Alex Salmond's Resource Predictions 'Blown Apart' By Scottish Oil Tycoon

Salmond's Oil Predictions May Have Been Tincy Bit Overestimated

Alex Salmond has been accused of massively overestimating the size of the North Sea oil reserves by a major oil tycoon, in a damning verdict that critics said "blew apart" the first minister's plans for an independent Scotland.

Scottish-born billionaire businessman Sir Ian Wood said that Scotland had only 15 years of oil left before the depletion of its reserves would hurt jobs and the economy, arguing that oil and gas reserves over the next five years would be 40% less than what the Scottish government predicts.

Although Salmond predicts there are 24 billion barrels of oil left in the North Sea, Sir Ian suggested there would only be enough for 15 to 16.5 billion barrels in a "best outcome". This would work out to £370 less for every man, woman and child every year in an independent Scotland.

Sir Ian's intervention is especially awkward for Salmond as he welcomed the oil tycoon's report, which he wrote for the UK government earlier this year, on how to maximise North Sea oil production.

The oil tycoon told Energy Voice: "Young voters in the referendum will only be in their 40s when they will see the significant rundown in the Scottish offshore oil and gas sector, and the serious implications for our economy, jobs and public services."

"Indeed, the rundown impact will begin to be felt by 2030, which is only 15 years from now."

Despite claiming “no allegiance to any party or campaign”, Sir Ian suggested that the pro-unionist campaign was winning the Scottish independence debate in terms of offering "growth and economic success".

“Against these measures, it’s very hard not to conclude the case is heavily weighted towards Scotland remaining in the UK and getting the best of both worlds – I want the best for future generations of Scots," he added.

Former Labour chancellor Alistair Darling, head of the pro-UK Better Together campaign, said the oil tycoon's analysis "fatally undermines" Salmond's oil predictions and his remarks "blow apart Alex Salmond's plans for funding schools and hospitals."

In response to Sir Ian, Scotland's Energy Minister Fergus Ewing told the BBC there is "a wealth of expert opinion on the huge scale of Scotland's long-term oil and other energy reserves".

He added: "This is ultimately a debate about exactly how big Scotland's remaining oil reserves are, and most countries are not nearly lucky enough to be in that fortunate position."

The blow to Salmond's Scottish independence plans over his oil predictions comes as a think-tank suggests that his idea of using the pound without a formal currency union could give an independent Scotland a more stable economy.

A new report from the Adam Smith Institute said that "sterlingisation", combined with reforms to banking regulations, could lead to banks taking fewer risks, reducing the likelihood of future financial crises.

Sam Bowman, research director at the Adam Smith Institute and the author of the report, said Scotland was "almost uniquely primed for such a system of 'adaptive sterlingisation'".

The prospect of Scotland using the pound with the formal agreement of the rest of the UK, and without the back-up of having the Bank of England as a lender of last resort, was raised as Salmond comes under increasing pressure in the run-up to next month's referendum to set out an alternative to a currency union.

The three main parties at Westminster have repeatedly said they would not sign up to such an agreement with Scotland if it left the UK, leading to demands for the First Minister to state his "plan B", which he has indicated would be to use the pound without a formal currency union.

Bowman said: "The Scottish independence debate has repeatedly foundered on the question of currency, but if Scots look to their own history they will find that their country is a shining example of how competition in currency and banking can ensure a stable and effective banking system.

"Scotland's free banking era was an economic and intellectual golden age, and its system of competitive note-issuance was recognised by such thinkers as Adam Smith as one of the root causes of the country's prosperity during this time."

He continued: "The examples of Panama and other dollarised Latin American economies are proof that countries can thrive when they unilaterally adopt another country's currency.

"Combined with a flexible, adaptive banking system, the unilateral use of another country's currency can instil a discipline in a country's financial sector that neither a national currency nor a currency union can provide. Scotland's banking system is almost uniquely primed for such a system of 'adaptive sterlingisation'.

The SNP's Westminster Treasury spokesman Stewart Hosie said it was a "very interesting report".

But he told BBC Radio Scotland's Good Morning Scotland: "While this determines that Scotland could use sterling in any circumstances, it is one of the viable options, a formal currency union remains the best one."

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