Aberdeen is struggling with a difficult choice, as independence loomed again

Suffered greatly from falling oil prices and job losses, Scottish ‘energy capital of Europe is facing a difficult decision in the face of uncertainty

Aberdeen wrestles with hard choices as independence looms again

The busiest in Europe heliport, which ferries oil workers offshore between the North-East of Scotland in the North sea drilling rigs, is typically one of the most active parts of the city. But two years in the oil industry decline and thousands of job losses means, some people say that food banks are now the busiest place in the “energy capital of Europe”.

The collapse in oil prices over $100 per barrel, when the Scottish referendum on independence was held in 2014 to $ 27 last year – was firmly in the granite City.

“Absolutely Aberdeen through a meat grinder, you can see that the shops, restaurants and pubs are closing, people out of work,” says Deirdre Michie, Executive Director of oil and gas in the UK.

Figures in the trade show the number of people employed in industry in the UK declined with 453,800 in 330,400 between 2014 and 2016. Scotland is 38% of the total workforce, and the unemployment rate in Aberdeen city rose by a quarter during the recession.

Michie says that the key is the positive difference between the last referendum and Nicola Sturgeon for “indyref2”, was recognized this week at Holyrood, is that oil companies cut spending. “We’re more competitive as the industry is, we are in a better place,” says MiCHi, who speaks of “cautious optimism”, as the creeping oil prices to $ 52 with the large oil-producing countries announced in December last year, the production of borders.

Low operating costs, will be crucial if Scotland of extracting the remaining UK oil and gas, which it contains 88%, according to analysts. In 2014, the then-leader of the Scottish National party Alex Salmond is to put these hydrocarbons are the basis of his economic and fiscal case for independence. According to him, the 24 billion barrels of oil equivalent (boe) to operate, $ 1.5 trillion in Scotland.

Forecasts today are much less oil will be recovered, which could undermine the financial case for independence. Oil analyst, wood Mackenzie reports that stocks have been reduced, partly because some of the fields ceased production in the face of declining oil prices.

Professor Alexander Kemp, an oil economist at Aberdeen University, says his research shows that at an oil price of 60$, Scotland can produce about 11 billion barrels. BC reserves in the period up to 2050, leaving up to 7 billion boe of unused.

“The challenge for industry is to develop new technologies to these [reserves] of economic to make it closer to 20 billion boe that some people are talking about. At the moment, we are not going to do it,” he says.

Even if the price of oil rising in recent months, unions say a moderate recovery of the oil industry said not globally felt while in Aberdeen. “He never saw on earth; people are working under the constant threat of layoffs and wage cuts. I imagine a couple of guys who today are turning against layoffs,” says Jake Molloy, regional organizer for RMT.

The city is so heavily dependent on the oil industry, side effects are widespread in businesses that rely on it. Taxi drivers report trade to double in 2016; one says, its usual 30-the week of the trip to and from the airport £20 each way, up to five as a result of lack of oil.

“It’s just gradually falling apart,” says Pete Morton, Barista chain of coffee shops in the town centre. There are a few empty shops and at least eight bookmakers up and down the length of Union Street, although local residents are split on whether it is the collapse in oil prices or a reflection of a broader retail change is also seen in other places. Real estate prices have fallen, and there is a history of dismissed oil workers who can’t afford large mortgages, but equally don’t want to sell in a falling market.

A straw poll suggests many here believe that the economic argument for independence was shot, what happened to the price of oil. “I think it affects her a lot of time,” says the pensioner Phyllis Thompson.

Campbell Monroe, an electrician and former offshore contractor says about financial independence: “worse now”.

Others do not agree. “We have a lot more to offer than just oil. I Aberdeen pretty hard, based on this, but I don’t think we just have to rely on it,” says local resident Anna Wilson.

Aberdeen wrestles with hard choices as independence looms again




Jim Gifford, Scottish conservative councillor and former leader of the County Council of Aberdeenshire, says: “companies just passing by, first, a referendum, and then came the collapse in oil prices: it was catastrophic. A second referendum is the worst. This uncertainty businesses do not like uncertainty”.

