Just where does the SNP stand on energy?

Written by on 23 March 2013 in Feature

The energy debate has always been a central flagstone in the argument for independence

Oil has been vital to the SNP’s make-up since it was discovered in the 1970s. The slogan ‘It’s Scotland’s Oil’ propelled the party to its best ever performance in a Westminster election – winning 11 seats.

Since then, it has continued to ask the question ‘how is it that a country with such a rich energy resource on its doorstep, has areas of such poverty?’ and First Minister Alex Salmond has previously called the treatment of Scotland’s resources as “probably the greatest act of international larceny since the Spanish stole the Inca gold”.

Now with the emergence of greener technology and the clamour to act on climate change, the party’s energy policy has become a two-pronged attack; while playing up the benefits of exploiting the still healthy reserves left in the North Sea, it is also putting the country forward as a world leader on renewable energy.

The two issues make at times complicated bedfellows and – as energy becomes a central part of the independence debate – it has led to pelters from opponents on both fronts.

Oil, for the SNP, still underpins the economic case for survival outside the Union. The success of Aberdeen and the major international companies who have their headquarters there are why the Nationalists believe the country will not suffer when/if it separates from the UK.

While most parties would back the traditional oil and gas industries and their contribution to the economy, the claims as to whether they can support an independent Scotland have proved to be a tower that seems to invite being knocked down.

A leaked document from Finance Secretary John Swinney to other cabinet members, which warned that there was a high degree of uncertainty around North Sea revenues, was seized upon by the Unionist Better Together Campaign.

Alistair Darling, the Labour MP who leads Better Together, told Holyrood that: “An independent Scotland would be heavily dependent on North Sea oil, which is very volatile and of course in the long run it will run out. I don’t think the Nationalists are doing themselves any favours, and we have found that in private, they know full well that this will mean some pretty difficult choices for Scotland over the next few years.”

A week after the leak, the Scottish Government released a new analysis document which estimated the industry could generate between £41bn and £51bn in tax revenue by 2017/18 – and it was hailed as a new “oil boom” by the First Minister.

The new analysis was dismissed by other parties, with Labour’s Johann Lamont and Tory Ruth Davidson rounding on Salmond in First Minister’s Questions, claiming the figures had been invented “from nowhere” and the promises were “a fantasy”.

This uncertainty over oil prices was repeated by the Office for Budget Responsibility as it set out revised forecasts on the same day as Chancellor George Osborne’s Budget, predicting that oil revenue from the North Sea would fall from £6.5bn to £4.3bn between the current financial year and 2017/18.

It predicts a fall from $113 to $93 per barrel between 2013 and 2017 and says gas prices are likely to follow a similar path.

However, the Scottish Government has said the OBR predictions are overly pessimistic about analysis and Salmond himself said: “It is also clear that a wide range of credible forecasters expect oil prices to remain close to present levels – with some organisations, such as the OECD, suggesting that prices could exceed $150-a-barrel by 2020.

“Even with a cautious estimate of prices remaining at $113 a barrel being used, it’s clear that Scottish oil and gas could generate more revenues than has previously been assumed.”

Oil supplies are a finite resource and while exploration still continues and with technology and smaller firms more willing to take a smaller return it means there is still a vast potential amount to be extracted – however, it will still eventually run out.

So what of the SNP’s other energy policy – planning for a cleaner, greener Scotland, weaned off fossil fuels and powered by renewable energy – as it tries to cut carbon emissions dramatically?

This too has had its critics.

True, the SNP’s policy on the controversial process of ‘fracking’ to extract shale gas is much less supportive than the Westminster Government – where George Osborne has announced tax breaks in support of more gas exploration – and the future of nuclear would seem to be dying out as the Government has a policy of no new atomic power stations.

And latest research launched at the Scottish Renewables conference in Edinburgh also showed a majority of people are supportive of using renewable energy sources. The current government policy is the ambitious aim to provide the equivalent of 100 per cent of its electricity from renewable sources by 2020.

But doubts have been cast on whether this policy could survive after independence.

Ed Davey, the UK’s Energy and Climate Change Secretary, was in Edinburgh this month to address members of the renewables industry and he warned that the renewables plans would not be so certain under independence.

He told Holyrood: “I think energy is one of the prime reasons why I hope that Scottish people will vote No and reject independence because there’s no doubt Scotland is stronger in the UK and the UK is stronger with Scotland in it.

“At the moment the cost of renewables is spread across the whole of the United Kingdom. With independence, the cost of supporting Scottish renewables would be spread across a much smaller base.

“Of course Scotland would want to export its renewable energy and I think it’s highly likely that England, Wales and Northern Ireland would want to buy some of it, but our consideration of that would be in a different context. If it was an independent state, we would have to consider energy imports from Scotland in the way we would from any other country.

If I wasn’t Secretary of State for Energy and Climate Change with responsibility for energy and climate change in Scotland, then that wouldn’t be my first priority – constitutionally.”

Salmond too has thrown down the gauntlet to the UK Government by committing Scotland to a target to decarbonise the economy by 2030 – the UK Energy Bill includes an aim to have this introduced by 2016 – not immediately.

However, Davey said: “The SNP is a follower not a leader on decarbonisation targets. As Secretary of State I got it into the Energy Bill and negotiated with Conservative colleagues, it’s now in the Energy Bill and after we put it in the Energy Bill then we heard from the SNP.

“The issue that people are getting worked up about is whether we set it in 2014 or 2016. We’re the first government in the world to give ourselves the legal power to do that and I’m very proud that we’ve got that in legislation.

Alex Salmond’s proposal is very unlikely it could be delivered before 2016 – that would require him winning the referendum in the first place – so I think he’s making a false promise there.”

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