Scotland’s islands sense opportunity in independence debate

Oil and gas a powerful motive for island autonomy

The Stena Carron oil drill ship, moored at Lerwick, Shetland Islands.  Scotland’s oil and gas riches are playing a major part in the independence debate. Photograph:   via Getty

The Stena Carron oil drill ship, moored at Lerwick, Shetland Islands. Scotland’s oil and gas riches are playing a major part in the independence debate. Photograph: via Getty

Thu, Aug 8, 2013, 01:00

For nearly four decades, the Shetland Islands have been linked in the public’s mind with oil, a community that has done well from the exploration of the deep waters of the North Sea.

However, the proximity of oil fields does not bring with it cheap petrol. On the road into Lerwick from Sumburgh Airport, the local filling station advertises petrol on sale at 150.9p (175.5 cent) per litre and that is with a 5p subsidy offered to the Scottish Highlands and islands by the British government.

The higher prices faced by Shetlanders highlight their isolation; but, equally, it illustrates the distance, both physically and metaphorically, that many on the Shetlands, the Orkneys and the Western Isles, feel from Edinburgh, not just London.

With little more than a year to go before the September 2014 Scottish independence referendum, the islanders, who have begun work jointly on an “Our Islands, Our Future” document, sense an opportunity for concessions now exists.

“One thing that is absolutely clear about the referendum is that regardless of the result there will be some degree of constitutional change,” says chairman of the Shetlands Islands Council Gary Robinson.

New tax rules
The early ideas include demands for control of the sea-bed around the islands, which would allow revenues currently paid to the Crown Estate to be channelled into local needs, ones decided by locals. Orkney, which is rapidly becoming a world-class hub for tidal and wave energy, wants new grid connections to the Scottish mainland, even though those very connections are deeply unpopular with mainlanders as the high-tension cables make their way south.

All agree new tax rules should be put in place to ensure the islands benefit directly from renewable energy projects, such as the deeply-contested 100-turbine project proposed for Central Shetland. Last month, Scottish first minister Alex Salmond offered “the Lerwick Declaration”, saying it was “obvious” the Scottish National Party, since it believes that Scots should run Scotland, favours local decision-making.

In the eyes of opponents, however, the SNP’s performance in office, an effective one even in the eyes of many of its enemies, has been about bringing power to the centre, not decentralising it, notably the merger of all of Scotland’s police forces into one, along with fire brigades.

However, justice minister Kenny MacAskill is unrepentant, arguing that the changes made were the only way to ensure budget cuts enforced by London did not impact on front-line policing.

Scotland’s oil and gas riches are playing a major part in the independence debate, with supporters and opponents of the referendum arguing bitterly over how long they will last, how much they will contribute to coffers, or how much of them Scotland would control afterwards.

For Shetlanders, the issue is particularly acute. When North Sea oil first began to come ashore in the mid-1970s, the islands enjoyed a bonanza, though locals were conscious it was one that would end, given the 25-year lifespan predicted for the fields back then.

Today, production is falling, but islanders believe there are now decades worth of production to be harvested in ever-more dangerous waters “west of Shetland”, as it is termed, while the decommissioning of existing oil and gas platforms offers newer, even more long-lasting , work.

Nest egg

Despite initial opposition, the oil and gas companies of the 1970s were eventually persuaded to make payments directly to the Shetland community up until 2000, which today has left islanders with a £200 million (€232 million) nest-egg.

However, even the Shetland Islands are not immune to harsh economic realities, which have forced the council – which once was responsible for more than a quarter of the islands’ total output – to lay off staff.

Some of the spending cuts are novel. In June, 17 housing estates had public lighting switched off, with lamp-posts removed – all in response not to the diktat of council officials, but, rather, a demand by locals. “Up here, people think it should be dark when it should be dark,” says Ian Brown, the chairman of the local branch of the Federation of Small Businesses, dryly, “People quite like being able to see the stars, when there isn’t any fog, of course.”

Currently, Shetland is enjoying a mini-boom, due to the construction of a new gas terminal by the French oil giant, Total, with four-storey high accommodation barges brought in to house 800 building workers, including one that occupies much of Lerwick’s dock.

The Total terminal in Sullom Voe – where BP first began operations in the mid-1970s – will begin to accept gas from the Laggan and Tormore fields 125km north-west of Shetland in early 2014, before sending it on to Total’s terminal near Peterhead on the Aberdeenshire coast.

Seafood industry

The local froth in the housing rental market – a cause of irritation for many – will continue for some time, however, since BP is set to spend much of the next five years upgrading its own terminal at Sullom Voe to deal with the expected riches from the Clair Ridge fields west of Shetland.

Acknowledging the importance of oil and gas, local councillor Alistair Cooper emphasises Shetland’s seafood industry, “one that is worth £310million a year, when oil and gas were only worth £45 million before the Total contract kicked off”.

“All of that depends critically on clean waters and the perception, just as importantly, that they are clean. In 2011, the Shetland economy was worth £1 billion – a third of that was down to seafood. That’ll tell you how important it is to us.”