In the town hall, where the Barometer outside to “change” and the Queen’s portrait hangs in the hall inside city Council leader Jenny Laing said Aberdeen has experienced recessions before, but “not on this scale” and that the prospect of another referendum is a catastrophe.

“I was a fighter for the remaining [in 2014] because I don’t believe, even with the oil price at the peak was that it was a sound economic choice for all my future one industry, we have seen UPS and downs before. Since the decline in oil prices, I think, of course, these arguments are not justified,” says Scottish labour adviser.

Callum mccaig, the SNP MP, who drew laughter from colleagues and the stone face of the UK Teresa may in PMQs last week when he asked if Britain could afford to be an independent country, given its debt – rejected the idea that the financial and economic case does not add.

“If we were a petrol state and our only economic activity declined in value by 75%, we would have had a huge decline, but we do not. The Scottish economy is dependent on oil and gas”, – said a member of Aberdeen South. He argues that if Scotland was independent for 2014-16 will be presented, he would deal with the oil crisis it is better for the city.

“Compare the urgency with which Ministers are concerned the steel crisis, or the haste with which Greg Clarke went to France to discuss the future of VAUXHALL, and compare it with a full complacency in support of our oil and gas industry,” he says.

The consequences of lower oil prices on another bid for independence, he admits: “I don’t think it helps,” but because the downturn was sent to Aberdeen from Westminster, will help to win over wavering (the city voted last time).

Mccaig laughed at those who say, even to say that another referendum brings more uncertainty and risks hurting the oil industry. Pointing to leaving the UK Secretary David Davis told MPs that the government has not assessed the implications of leaving the EU without a deal, he says, “you have complete uncertainty. You can’t have more ambiguity.”


On the North sea oil industry was a cash cow for the Treasury in the UK since the early 1980-ies. Now, this is largely conducted as a reservoir of combustible carbon and as a source of tax revenues, an independent Scotland will have to look elsewhere for growth.

In subsequent years, the price of oil collapsed and the industry went into decline, the GDP of Scotland died. At that time, the UK GDP ahead of most developed countries in the world.

This is a blow to Holyrood, which is struggling with a budget deficit approaching 10% to Nicola Sturgeon don’t even think about the consequences leaving the UK.

Such a drop in income from oil exports of whisky that is now the country’s biggest export, is pushing professional services – many of them related to the financial sector in Edinburgh is in second place; the third, oil and mining, fourth.

Many officials SNP still look to Ireland as a role model: Dublin as a low-tax financial centre, cork as a high-tech hub and agriculture as the basis. But the Irish government is nervous about leaving the UK for the same reasons Scotland should be. The UK is the largest destination for its exports, and the prospect of rates may convince some industries to swarming almost completely to the rest of the UK.

Aberdeen wrestles with hard choices as independence looms again




Particularly at risk is the Scottish financial services industry, which makes most of their business South of the border. Standard life, about merge with rival Aberdeen asset management to create an investment Behemoth, said during the last referendum that is likely to move South, if only to remain a dominant player in the market of pensions in the UK. Royal Bank of Scotland and lloyds in a similar position.

There is the prospect of European Union membership after leaving the UK from the EU, but it will be blocked until the budget deficit Scotland above 3%. So even if Spanish, are concerned a good deal for Scotland is encouraging Catalonia to split, I decided to switch the UK is Scotland, it could be years before the EU-27 will be 28 times.

Holyrood might try to access the single market to join Norway, Switzerland, Iceland and Liechtenstein in the European free trade area. It requires a fee can be waived, and the free movement of labor, which is Holyrood. EFTA means duty-free access for Scottish exporters, which will support agriculture and fisheries and may stimulate English or Welsh firms that rely on access to the EU and consider the shift in Ireland to transfer their businesses to the North. At the moment exports to the EU is small (only 16%) compared with the UK and the USA.

In the future from oil. Scottish energy producers, many are investing heavily in renewables, becoming more sale of electricity South of the border. But the transition will be painful.
Phillip Inman