FACTCHECK UPDATE: No, the UK can't "be more like Norway" in the North Sea
🇬🇧 extracted most of its oil & gas after privatisation
🇳🇴 has much more left due to state stewardship
🤔Lawson spent UK windfall on tax cuts; Norway got a sovereign wealth fund
https://www.carbonbrief.org/factcheck-nine-false-or-misleading-myths-about-north-sea-oil-and-gas/
@drsimevans Alt-txt
Specifically, the UK has already used up the large majority of its North Sea resources, having extracted around 90% of the oil and gas that was available.
In contrast, Norway has only used up 57% of the “expected recoverable resource” from its part of the North Sea, according to official estimates published by Norwegian Petroleum.
This is the result of deliberate choices taken decades ago in the two countries, says Prof Caroline Kuzemko, co-director of the UK Energy Research Centre (UKERC) and professor of political economy at the University of Warwick. She tells Carbon Brief:
“The Norwegian government took a strategic decision to have a steady rate of depletion, so the assets didn’t run out too quickly.”
This choice, as well as the state control that Norway has maintained over its oil and gas industry, is “pretty much diametrically opposite” to what the UK has done, she says:
“The Conservatives took a decision [in the 1980s] to allow others to be in control of [the UK’s] North Sea assets and, therefore, we are now in a position where you can’t order anyone to get more oil out, whereas Norway did the opposite.”
Prof Kuzemko notes the then-Conservative government privatised the oil and gas industry in the 1980s, after which there was a “rapid” depletion of the UK’s resources. She explains:
“The rate of depletion of the UK continental shelf has just been rapid, because that’s in the interests of the [private] companies that were running those sites.”
@drsimevans (Cont'd)
(The revenue from North Sea privatisation and the subsequent rapid extraction of its oil and gas resources was a major - and underappreciated — reason why then-chancellor Nigel Lawson was able to cut income taxes in the 1980s, Kuzemko notes.)
Similarly, former government energy official Dan Quiggin, now a senior policy adviser at NGO Transport and Environment, tells Carbon Brief that Norway simply has more oil and gas left than the UK, where “most of what was there has been extracted”. He says:
“The UK spent its windfall on current expenditure in the 1980s and 1990s. You can’t retroactively have Norway-scale reserves or Norway-scale savings — those decisions were made long ago.”
Quiggin says that there is a “genuine contemporary policy difference” when it comes to the exploration and investment climate for the North Sea. However, he says:
“Norway offers more fiscal stability and actively supports new development, while UK policy has been more volatile. But even if the UK adopted Norway-style fiscal terms tomorrow, there isn’t the underlying resource base to replicate Norwegian production levels. You’d get somewhat more investment in a declining basin, not a Norwegian-scale industry.”
@drsimevans Adding insult to injury, the mentioned Nigel Lawson who masterminded squandering this resource was also a notorious climate-change denier and founder of the denial think tank Global Warming Policy Foundation.
Don't ever trust a Nigel.
Simon Evans
nikolar 🏕
Martin Vermeer FCD