Implementing Wood review urgent to unlock more oil and gas
Sir Ian Wood has published the final version of his review of how to maximise recovery from the UK Continental Shelf. This is a vitally important document, commissioned by Energy and Climate Change Secretary Ed Davey.
The key and surprising recommendation is for a new development strategy for our oil and gas resources, backed up by a new regulator to co-ordinate the work of government departments and industry operators, to maximise opportunities and efficient use and joint development of infrastructure.
If it works, Sir Ian estimates that 3 to 4 billion additional barrels of hydrocarbons could be produced that may otherwise be lost. This could be worth £200 billion.
In a mature province such as the UK, future discoveries are likely to be smaller and more difficult and costly to produce. If each field had to fund its development on a stand-alone basis with its own infrastructure many would prove uneconomic. Joined to other producing assets in the same area the economics could be positively transformed.
Activity and investment is currently very high but the forward picture is less rosy. After an ill-thought through initial budget, the coalition government has engaged constructively with the industry to offer tax incentives that have unlocked a number of fields for development.
If the Government is to offer further tax deals to secure development as it must, it is entitled to require the industry to work together to reduce costs to mutual advantage. Sir Ian’s review points the way. I will be pressing for early implementation.
Ten myths offered by the Yes campaign
Although I find the majority of constituents I talk to are strongly opposed to the break-up of the UK, with five months yet to go nobody can safely predict the outcome. Certainly the Yes campaign is offering a glib and easy agenda that ignores the real difficulties that would flow from breaking up a sophisticated three-hundred-year union.
So let us consider just some of the myths of the pro-independence camp.
1. We will have a currency union with the rest of the UK. Such a union is neither in Scotland’s interests nor those of the rest of the UK. It won’t happen.
2. Scotland would simply become, on independence, a full member of the European Union. Yet the highest authorities within the EU have made it clear that Scotland will have to apply and negotiate its own conditions.
3. Scotland would not lose influence in the world. In reality Scotland would no longer have a permanent seat on the Security Council, director of the World Bank and IMF or major nation status within the EU nor access to the UK’s prestigious embassies.
4. We would still have the BBC. Well, like anyone else in the world Scotland could buy the BBC’s output but we would no longer be part of its world class network.
5. Our universities would still be able to receive research funding from UK Research Councils. This is simply false.
6. Our pensions would continue to have the same costs and guarantees as under the current UK arrangements. This is simply not the case.
7. The UK will go on buying our renewable energy on the same terms as presently. More likely they will seek to promote their own and possibly substitute Scottish fossil fuels with English gas.
8. We can be part of NATO but opt out of the nuclear component. Even if that is the case, there would be a cost attached and we would have an obligation to maintain defence spending at 2 per cent of GDP – meaning that there are no savings from opting out of Trident.
9. All of the SNP’s promises can be achieved without any increases in taxation - all funded by North Sea tax revenues. However these are volatile, falling and not enough – especially if corporation tax, air passenger duty and other taxes are to be cut and welfare savings reversed.
10.The rest of the UK, the EU and the wider world will greet a Yes vote with calm indifference and agree to all the assertions the SNP made without demur or counter bids and in a spirit of unqualified goodwill within 18 months. No.
In short, voting Yes can lead to a whole raft of unforeseen and unforeseeable consequences which might lead to a severe backlash when people learn the inconvenient truth.