a win-win for everyone within these isles.


Shock to energy generation in Scotland

Big concerns over power generation in Scotland this week, with announcements on Longannet and Hunterston power stations.

Those who thought the transmission charges row had gone quiet while Ofgem prevaricates, got a shock this week when Scottish Power announced that Scotland’s largest power station at Longannet may be forced to close due to the huge sums it must pay to connect to the National Grid. It costs about £40m a year to keep Longannet connected to the national grid, while an equivalent power station in the south of England would receive a payment of £4m.

While these discriminatory charges continue, Scottish Power has decided not to enter the contest to supply energy generating capacity in 2018/19. This means financial changes are needed to avert the threat of closure of a plant that provides essential balancing power to the Scottish networks. It generates enough electricity each year to meet the needs of more than two million homes and unlike many renewables, is not dependent on the weather.

The second problem arose at the Hunterston B nuclear power station in North Ayrshire that generates around 15% of Scotland’s electricity. New cracks have been found in one of the reactors
with two of about 3,000 graphite bricks in the core of reactor four affected. The plant operator, EDF Energy, said the cracking was predicted to occur as the station aged and it would not affect the safe operation of the reactor.
While there is no immediate question of losing these important power stations, it does raise questions about the impact their closure would have on the system.

Paul Younger, professor of energy engineering at the University of Glasgow, said: “This is really turning the screws on Scotland’s vulnerability with baseload and dispatchable power. If you take Longannet and Hunterston both out of action that mean the loss of 40 per cent of all the electricity used in Scotland at a stroke.”

Scottish Conservative energy spokesman Murdo Fraser said: “There’s absolutely no suggestion of these cracks causing any safety or health issue, that’s been made absolutely clear by the owners. Any scaremongering to the contrary is unacceptable. But this issue does demonstrate that this is a power station approaching the end of its working life, having made an important contribution. Nuclear energy is an important asset for Scotland and that’s why the Scottish Government has to drop its opposition to new power stations”.

Concerns over generating capacity come when wholesale power prices in the UK market climbed steadily over the third quarter of this year due to supply concerns over European gas imports and nuclear availability. The Icis Power Index (IPI) climbed from lows of £46.373/MWh on 10 July to just over £52/MWh by the end of September due to the unexpected shutdown of almost 3GW of nuclear capacity ahead of winter. They said, “Energy companies are actively buying and selling electricity in the market right now for delivery over the next year, so any price rises on the wholesale market could affect what consumers pay later on.”

While there is no immediate crisis, these announcements should be a wake up call to governments and the regulator that plant closures will have a big impact on Scotland’s energy capacity.

Remember the Hydro Boys

On Thursday this week, the Scottish Parliament will debate a motion from Annabelle Ewing MSP that remembers the contribution of the workers, many displaced persons from post-war Europe, who built our hydro power system.

S4M-10672# Annabelle Ewing: Remembering the Contribution of Those who Built the Dams and Tunnels—That the Parliament notes plans by Scottish and Southern Energy to develop a new state-of-the-art visitor centre at Pitlochry Dam and salmon ladder; recognises the contribution that this and other hydroelectric dams and tunnels throughout Scotland can make as tourist attractions as well as their primary function contributing to Scotland’s renewable electricity generation; respects the contribution made by the men, of many nationalities, who built the dams and tunnels, such as the Lednock “Tunnel Tigers”, who set a world record by tunnelling 557 feet in seven days in 1955 while working on the St Fillans section of the Breadalbane Hydro-Electric scheme; further recognises that this was hard, dangerous work and that a number of men lost their lives and countless others experienced injury or illness that affected them for the rest of their lives; understands that some of the public visitor information boards list several nationalities of workers in the tunnels but make no reference to Irish workers, and looks forward to the new visitor centre properly reflecting the contributions of all of the men who built the dams and tunnels.

When most people remember the building of Scotland’s hydro schemes, they think of the vision of Tom Johnston who got the projects going, despite political and landowner opposition. However, it’s also a story about people, many of whom paid the price with their lives. Emma Wood’s book ‘The Hydro Boys’ tells the story well.

In this debate we should not forget the human sacrifice of those who built the hydro schemes that serve us to this day.

