The Scottish Government has welcomed the announcement that a new Aberdeen-based oil and gas regulator – an SNP party energy policy which has endured since the 1980s – will be set up by Autumn 2014.
John Swinney, Finance Minister, said: “We firmly agree with the recommendation for a new Regulator, and I believe a shadow body should be set up without delay. Given that Europe’s Oil and Gas capital is in Aberdeen, I strongly believe that this is the only conceivable location for that new Regulator.
“The Scottish Government supports the full implementation of Sir Ian’s proposals for a stronger, more effective regulatory body, which if implemented quickly can bring enormous progress in the recovery of oil and gas in the North Sea. Time is of the essence.
“For too long, the North Sea has suffered from poor stewardship from the UK Government to date, and the time has come to address that. Sir Ian’s report has confirmed that fiscal instability has been a significant factor in basin underperformance in the North Sea.
“We’ve had 16 changes to the fiscal regime in the North Sea in 10 years, we’ve had 14 oil ministers in the last 17 years, three in the last four years, one thing that Scottish control of oil and gas resources will offer is a much more stable, long term policy.
“Although Sir Ian was not asked to make specific recommendations in relation to the fiscal regime, it is clear that stability and predictability are essential if we are to realise the North Sea’s full potential.
“That is why the Scottish Government appointed an Independent Expert Commission on Oil and Gas in September 2013, chaired by Melfort Campbell, who will report in Spring 2014. In addition to the regulatory regime, the Commission will make specific proposals in relation to the North Sea fiscal regime with a view to providing long term stability and predictability for the industry. It will also consider Sir Ian’s recommendations in full.
“However, the decisions of successive Westminster governments to spend Scottish oil revenues rather than investing a proportion of them also represents a major lost opportunity. Therefore, Scotland’s Future proposes, as recommended by the Fiscal Commission Working Group, that an independent Scotland should establish a Scottish Energy Fund to stabilise revenues in the short-term and to ensure that a proportion of oil and gas tax receipts are invested for the long-term benefit of the people of Scotland.”
And fellow SNP MSP Maureen Watt – who used to work in the oil and gas industry – added: “We only have to look across the North Sea to Norway to see how our oil revenue could – and should – have been used.
“Oil was discovered in the waters of both countries around about the same time, but while Norway now has an oil fund worth £470 billion, Scotland has been left with nothing as a result of successive years of Westminster squander and mismanagement.
“As the Fiscal Commission has pointed out, of the 20 largest oil producing nations in the world, the vast majority have established savings funds. It is only the UK and Iraq that have not. And Westminster has absolutely no intention of changing its ways, with UK Energy Secretary Ed Davey shamelessly telling the BBC that he doesn’t think setting up an oil fund is ‘such a good idea’. This is despite the fact more than half the value of the North Sea – with a wholesale value of up to £1.5 trillion – still remains.
“The Scottish Government is committed to making the most of these energy resources, with the First Minister today announcing £10.6m funding for a new Oil and Gas Innovation Centre based in Aberdeen. This welcome investment will help support pioneering work in the industry.
“In contrast, Westminster has downplayed the value of oil and squandered the revenues for more than 40 years. We cannot allow them to waste the next 40.
“The UK Government does not deserve another chance – only a Yes vote in September can allow us to establish an oil fund and reap the rewards we have so long missed out on.”