Oil and trouble

Oil has yet again spilled out onto the independence debate, following an open letter from Danny Alexander to Alex Salmond, in which he accuses the Scottish Government of “making plans based on untold oil wealth beyond anything independent forecasters consider plausible”.

Alexander said that Scotland benefits from UK investment in the industry and that the SNP’s projections misrepresent an independent Scotland’s fiscal position.

Salmond responded – in language somewhat more assertive than you would expect from a pen-pal – disputing Alexander’s figures and asserting that the industry has been “neglected and undermined” by successive Westminster Governments.

These letters tell us two things.

First – both Salmond and Alexander retain a quaint, almost touching attachment to writing letters. In an era dominated by instant communications, who would have thought the referendum debate would be conducted along the lines of Jane Austen-style courting?

Secondly – oil has by no means drifted down the list of debate points.

Speaking in March, John Swinney said: “If we pursue the policies that only an independent Scotland will be able to pursue then we can deliver an oil fund from the point of independence and secure an economic bonus that can only be delivered by independence.

“The Norwegian Oil Fund began in the mid-1990s with only modest payments and is now the world’s largest sovereign wealth fund, worth more than £500bn – while Scotland’s oil fund stands at zero, as a result of Westminster mismanagement of our resources.”

The SNP is framing the issue as though Westminster got drunk on power, went on a forty year binge with a wallet full of oil revenues, and woke up with nothing to show for it.

The hangover has now descended, bringing with it a sense of highly critical hindsight. Waking up with a half eaten kebab is one thing, but realising you blew billions on a submarine-based nuclear deterrent is quite another.

The oil fund argument is problematic though, since the SNP is basically saying that given the chance, it would have spent less and saved more.

There is no fundamental problem with that idea, it is just that cutting public spending in order to save for the future sounds an awful lot like austerity.

And by looking at the issue retrospectively the SNP has avoided specifying which areas of public spending they would cut – and unless it is just Trident this would presumably have involved some difficult choices.

But if there is no point crying over split milk – or wasted oil revenues – the future is no clearer than the past.

Both the SNP and Labour have stated that their plan is to extract every last drop of oil from the North Sea. They have also both committed to cutting emissions.

This is despite warnings from the International Energy Agency that one third of the world’s oil must remain in the ground if humanity is to avoid the most catastrophic effects of a warming planet.

Only the Greens have escaped the Parliament’s collective cognitive dissonance and argued that some oil must be left untapped.

As co-convener of the Scottish Greens and Green Yes campaigner Councillor Maggie Chapman said: “Fully exploiting oil is simply not compatible with the carbon budget we cannot afford to breach.”

Environmentalists will argue that while Salmond and Alexander continue their correspondences, the planet is still warming, and debates over future oil revenues are irrelevant if the stuff cannot be extracted.

But like any other fuel for debate in the referendum campaign, the oil issue will burn on.