Federlism/FFA/FFR

[bowmore]

Ah, so the BBC is a credible source now, great.

[FuzzyAffro]

Oil and Gas UK gave those figures, the BBC just reported them.

[bowmore]

Oil and Gas UK gave those figures, the BBC just reported them.

Yeah but you did just quote them, like.

[bowmore]

This is sad to read.

more than 80% of the whisky distilled in Scotland is foreign-owned and the majority of value of leading brands values is accumulated overseas.

http://www.bruichladdich.com/article/what-does-scotland-get-out-scotch

[FuzzyAffro]

Yeah but you did just quote them, like.

I quoted Oil and Gas UK. I would imagine they're a fairly decent source on oil and gas in the UK.

[AUFC90]

This is sad to read.

http://www.bruichladdich.com/article/what-does-scotland-get-out-scotch

That can be changed if we control our economy. There's one very obvious reason why. It can't be called scotch unless it's produced in Scotland.

[bowmore]

Its interesting enough but falls into the same old trap, probably deliberately, of thinking 'oil revenues' means the tax on the profits of oil companies. When infact it means all revenues generated due to oil and gas. It puts the figure this year at £600 million, which is laughable, its tens of billions every year.

It has to include all taxes generated by the oil and gas industry, then the picture looks very different.

http://www.bbc.co.uk/news/uk-scotland-scotland-business-30831718

"A report for the industry body Oil and Gas UK last year estimated the sector is worth about £35bn to the UK economy."

This is one of the main reasons the UK was so utterly desperate to keep us, and your article is a good example of the kind of sleekit games and lies that will be played to make FFA have the affect of making Scotland worse off. When if it was genuine FFA we would clearly be much better off.

He also constantly mentions statements made by the yes campaign and challenges them, but never once mentions statements made by the no camp and doesn't challenge them.

Also it clearly states, as below, that, that figure is an OBR forecast for 2015/2016

http://www.ifs.org.uk/publications/7652

but don't let that stop you.

This is where the IFS £7.6bn "black-hole" figure comes from; they're simply recognising that when Scotland's share of North Sea oil revenues slumps as low as £600m (as the OBR forecast for 2015-16) then more of the underlying deficit gap will be exposed. Note that the OBR forecast a further slight deterioration of North Sea oil revenues in 2016-17; the black-hole is not expected to be getting any smaller.

[bowmore]

That can be changed if we control our economy. There's one very obvious reason why. It can't be called scotch unless it's produced in Scotland.

Though its probably my heart speaking, as such an iconic produce/symbol it should only ever be allowed to run and owned by Scots IMO.

[bowmore]

I quoted Oil and Gas UK. I would imagine they're a fairly decent source on oil and gas in the UK.

Yes but does your quote forecast 2015/16?

[boabinoban]

Assuming that Scotland would go for Federalism is surely assuming that Scotland wants Trident? I would've thought this would scupper any plans for federalism.

[RockyDale]

I wonder what arbitrage opportunities will arise after after FFA.

[FuzzyAffro]

Also it clearly states, as below, that, that figure is an OBR forecast for 2015/2016

http://www.ifs.org.uk/publications/7652

but don't let that stop you.

Yeah of oil revenues, not of revenues derived from oil and gas. They're different things, anyone who thinks it has fallen from £35 billion to £600 million in a couple of years should be disenfranchised.

[bowmore]

From the sample of swing voters intrerviewed on Fuzzy Bystanders BBC it was apparent that the swing/protest voters did so not in relation to independence (that question has just been answered) but more in relation to the general UK wide disaffection with Westminster and also for FFA/Federalism to be granted.

Whether you think that the latter is a good thing or not you can well imagine that the Tories will see this as the card that they have to play, not only to save the union (no doubt Cameron was put straight by Mrs Windsor on that) but also to achieve EVEL and the scrapping the Barnett Formula and to put the spotlight upon the SNP.

So if this plays out the SNP will be faced with the consequences of rejecting more powers, or the consequences of taking them.

It certainly a fascinating scenario.

[bowmore]

Yeah of oil revenues, not of revenues derived from oil and gas. They're different things, anyone who thinks it has fallen from £35 billion to £600 million in a couple of years should be disenfranchised.

