Underpinning the Yes campaign were the revenues to be garnered from “Scotland’s oil”. Its budgets and arguments were all based on the oil price remaining at or in excess of US$110 per barrel this year and into the foreseeable future.
However, the oil price today is below $80 per barrel, some 30 per cent less than the SNP’s projected figure.
The US and Middle Eastern states can produce oil to sell at $50 per barrel and still remain profitable. US oil production reached a 44-year record high in May.
The US is shortly to become a net exporter of oil and gas. Taking the world’s largest single consumer of oil out of the market in this way will transform the price of oil and gas products.
This is good news for consumers and net importers of oil and gas (which includes the UK as a whole). It would have been a disaster for an independent Scotland because the tax take from the sector is hammered both by virtue of the lower price and the reduced production and restricted new exploration which a low oil price leads to.
The North Sea is and will remain an expensive territory from which to extract oil and gas.
As a result, an independent Scotland would have had an annual shortfall in its first budget post-independence in excess of £4 billion.
A deficit of that scale cannot be met by taxing the few higher-rate tax payers (or the very wealthy), so the burden must fall on the bulk of the population if it is to be met at all.
That would be a recurring shortfall and those worst affected would be the poor.
In addition to this, following the signing of the accord two weeks ago between the US and China, the International Energy Authority has announced that two-thirds of all fossil fuel reserves (including those in the North Sea) are rendered null and void (worthless) if there is a deal to limit CO2 levels to 450 particles per million.
So Patrick Harvie will no doubt support such a deal which will kill the SNP’s credibility and financial plans stone dead.
Either Alex Salmond (who was an oil economist at RBS in the 1970s) knew about these seismic shifts and withheld the truth from us or he was utterly reckless in ignoring them. Either way, he owes us all an apology.