Economic Warning from the Archives
The BBC reported today what could be regarded as little more than a political historic curiosity but when considered against the situation we find ourselves in now makes an interesting point. Previously secret governments papers, released under the 30-year rule illustrate the then concern within government for a devolved and potentially independent Scotland. Such independence would limit the financial benefit to the rest of Britain from the recently discovered North Sea oil, most of which lies in Scottish territorial waters.
The BBC article writes:
The 1970s documents warned that if devolution increased calls for independence, the loss of oil income might leave the UK virtually bankrupt.
The interesting point here is that 30 years ago government was seriously worried about the economic ramifications of losing North Sea oil to the Scots. Today we again face losing North Sea oil and the revenue it brings to the country, not to the Scottish this time but to geological depletion.
The rate of extraction of North Sea oil peaked at 3.1 million barrels per day in 1999 and has since fallen below 2 mbpd with similar rates of decline expected to continue. North Sea gas extraction is also falling having peaked in 2000.
Oil Market Reports
This decline is a double whammy, not only is the income from the oil and gas threatened (current high prices cannot continue to offset depletion much longer) but the UK has recently become a net importer of expensive oil and gas so whilst extraction is falling import costs to meet demand are rising.
One wonders what is being written today in secret government papers only to be discovered in 2036 about the current dangers associated with North Sea depletion, nuclear decommission and emissions driven closure of aging coal fired infrastructure.
This post was written by Chris Vernon
This entry was posted on Monday, January 30th, 2006 at 7:20 pm and is filed under Hydrocarbon Depletion, Economy, Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
February 4th, 2006 at 7:59 am
I think what rings clear is “little time left to enjoy the material binge”. I’ll give the UK this they did a FANTASTIC job depleting the energy Mother Nature gave them!
United States President George Walker Bush, in his most recent State of the Union address on 2006 January 31, finally announced it publicly and officially, albeit discretely: America is now on the verge of decline, if not collapse. He revealed it in two oblique but very clear sentences. The first: “America is addicted to oil, which is often imported from unstable parts of the world.” Now …its about time for Phony Blair to do the same.
By 2036….OMG..I would be worried if you’ll get through the next decade..Worry about that first!
February 6th, 2006 at 11:46 pm
I remeber a leading article in the Engineer circa 1978/9 which forecast the depeletion and laid out a 30 year panorama pf exploitation … an MD I knew had it pinned to his own office noticeboard for many years. I seem to remeber it quoted the head of BP warning about the short term benefits.
No doubt the Engineer could find it if asked.
April 19th, 2007 at 7:59 pm
One year on things do not look any better. Exploration is still taking place in the Northb Sea but on a much smaller scale and with no real prospects of large scale finds. Modern techniques allow more marginal fields to be developed but there is a shortage of drilling rigs (most of the rigs are chasing more lucrative contracts elsewhere). I believe there is still a 30 year life in the North Sea but at a much reduced output.