By G.A.Ponsonby
Oil took centre stage in the independence debate this week. How much is left and how much cash it will generate was a matter of considerable speculation, not to say dispute.
If you oppose independence, you embraced Westminster claims that oil is a fast diminishing resource that will generate an insignificant amount of revenue over the coming years. Further, the revenue itself is so volatile that an independent Scotland would be vulnerable to price fluctuations.
By G.A.Ponsonby
Oil took centre stage in the independence debate this week. How much is left and how much cash it will generate was a matter of considerable speculation, not to say dispute.
If you oppose independence, you embraced Westminster claims that oil is a fast diminishing resource that will generate an insignificant amount of revenue over the coming years. Further, the revenue itself is so volatile that an independent Scotland would be vulnerable to price fluctuations.
If you support independence then you cite industry figures and the Scottish government’s view that there are still 24 billion barrels of oil remaining that will generate billions for a Scottish exchequer. Further, the revenue generated by oil and gas is a bonus and not a necessity for an independent Scotland to be successful.
In Westminster’s corner was an organisation called the Office of Budget Responsibility [OBR]. Set up by Conservative Chancellor George Osborne in 2010, the OBR’s predictions on North Sea tax receipts have become lower and lower as we move nearer the date of the referendum.
In the Scottish government’s corner are the oil and gas industry itself as well as respected academics.
It’s probably fair to say that the pro-independence lobby were gaining the upper hand in this particular issue, helped by recent comments from a former Labour chancellor who admitted that the Labour party had underplayed the value of oil in the past in order to thwart support for the SNP.
This week though another organisation stepped into the oil debate – the BBC.
When BBC Scotland reporter Raymond Buchanan emerged on Wednesday morning with an apparent ‘leaked’ Scottish government report, it signalled a change in the corporation’s handling of the oil debate.
The contents of the document were presented as revelatory and new, and a constant referral to it being a ‘leak’ added melodramatic overtones suggesting confidential information had been uncovered. Buchanan’s appearance on Reporting Scotland that evening, where he flourished the document in front of a distant oil rig, brought oil into what was actually a report on electricity generation.
It was a very deliberate act on the part of the BBC Scotland reporter and almost immediately voices from the anti-independence group mounted an attack on the Scottish government’s latest paper on oil, which had been published a day earlier.
Indeed Buchanan’s skilful manipulation, leading the viewer away from renewable energy into oil and gas, was helped by adding the clip of Scottish Labour MSP Iain Gray who added some pro-Union arguments attacking oil price volatility.
The whole thing looked suspicious and those suspicions grew when the following day it emerged that the leaked document had in fact been passed to the BBC reporter by the anti-independence group Better Together.
Old News
Now, there’s nothing wrong with one of the sides in the constitutional debate handing material it believes is damaging to the other to a reporter. Such practices are the lifeblood of honest journalism and have led to corruption and abuse at the heart of government and other organisations being exposed.
However when one side hands over what it claims is a damaging piece of information then one would expect the recipient to employ basic journalistic checks and employ some healthy skepticism. What shouldn’t happen is for the news report to be tailored to fit the agenda of one side.
A document isn’t newsworthy simply by dint of having been leaked. Bizarrely in this case though, the fact it was leaked seems to have itself been used in order to suggest its contents were newsworthy.
The document contained two apparent ‘revelations’.
1. The Scottish government wanted to move away from volatile fossil fuels for electricity generation and into renewables.
2. The Scottish government were in favour of an integrated energy market that would see English consumers continue to purchase Scottish electricity which would help fund Scotland’s renewable industry.
The fossil fuel volatility was the ‘revelation’ that underpinned the Unionist attacks on the Scottish government over oil. Better Together had handed the report to the BBC, the purpose of which was to try to undermine the advantage being gained by the SNP in the debate over oil.
An official statement from the Better Together group made this clear:
“This leaked paper yet again makes public the private concern of SNP ministers about the volatility and instability of oil prices.
“The tax we get from the North Sea is so volatile that the difference between the highest and lowest years is the equivalent of Scotland’s NHS budget.”
There are indeed oil fired power stations in Scotland – one at Lerwick. It is old and is to be closed with a new power station burning either light fuel oil or gas being proposed. If oil price was the focus of the report then it is reasonable to suggest that the concern was more about the price going up than down.
In truth though, the suggestion that this report was anything other than confirmation of the Scottish government’s drive towards renewables is risible. This year saw Scotland generate more electricity through renewables than from fossil fuels – 5.7GW and 5.4GW respectively.
But just how newsworthy was the ‘volatile fossil fuel prices’ remark?
