By Keith Aitken in Edinburgh | 24 February 2014
Both the Scottish and UK Cabinets are meeting in Aberdeenshire today to pitch their case for the future of the North Sea oil and gas industry after September’s independence referendum.
Meeting this morning at Portlethen, six miles from Aberdeen, the Scottish Cabinet culminated in the announcement by First Minister Alex Salmond of a £10.6m Oil & Gas Innovation Centre in Aberdeen. This would pioneer new energy technologies and is a reaffirmation of the Scottish Government’s previous promise to divert oil revenues into a Norway-style Oil Fund if Scotland gains its independence.
Meanwhile, the UK Cabinet meets in Aberdeen this afternoon, where it will confirm UK government backing for the regulatory structure proposed in by industry veteran Sir Ian Wood, aimed at prolonging the North Sea exploitation and accessing an extra £200bn of reserves over the next 20 years.
Energy Secretary Ed Davey is also expected to green light the next stage of development for the world’s first full-scale carbon capture and storage plant at nearby Peterhead.
It is only the third time in almost a century that the UK Cabinet has met in Scotland, having previously been brought north by Gordon Brown and David Lloyd George. The Scottish Cabinet, by contrast, regularly holds meetings around the country.
The effect of the two meetings was to offer rival visions for a key industry ahead of the independence referendum on September 18. The UK government has argued that oil price volatility would make it a high-risk revenue dependency for an independent Scotland, whereas the UK has the financial ‘broad shoulders’ to ride out fluctuations in revenues and ensure continuity of investment.
By contrast, the Scottish Government argues that Norway, a smaller country than Scotland, has both coped perfectly well with price instability and set aside a $460bn sovereign oil fund to keep the benefits flowing to its people after the oil eventually runs out, whereas the UK has frittered away revenues on funding mass unemployment as a by-product of economic restructuring.
‘It hasn't been so much the broad shoulders of Westminster as the vast cavern in the Treasury over the last 40 years where they've accumulated massive oil and gas revenues from Scotland,’ Salmond said today.
‘The reason they want to hang on to Scotland's resources is that they've done so well out of them over the last 40 years. I think the next 40 years should be Scotland's turn.’
But, speaking ahead of the UK Cabinet meeting, Scottish Secretary Alistair Carmichael said: ‘As a United Kingdom we can share the challenges that peaks and troughs [in oil prices] present.’
Meanwhile, a survey for an offshore jobs agency of more than 1,000 Scots working in the oil and gas industries has found that more than 70% planned to vote Yes in the referendum. But a separate survey of 5,000 offshore workers found that nearly 90% were worried that uncertainty over the referendum outcome was undermining investment confidence.
