Letter from Edinburgh 11.09.09
This week Aberdeen is centre of the universe with Offshore Europe in full swing. Everyone who is anyone is exhibiting, networking or on a mobile phone out in an enormous barn at the Bridge of Don. The show is now so big that the barn isn’t big enough – there are tents the size of our sheep shed as well.
Alistair Carmichael and I visited on Tuesday taking in a briefing from Total on the Laggan gas field plus the impressive Shetland stand, complete with official photographer David Gardner. The leader of Aberdeen City Council admired the Shetland stand, telling me that what Shetland had he wanted for the next exhibition.
As oil moves through $70 a barrel or, as we really should put it, £1.18 at the Lerwick pumps, the industry is upbeat. But the price of oil is the ultimate in double-edged swords. We want investment at Sullom Voe, the new Laggan field developed and the work and jobs that go with a successful industry. Yet we face the costs of travel. Travel that is unavoidable in a place like Shetland whether it’s lambs to the Marts, the kids to school or the run to work. Although higher oil prices do push up the cost at the pump, I still think that the inflated price at the Shetland pumps shows that we get royally ripped of by the distributor. But it’s a rip-off that the government and the regulators just don’t care about.
But the connection I don’t see is between wholesale gas prices and domestic fuel prices. I haven’t seen my bill coming down. Nor have I seen any of the big six utility companies in a price war that helps you and I, the consumer. Yet wholesale gas prices are $15 a barrel. That is much lower than it has been. It makes the Total project a bigger investment decision because, as the company pointed out, the best soothsayers are struggling to predict where gas prices will go over the next 3-5 years. There is apparently plenty of gas swilling around. So why have our domestic heating bills not come down? It’s like the banks. When there are only a few of them, and they are all a little close together, then competition is not quite all that it might be. Many businesses tell me that banks now say “here’s the deal on charges and tough if you don’t like it”. So time for a rethink on how the state reviews the operations of these enormous businesses and their treatment of consumers.
Last note on banks for the golfing fraternity. The famous and beautiful Loch Lomond golf course near Glasgow is in financial trouble. It’s now effectively in the hands of its bank – the Bank of Scotland. As you and I the taxpayer own the Bank of Scotland, that makes Loch Lomond a municipal course – a bit like the Knab! So anyone should be able to pitch up and play. Well there is no harm in trying!
Tavish Scott MSP