Well it turns out not to be newsworthy at all, it was contained in a Scottish Government document published all of three years ago which contained the following:
Despite the obvious potential for the development and deployment of renewable and low carbon technologies, there remain significant barriers to be overcome to ensure a clean, affordable and secure electricity supply that is required to meet climate change targets whilst delivering economic benefits for Scotland.
In addition to addressing the root causes of the challenges facing industry, there are other strong arguments for governments intervening in the energy markets, such as maintaining secure energy supplies, reducing exposure to high and volatile fossil fuel prices and creating new jobs and businesses.
The ‘leaked’ report contained an almost identical line of thought:
The transition to renewable energy reduces our dependence on damaging price-volatile fossil fuels, bringing greater stability in energy prices for consumers.
So, the report presented by the BBC in melodramatic fashion and which was subsequently used by Unionists in order to attack the Scottish government’s oil arguments, contained information already published. It was simply made to look new and damaging.
The ‘volatile fossil fuel’ aspect was not the only rehashed piece of information the leaked report contained. The belief that consumers south of the border would continue to purchase Scottish renewable generated electricity was also already in the public domain. In fact it is a well established argument from the SNP and has been attacked by Unionists several times.
On the cost of renewables the leaked report says:
It is equitable that these costs continue to be shared among consumers in Scotland and the rest of the UK.
Whilst there is an argument that the use of the term “equitable” makes the statement newsworthy, the BBC decided to adopt wholly emotive language by insisting the Scottish government were seeking a continuation of a ‘subsidy’ from the rest of the UK.
The SNP has argued many times that post-independence will see an integrated energy market operate that will allow a continuation of the export of Scottish electricity. Electricity generators will be guaranteed a price which will be passed on to customers through their household bills.
The simple fact remains that England cannot generate the electricity it requires and relies on Scottish ‘imports’.
Indeed, as reported by Newsnet Scotland in January, the UK government recently signed a deal that will see 3,000MW of renewable Irish electricity transferred via undersea cable to Wales where it will enter the National Grid. A ‘subsidy’ to the Irish or a trade agreement that acknowledges England’s energy shortfall?
Newsnet Scotland described Raymond Buchanan’s ‘leak’ as collusion between the BBC and the anti-independence campaign Better Together in order to aid the pro-Union side in the debate over oil. The evidence cited above would appear to back this up.
Oil Reserves
There was another interesting aspect of how BBC Scotland handled each side’s arguments over oil.
The clip below shows BBC Scotland Business and Economy Editor Douglas Fraser reporting on news that the London based body, the OBR had downgraded further its forecasts for oil revenues. Remember, this body was created by UK Chancellor George Osborne in 2010.
How Douglas Fraser reported the OBR oil revenue forecast
Note how Fraser reports on the claims made by the OBR. The BBC man describes the body – created by George Osborne as “independent” and oil revenue as “the most volatile thing the Treasury deals with”. The waters within which the oil resides is described puzzlingly as “British or Scottish”.
The OBR forecast is reported in an uninterrupted and uncritical fashion and, aside from a brief reference to “more optimistic” industry figures – of which there is no explanation whatsoever – the OBR numbers are pretty much left unchallenged.
Now let’s look at how Douglas Fraser changes his style when reporting on the Scottish government’s counter arguments – backed by the aforementioned industry insiders.
How Douglas Fraser reported the Scottish government oil arguments
Almost immediately Fraser starts to challenge the Scottish government arguments by claiming that oil and gas receipts would “probably” be needed in order to manage the deficit and balance tax and spending. We’re told that it is unclear how much oil is left and how much it will cost to extract.
Aside from a brief mention of the claim that the oil is a bonus, there is almost no attempt at informing viewers of what the Scottish government paper said. Even when asked what the oil and gas industry itself says, Fraser tells us nothing. No mention of their current reserve estimates or any forecasts on revenue.
The whole item, unlike his report on the OBR forecast, is a series of one sided critiques which is completely different from the style of the report into OBR forecasts.
In one week two BBC Scotland reporters have taken one of the most important areas of the independence debate – oil – and applied what can best be described as a pro-Union spin in their on-screen reports.
We can see very clearly that two different approaches were taken by Douglas Fraser who applied critical scrutiny to only one side. In the same Reporting Scotland item Better Together head Alistair Darling accused Alex Salmond of inflating oil reserves by a factor of twelve – something that is demonstrably untrue, yet at no point did anyone at the BBC challenge Darling.
Raymond Buchanan very deliberately sought to conflate a draft report into renewable energy with the oil and gas sector. Viewers were helped make the link with the careful placement of Scottish Labour’s former leader Iain Gray.
Reporting of this nature cannot take place without the approval of higher management.
It’s further proof, if any were needed, that there exists in the BBC in Scotland right now, people in authority who are abusing their positions within the broadcaster in order to pursue an anti-independence agenda.