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T
his month, the Scottish public will take to polling stations
to vote on whether or not Scotland should become an
independent country. In recent weeks, the ‘Yes Scotland’
campaign, led by Scotland’s First Minister Alex Salmond, has gone
head to head with the ‘Better Together’ campaign in an attempt to
sway Scots before the 18 September vote.
The prospect of Scotland leaving the UK immediately conjures
up a number of important questions. What would happen to the
famous Union Flag?Would the EU have a newmember?Would
Scotland keep the pound?
Another key issue that would need to be addressed should
Scotland vote ‘Yes’ to independence concerns North Sea oil and
gas revenues.
Using the ‘median line’ principle, approximately 90%of
the UK’s oil and gas reserves would belong to an independent
Scotland. And this, the ‘Yes’ campaign argues, is one of the key
reasons why Scotland would prosper as an independent country.
Scottishministers have hailed Aberdeen as ‘Europe’s oil and gas
capital’, arguing that independence would allowScotland to
emulate the success that Norway has had with its energy reserves.
However, there is still uncertainty regarding how exactly
North Sea oil and gas revenues would be allocated in the event of
Scottish independence. A ‘Yes’ vote would likely result in a major
tussle between Scotland and the rest of the UK over ownership of
oil and gas from the North Sea.
Away from the British Isles, the significance of maritime
border disputes can be seen the world over. One such conflict
is highlighted in a Special Report from risk mitigation company
AKE Ltd, prepared exclusively for LNGIndustry.com. AKE’s Asia
Pacific Specialist, George Martin, studies the long-term battle for
maritime supremacy in the East and South China Seas between
China, Japan and other countries in the region. The disputes
centre on two key issues that are significant for the natural gas
industry. Firstly, the potential hydrocarbon reserves under the
seas – although the complex nature of the boundary disputes
makes potential exploration in the region incredibly difficult. The
second and more important reason for the seas’ significance,
according to Martin, “stems from their use as key shipping lanes
for the regional powers’ energy imports”. As China and Japan
battle to ensure their energy security, Martin suggests that
control of the seas could be used by one country to prevent
or delay energy shipments to another: “a newmaritime ‘great
game’ is on the cards […] with natural gas supplies at the same
time a potential prize, strategic tool and victim”.
Returning to the Scottish referendumdebate in the UK,
similar ‘games’ are already underway, with both sides bickering
over howmuch oil and gas is left in Scottish waters. The ‘Better
Together’ campaign points to shrinking reserves – and a recent fall
in revenues – as evidence that an independent Scotland would
be overly dependent on this volatile and declining resource. In
contrast, the pro-independence campaign is resolute that its oil
must be seen as a blessing, not a curse.
It is now down to the Scottish public to show their hand.
However, regardless of the outcome of the referendum, it looks
certain that the political games between Scotland and the rest of
the UK are set to continue for some time yet.
Without nailing our political colours to themast on this
particular debate, it’s certainly true that some things in life are
simply ‘better together’. That’s why
LNG Industry
is proud to
be associated with Energy Global – home of the latest news
and analysis covering the entire oil and gas industry. If you are
interested in readingmore about the potential implications of
Scottish independence for the UK energy industry, keep your eyes
on
the coming weeks. And while
you are there, you can also sign up for a free trial of our sister
publications covering the global upstream (
Oilfield Technology
),
downstream (
Hydrocarbon Engineering
) and pipeline industries
(
World Pipelines
).
