Category Archives: SCOxit

SCOxit: Putting English Gas O’an a Peep….

Posted on 14 Mar, 2018

Read on to find out where these figures come from …..

There was a report last week, Perfect Storm for Energy Supplies as UK Runs on Empty about UK gas supplies running low in the Siberian cold snap and snow storms we’ve had. It’s in the Telegraph and has a lot of background detail (though they’ll only let you read it once before asking you to register).  In 2004 North Sea gas production meant that the UK was self-sufficient in gas. Since then our production has fallen and  we are now importing about 60% of our needs. And it’s not going to get any better : the National Grid estimates that we will be importing over 90% by 2040. The Guardian has a good article about this too though they are mostly concerned with the fact that a third of the imports are from Qatar.

Here are the facts.

In 2015, UK  production of natural gas, including natural gas liquids (NGL), was 429 Terawatt Hours (ref: Oil & Gas Stastistics) and in 2016 it had climbed to 463 (ref: UKGov Natural Gas, Ch4). This got me wondering how much if that comes from Scottish waters. I expect you see where I’m going with this!

How much natural gas does Scotland and rUK produce?

Overall, 96% of UK oil & liquid natural gas production comes from Scottish waters, so it’s very tempting to think that, post-SCOxit, the situation for England  will be hugely worse when it comes to them having to import  gas!

But then I remembered that the southern sector of the North Sea mostly has gas fields and this sector will be within English territorial waters. So the proportion of gas production from Scotland compared with rUK is much less, though it’s still more than half:

By Gautier, D.L. – US Dept. of Interior USGS Bulletin 2204-C, Public Domain, Link

I’ve also done a bit of researching into other sources for how much gas is produced from the Southern North Sea . It’s all there in the Oil & Gas Authority Offshore Production figures, gas field by gas field, except you need to know which fields are in the south. Fortunately  Wikipedia has a list of North Sea oil and gas fields by sector. So by putting the two sets of info together I’ve got an estimate for gas production coming from English sector of the North Sea. It amounts to around 150 Terawatt Hours in 2017. This is gas from offshore North Sea. There is some onshore gas production and some from Irish Sea sector. That all fits with this 150 tWh estimate being a bit less than the 170 tWh that I calculated from the Oil & Gas Statistics.  

But the main point is that in 2016 we produced 60% of UK’s natural gas and  LNG, liquid natural gas. (Ref: Scottish Government Oil & Gas Statistics)  

How much natural gas does Scotland & rUK consume?

In 2016, UK consumed 891 tWh of natural gas. (Ref: UK Energy Brief, p23) Initially I assumed that 10% of that consumption happens in Scotland, based on us having 8% of the UK population plus a bit because it’s colder up here. But since then I’ve found these stats which show that in terms of gas meters, we only account for  4.5% of UK metered usage. 

However that doesn’t include other ways in which gas is used, the big one being power generation. Now Scotland is fast approaching self-sufficiency in electricity production from renewable sources, ie not from gas fuelled power stations. But let’s be generous and assume that Scotland still takes 8% of total UK gas usage, ie 71tWh. That means rUK consumption is 820 Terawatt Hours. If they produce 170 tWh and assuming that all imported gas, 418tWh,  will go to  rUk then they will still need a further 232 tWH supply to plug the production hole post-SCOxit.

Where do our gas imports come from?

It’s from these countries that we import gas to UK at present:

According to Reuters, Norway won’t be able to plug a post-SCOxit gap (Ref: Reuters, 2012) Another option is to import it from elsewhere in Europe but that in effect means becoming more reliant on  Russian gas.  The easiest option will be for rUK to buy it from Scotland. But can Scotland plug the rUK gas shortfall? No, not all of it.  We’re producing about 260 tWh and using about 71tWh. So we have a surplus of about 189 tWh. In the short -term rUK’s gas imports will look like this. 

OK, so that prompts another question. What’s the wholesale cost of natural gas? And how much income would come to Scotland from exporting 189 tWh of it to England? 

The wholesale gas market in Britain has one price for gas irrespective of where the gas comes from. This is called the National Balancing Point (NBP) price of gas and is usually quoted in price per therm of gas. (Ref: Ofgen)

Current price is around 50p/ therm (Ref: ERC Equipose) so that just needs converting to tWh….. OK, 1 tWh equals 34.1 million Therms. UK therms, of course, just in case you’re worried that I’m using the right units. So Scottish exports of 189 tWh of gas will sell for – Wait for it :

 

Now this exercise isn’t about me finding a new source of income to the Scottish Exchequer. Tax income from this £3billion is presumably already included in the GERS estimates under Oil & Gas Revenue. What this is about is showing that rUK will be dependent on us for its gas supply. There’s no way they can do without Scottish gas imports. So next time we hear some Unionist telling us that independence will put Scottish trade at risk cos they might just stop trading with us, just wait till they draw breath and say: 

Aye, right!! but whit aboot yon 180 terawatt hours of gas ye need frae us?

 

 

 

 

 

Do Revenues from Scottish Oil Under-Write UK Profligacy?

 

This has appeared on several Indy pages on Facebook. It’s unusual that it’s so specific on the date and place that he’s alleged to have said this. In fact, that’s just the kind of reference that I’m forever asking for on Facebook. Unfortunately in this case I can’t find any trace of him saying it. I’m not the only person who has looked into Hansard records to confirm. No-one has managed to confirm it that I have found. In fact as far as I can make out from the Hansard Archives, the Commons wasn’t sitting that day. So if he said this on 29 May, he must have said it elsewhere.

It is of course only one of lots of memes which focus on the same underlying belief. The belief goes like this:

Scotland produces XXX billion in revenues which goes to Westminster

Westminster returns much less than that in the block grant to Holyrood.

Scotland is being ripped off by Westminster.

To be able to prove this conclusively is an on-going activity for Indy supporters. So if Alastair Darling said this actually while he was UK Chancellor of the Exchequer in the Gordon Brown Labour Government of 2007-2010, well that is quite a quote to have handy for another Scottish Independence campaign.

But Google searching about Darling’s statement does provide a reference to John Jappy. You might not have heard of him: he was from Inverness and worked in the civil Service in Accountant and Comptroller General’s Branch. Several quick promotions took him to the Head Office in London, and further promotions to the General Accounting Division, with links to the Treasury. This involved him in the preparation of National Budgets. When he retired he was active in CND. He died in Feb 2018.

He wrote up this article called  “Hiding the Truth”.  (You can find many other articles by him here.) And it’s in this article that you find the statement :

On 29 May 2008, Labour Chancellor Alistair Darling admitted in a back-handed way, that Scotland’s oil revenue had been underwriting the UK’s failure to balance its books for decades.  There is still 30 years of oil supply left in the North Sea (some 150 million barrels) valued at 2008 prices at 1 trillion dollars.  This excludes the new fields being brought into production in deeper waters west of Shetland.

So no information about where it was said. But a statement by a respected Civil Servant with many years experience and insight into the ways of working of the UK Treasury.

This was an interview he gave in the run up to the 2014 Scottish Referendum. 

If you’ve listened to the interview video then you’ll be aware that Mr Jappy referred to various other instances where Scotland’s financial health and wealth were revealed.

So, apart from the inclusion of an unverifiable reference to Hansard but which is probably incorrect, this would appear to be a good meme!! Hurrah.