One of the odder elements of the current energy debate at present is that the political party that spends the most time talking about energy – that’s the SNP by the way – is strangely reluctant to chase the opportunities afforded by the imminent shale gas revolution. It’s a subject I consider in a column for The Scotsman today:
Scotland’s oil resources are a vital national asset. Everyone, I think, knows this. If there were no remaining oil reserves waiting to be exploited in the North Sea, the economic case for independence would be severely weakened. Oil is a cushion and a comfort blanket.
But the Nationalist’s determination to make it seem as though Scotland’s oil is just a useful garnish – the cherry on an economic ice cream sundae – paradoxically weakens their case for independence and, more damagingly still, makes them seem detached from reality. “Oil is the bonus” says Alex Salmond, implying that without oil there’d still be an economic case for independence robust enough to persuade a sceptical electorate. Even if this is true, it is an argument that the public simply does not believe.
The revelation that the Scottish government’s own economic advisors warned ministers that establishing a significant oil-based sovereign wealth fund would most probably be at the cost of reduced public spending, increased taxation or greater public sector borrowing can only strengthen the suspicion that too many of the SNP’s calculations and forecasts are based on wishful thinking. Oil, it turns out, might be more than just a nice little bonus.
Then again, the government’s energy preferences are often mystifying. The SNP’s enthusiasm for costly renewable energy contrasts with the government’s reluctance to embrace the opportunities for cheaper domestically-produced fuel in the form of shale gas. Wind and wave and tidal energy have a place in a balanced portfolio of energy production but it is quite evident that renewables alone are not enough. SNP ministers boast about Scotland being the “Saudi Arabia of renewable energy” but this is a comparison that, though typically self-aggrandising, scarcely compares like with like.
To put it simply, Saudi Arabia has a lot more oil than Scotland has wind. Moreover, the oil is worth much more than wind too. The SNP’s boast is like saying Rangers are the Real Madrid of lower-division Scottish football. It might be true but it doesn’t tell you very much that is actually useful.
[…] Which is where shale gas offers an opportunity, even a lifeline. Estimates of British shale gas deposits continue to be revised upwards. If even 10 per cent of those reserves can be extracted on a commercial basis Britain could meet its likely gas needs for the next century. Cheaper energy prices are not just a boon to consumers; they are a catalyst to wider economic growth. Fracking revenues could even contribute to an energy-based sovereign wealth fund.
So it is perplexing that the Scottish government is so hesitant about shale. We might expect the Green Party to take the same attitude towards shale as it does to oil – namely that reserves should be left unexploited – but it is surprising that the SNP seems equally reluctant to pursue the opportunities afforded by shale. Perhaps it fears embarrassment if shale marginalises the importance of renewables.
Whole thing here.
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