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SNP joins with Greens — putting Scotland’s oil and gas industry into question

Can an independent Scotland really go green?

By Ricky Browne

As much of the world is concerned about the pandemic and the scenes of chaos coming out of Afghanistan, a new political move in Scotland might bring into question one of the main platforms for its independence movement.

Politics makes strange bedfellows, they say. But the SNP was one seat short of a majority in the Scottish parliament, and despite many points of disagreement, both parties want independence for Scotland.

There is, however, at least one fly in the ointment. The SNP has always said that Scotland could afford to go it alone thanks to oil fields in the North Sea, which it believes it would have the right to.

But today the SNP has announced a power-sharing agreement with the Green Party – who are strictly against carbon-based fuels.

The agreement gives the SNP at least the appearance of having a majority government, which it probably believes will help it increase the pressure on Westminster to call a new independence referendum.

How though, would Scotland be able to have a strong economy without oil?

A cloud hangs over Scotland’s oil and gas industry

Chief Minister Nicola Sturgeon has tried to kick that can down the road, by saying that it doesn’t have the authority to do anything about oil. It says those decisions are made only by Westminster.

The Scottish Daily Record reported today that when Sturgeon was asked whether this was the beginning of the end of the oil and gas sector, she said: “We are in a transition away from fossil fuels, the world has to be in a transition away from fossil fuels.

“I want to see the skills, the infrastructure, the expertise that has built up over decades in the north east of Scotland and North Sea transferred to building up that same infrastructure in what we need in renewable energy.”

It’s a bid of a conundrum – because it appears that SNP would now like to hitch its wagon to the star of combatting climate change – something that the UK as a whole has become a global leader in.

In fact the UK will be hosting the  COP26 climate conference in Glasgow in a few months – so it may help Scotland’s international image by appearing to be a strong advocate of green energy.

Scottish Green Party co-leaders Patrick Harvie and Lorna Slater describe the deal as ‘an historic moment’ Photo: PA Media

But it does raise the whole question of how Scotland could support itself as an independent state without the oil industry.

According to the Scottish Government website gov.scot, “Our energy strategy shows that oil and gas are vital to Scotland, accounting for around 90% of the country’s total primary energy in 2015. We see the sector a key component of our economy and remains integral to a sustainable, secure and inclusive energy transition. As part of the September 2019 Programme for Government the Scottish Government confirmed that support for oil and gas exploration and production in the North Sea will now be conditional on the oil and gas sector’s actions to help ensure a sustainable energy transition.’

Clearly the quick agreement between the Scottish government and the Green Party didn’t give gov.scot enough time to review its position.

On a section titled “Benefits to the economy” gov.scot says: “The oil and gas sector is vital to both the UK and Scottish economies. Oil and gas extraction alone was worth an estimated £8.8 billion in GVA to Scotland’s economy in 2019, representing 5% of total Scottish GDP.

“More than 44 billion barrels of oil equivalent (boe) have been extracted from the UK Continental Shelf since the 1970s, and industry regulator the Oil and Gas Authority estimates that up to 20 billion boe can still be recovered.”

So the Scottish economy would potentially lose about £9 billion pounds per year without oil.

One reason that the SNP supported remaining with the EU was that it believed the Scottish economy could shrink by £1 billion. So one would imagine it would be even more concerned over the loss of £9 billion.

The deal with the Greens gives SNP a stronger position in Holyrood

The document goes on: “The oil and gas sector is also a major source of tax revenues and has provided over £330 billion in revenues (2019 prices) to the UK Government from production taxation alone”. Presumably some of those revenues go to Scotland.

But the sector also employs an immense amount of people.

“The sector is also a major employer, estimated to support around 100,000 jobs in Scotland in 2018 through direct, indirect and induced impacts.”

Scotland has a population of about 5.5 million people.

So, without oil and gas, the Scottish economy would lose 100,000 jobs – and as an independent state would not be able to fill that gap with funds from Westminster.

Another reason that the SNP wanted to remain in the EU, was that it believed that leaving it would result in unemployment rising by about 100,000 people.

“An economic slowdown would be expected to result in the rate of unemployment increasing to between 5.5% – 8%, from current the current rate of below 4%. The top end of this rate would be equivalent to unemployment rising by around 100,000,” reads a quote from gov.scot, talking about what would happen if Scotland left the EU.

Maybe, if Scotland was successful in joining the European Union, it could receive funds from Brussels instead. But would the EU be in a rush to admit a country with a failing economy – especially given that some states, such as Spain, would not want to give succour to their own independence movements.

So it’s a delicate balancing act. With this pseudo-coalition, the SNP can now more forcefully claim for an independence referendum. But it the SNP is now against the oil and gas industry, it will risk losing a lot of votes, just when it needs as many votes as possible to win a referendum.

If Scotland wants to combat climate change by moving away from oil and gas production, how will the economy survive without support from the UK government – unless it can assure that it will be able to join the EU and get assistance from there?

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