Disagreement Over Scotland’s Oil Wealth Fuels Independence Debate

By Andy Tully:

Scottish First Minister Alex Salmond continues to insist that the strong future of Scottish oil would provide major support for the country if it achieves independence from the United Kingdom — but not everyone agrees.

Scotland will hold a referendum on Sept. 18 to vote on the question of whether it should become an independent country.

Addressing the Scottish Parliament on Aug. 21, Salmond repeated predictions he has made before about the long-term strength of Scotland’s oil sector. Sir Ian Wood, founder of the multinational energy company Wood Group based in Aberdeen, argued that Salmond was exaggerating the country’s oil reserves by 60 percent.

Wood, who is the most influential figure in Scotland’s oil industry, warned against Scotland’s seceding from the UK and relying heavily on its oil reserves to go it alone. He contended that dwindling reserves will lead to serious problems in employment, public services and the economy as a whole by 2030.

That prompted Johann Lamont, the Labor Party leader, to ask, “Is Sir Ian Wood right or would the First Minister like to explain to him, our children and grandchildren why he is wrong?”

During the exchange, Salmond, leader of the Scottish National Party, maintained that Scotland’s reserves will yield between 15 billion and 16.5 billon barrels of oil through 2050, and that the annual amount could rise to 24 billion barrels after then if new oil deposits are discovered.

“Every other country in the world would give their eye teeth for such substantial resources,” he said.

But Lamont countered by saying if Scotland ends its 307-year-old association with the UK, Salmond “doesn’t have a Plan B on currency, he doesn’t have a Plan B on Europe and he doesn’t have a Plan B on oil,” adding, “The reason the people of Scotland don’t trust Mr. Salmond is because he is a man without a plan.”

Britain has said it will not share its pound with Scotland if it secedes. Salmond has said Scotland will integrate more fully with Continental Europe after secession, but the EU is cool to the idea.

Wood, who had previously portrayed himself as neutral in the Free Scotland movement, revealed himself as an opponent of Scottish independence in an interview with the energy website energyvoice.com. He has accused Salmond of exaggerating the value of North Sea oil reserves by as much as $3.32 billion a year and raised serious questions about Salmond’s plans to spend public revenues.

Salmond’s optimistic predictions have also been shot down by the British Geological Survey (BGS), which on June 30 said there is less oil trapped in the shale of Scotland’s Midland Valley than previous estimates – estimates Salmond had relied on to argue that Scotland can afford independence from the UK.

This piece is cross-posted from OilPrice.com with permission.