That'll be the OBR then

[AUFC90]

The oil and gas industry employs over 300 thousand people in very well paid jobs. It's multi billion pound export industry is growing every year. Like Fuzzy says, anyone who thinks its not worth tens of billions EVERY year to the UK treasury is a fucking zoomer.

[FuzzyAffro]

The oil and gas industry employs over 300 thousand people in very well paid jobs. It's multi billion pound export industry is growing every year. Like Fuzzy says, anyone who thinks its not worth tens of billions EVERY year to the UK treasury is a fucking zoomer.

Exactly, £600 million is fucking laughable, it is worth that a week.

[AUFC90]

Oil & Gas UK’s chief executive, Malcolm Webb, explains: “The offshore oil and gas industry generates almost £40 billion a year for the economy by producing oil and gas worth £32 billion and by exporting oilfield technology and expertise worth £7 billion. The recent sharpening of focus within Government and industry on the business environment required to grow that contribution in future has given investors the confidence to develop new fields and redevelop older fields, so we are now seeing the highest-ever investment. This is heightening the business opportunities for the UK’s world-renowned supply chain and is boosting employment to 450,000 jobs across Britain.”

The UK’s world-class supply chain now generates sales of £27 billion a year, including £7 billion in exports. It is considered a world leader in subsea engineering which is worth £9 billion a year and holds 45 per cent of that global market, and well services companies are generating revenues of almost £2 billion a year, the highest since records began.

Oil and gas extraction has provided the Exchequer with more than £300 billion (2012 money) in production tax over the past 45 years. In time, the current unprecedented investment will lift production, bringing with it significant funds for the public purse. In 2012-13, £6.5 billion was paid in tax on production, representing over 15 per cent of the Exchequer’s total receipts of corporate tax.

In addition, the oil and gas supply chain is estimated to have paid an additional £5 billion in corporate and payroll taxes, taking the total industry contribution to almost £12 billion.

Mr Webb comments: “The industry is the UK’s largest industrial investor and contributor to gross value added. With 15 to 24 billion barrels of oil equivalent (boe) still remaining to be developed, the UKCS possesses great potential for contributing to economic growth for decades to come.”

According to the UK Government, oil and gas will still provide some 70 per cent of the UK’s total primary energy in 2030. Although the UK remained the third largest producer of gas and second largest producer of oil in Europe in 2012, annual production declined by 14.5 per cent to 567 million boe, or 1.54 million boe per day (boepd).

In 2012, only nine new fields with total reserves of 146 million boe began producing. Much more encouragingly, we anticipate that 15 fields, with combined reserves of 470 million boe, will come onstream in 2013. The Banff, Gryphon and Elgin fields are also coming back onstream, but over the year, production is now forecast to fall to a range of 1.2 to 1.4 million boepd.

Mr Webb addresses the continued decline in production, stating: “Despite impressive investment in new developments, the production efficiency of existing assets remains in worrying decline. DECC and the industry are working to tackle this serious concern through a joint task group. The Wood Review, which is currently examining how to maximise UKCS recovery, is also very timely and we very much look forward to seeing the recommendations early in 2014.”

Concluding, Mr Webb says: “The industrial strategies launched by both the British and Scottish governments provide a clear framework for increased investment, innovation, growth in exports and British job creation. Unlocking the total economic potential of the UKCS will require both the industry and government to play their respective parts to the full.”

[FuzzyAffro]

That'll be the OBR then

You don't understand, I can see why I have you on block now you're too stupid for this stuff.

[FuzzyAffro]

Oil & Gas UK’s chief executive, Malcolm Webb, explains: “The offshore oil and gas industry generates almost £40 billion a year for the economy by producing oil and gas worth £32 billion and by exporting oilfield technology and expertise worth £7 billion. The recent sharpening of focus within Government and industry on the business environment required to grow that contribution in future has given investors the confidence to develop new fields and redevelop older fields, so we are now seeing the highest-ever investment. This is heightening the business opportunities for the UK’s world-renowned supply chain and is boosting employment to 450,000 jobs across Britain.”