Utilities and the Referendum

What is probably the longest campaign in political history comes to a conclusion today. We haven’t declared for either side, primarily because we split fairly evenly on the issue and our Editor isn’t saying.

That doesn’t mean we haven’t got a view on the issues. Oil, or rather the amount and value of it has been a central feature of the campaign. Sadly, the utility issues that we focus on haven’t had the same prominence. Water didn’t even get a mention in the White Paper and we had to tease a response out of the Scottish Government. Energy markets are a complex issue and not well understood by the media and the public at large.

Some of the contributions have been very poor indeed, if not downright misleading. One example was a piece on the BBC last week, when a Green MSP said vote Yes to stop us subsidising English nuclear. In the very next segment, the First Minister said if we vote Yes we will remain in the UK energy market. This of course means we will continue to subsidise English nuclear, just as the English consumer will subsidise Scottish renewables. A lot of our colleagues expressed their irritation with this nonsense, but the journalist who put the piece together clearly didn’t understand the contradiction.

While even those of us who are voting Yes would admit the energy case is weak, some of the UK analysis has also been poor. The UK government paper ignored their failure to properly address the capacity margins across the UK. Energy Market Reform has been badly planned and the Treasury interference in energy policy has been a malign influence on the development of a credible policy. Even those of us voting No, accept that the UK Government’s green credentials are in shatters and we all feel strongly that climate change, as the greatest threat to the planet, is being downgraded by Westminster.

In conclusion, we doubt if anyone was swayed one way or the other on utilities issues. While disappointed, we are not surprised. One of the reasons we established this site was to address the paucity of analysis in our sector. We hope our contribution to the debate was helpful.

Oil numbers and the referendum

As we approach the final week of the Scottish independence referendum, claims and counterclaims come fast and furious – hard data and credible analysis is in shorter supply!

For example, an independence supporting firm claims there is a new oil bonanza in the North Sea through the use of fracking. The extra reserves could apparently yield an additional wholesale value of £1 trillion to £2 trillion depending on oil prices. However, Dr Gordon Hughes, professor of economics at the University of Edinburgh, dismissed the report as “pure guesswork”. He added: “The question, which this report largely ignores, is whether or not it is economic to develop them. This game of trying to calculate Scotland’s oil and gas reserves has become almost a pointless exercise.”

Estimates on oil reserves and oil prices have been a key battleground in the referendum campaign. The problem for voters is that no one can give them a credible estimate of either. The Scottish Government uses highly optimistic assumptions on oil prices and the UK, or the OBR, use more pessimistic assumptions. The difference between these numbers is what pays, or doesn’t, for our schools and hospitals. The irony is that both estimates have been proved to be optimistic in the past.

You would have thought oil reserves would be easier to calculate. After all it’s a measurable commodity unlike prices that can fluctuate. However, we have a range of different numbers for voters to pick from. Oil magnate Sir Ian Wood suggests that remaining oil and gas reserves are about 16 billion barrels oil equivalent (boe). While industry representative Oil and Gas UK suggest a figure of 24 billion boe. As Ewan Mearns discusses in some detail, both of these numbers as they stand alone are totally meaningless. It’s not physical reserves we should be concerned about, but those reserves that are economically viable to extract. He concludes by saying:

“The focus on ethereal reserves is a mistake, the focus on direct tax income is a mistake. The focus should be on the continued existence of a multi-billion £ industry that provides jobs and prosperity for many and a single minded focus on doing nothing that may jeopardise the present or the future.”

This shouldn’t be good news for Yes vote backers the Green Party and quite a few environmentalists. As Peter Jones mischievously put it in today’s Scotsman, “It is becoming increasingly clear that if there is to be a boost, or more realistically a maintenance, of living standards, Scotland will need to produce every last ounce of oil and gas. Yet if we do that, we will also be helping planet-wrecking climate change.”

While the latest polls have at least woken up the rest of the UK to the debate in Scotland, they at least don’t have to make this difficult decision based on limited credible data. As the author Carol Craig put it in a thoughtful essay today, “If the No side is Project Fear then, for the most part, Yes is Project Pollyanna”.


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