The UK’s world-class supply chain now generates sales of £27 billion a year, including £7 billion in exports. It is considered a world leader in subsea engineering which is worth £9 billion a year and holds 45 per cent of that global market, and well services companies are generating revenues of almost £2 billion a year, the highest since records began.

Oil and gas extraction has provided the Exchequer with more than £300 billion (2012 money) in production tax over the past 45 years. In time, the current unprecedented investment will lift production, bringing with it significant funds for the public purse. In 2012-13, £6.5 billion was paid in tax on production, representing over 15 per cent of the Exchequer’s total receipts of corporate tax.

In addition, the oil and gas supply chain is estimated to have paid an additional £5 billion in corporate and payroll taxes, taking the total industry contribution to almost £12 billion.

Mr Webb comments: “The industry is the UK’s largest industrial investor and contributor to gross value added. With 15 to 24 billion barrels of oil equivalent (boe) still remaining to be developed, the UKCS possesses great potential for contributing to economic growth for decades to come.”

According to the UK Government, oil and gas will still provide some 70 per cent of the UK’s total primary energy in 2030. Although the UK remained the third largest producer of gas and second largest producer of oil in Europe in 2012, annual production declined by 14.5 per cent to 567 million boe, or 1.54 million boe per day (boepd).

In 2012, only nine new fields with total reserves of 146 million boe began producing. Much more encouragingly, we anticipate that 15 fields, with combined reserves of 470 million boe, will come onstream in 2013. The Banff, Gryphon and Elgin fields are also coming back onstream, but over the year, production is now forecast to fall to a range of 1.2 to 1.4 million boepd.

Mr Webb addresses the continued decline in production, stating: “Despite impressive investment in new developments, the production efficiency of existing assets remains in worrying decline. DECC and the industry are working to tackle this serious concern through a joint task group. The Wood Review, which is currently examining how to maximise UKCS recovery, is also very timely and we very much look forward to seeing the recommendations early in 2014.”

Concluding, Mr Webb says: “The industrial strategies launched by both the British and Scottish governments provide a clear framework for increased investment, innovation, growth in exports and British job creation. Unlocking the total economic potential of the UKCS will require both the industry and government to play their respective parts to the full.”

Nah that's pish, its worth £600 million a year and that's it, I saw it on TV.

[bowmore]

Under our earlier projections based on the OBR’s December 2014 forecasts, Scotland’s North Sea revenues were projected to fall from around £4.0 billion in 2013–14 to around £1.8 billion in 2015–16. This would have given Scotland a deficit of around 8.0% of GDP in that year. Using the same methodology, the OBR’s March 2015 forecasts imply Scotland’s North Sea revenues will fall to around £0.6 billion in 2015–16. This would mean Scotland’s budget deficit would be 8.6% of GDP in that year.

In contrast, OBR forecasts for the UK as a whole are effectively unchanged – the budget deficit for the UK as a whole is still expected to be 4.0% of GDP in 2015–16, despite the reduction in North Sea revenue forecasts. Scotland’s projected deficit in 2015–16 is now 4.6% of GDP higher than that for the UK as a whole. In cash terms this is equivalent to a gap of £7.6 billion. Unless oil and gas revenues were to rebound, onshore revenues were to grow more quickly than in the rest of the UK, or government spending in Scotland were cut, a similar sized gap would remain in the years ahead.

Why do the forecasting changes affect Scotland and the UK as a whole so differently? There are two reasons.

First, and most importantly, because most North Sea revenues are estimated to come from the Scottish portion of the North Sea (84% in 2013–14), and because the onshore economy and tax-base of Scotland is much smaller than that of the UK as a whole, a fall in this revenue stream has a much larger impact on Scotland’s fiscal position. For instance, the reduction in forecast revenues in 2015–16 is equivalent to around 0.8% of Scottish GDP but only around 0.1% of GDP for the UK as a whole.

Second, is the fact that the fall in oil and gas prices may have a positive impact on the onshore economy (by reducing energy costs, for instance). For the UK as a whole, this positive impact on the onshore economy may be big enough to more than offset the direct impact of lower oil and gas prices on North Sea revenues (A recent report by PWC suggests this is the case). This seems much less likely to be the case for Scotland – which accounts for the majority of the UK’s North Sea output and revenues, but only a small (close to population) share of onshore output and revenues.