Peak Oil In Scotland  

Jeremy Leggett was one participant in the recent BBC story "Truth, Lies, Oil and Scotland" - but he wasn't too impressed with the outcome, as explained in Seas of plenty?.

A BBC documentary implied that Scotland has plenty of oil and gas in reserve. It should never have been screened.

The peak-oil debate is a high-stakes game. In an economy as oil-addicted as ours, we cannot afford to bet that oil supply will continue to meet demand and be wrong.

This week, BBC Scotland produced a classic example of how the media has (mostly) failed to serve the debate well thus far. In a one-hour TV documentary, Truth, Lies, Oil and Scotland, BBC business correspondent Hayley Millar managed never once to mention that oil production in the North Sea peaked nine years ago and has fallen steeply ever since.

The impression the film sought to give was that there is still plenty of oil offshore, and that the technical advances the oil industry has made since production began in 1979 mean a thriving future for the industry. Viewers would have come away with the impression that plentiful oil supplies are available to Scotland for decades into the future. The headline on the BBC News website reinforces that impression. It reads: "Oil price rise brings industry boom". The long website article by Millar, like the TV programme, does not bring up the fact that North Sea oil has long since peaked, much less that current oil production is almost half the production achieved at the peak in 1999.

"The more I've investigated, the more lies I've laid to rest", said Millar, wrapping up the programme. One lie, presumably, was my prediction – aired early in the programme – that global peak oil would happen in 2010, plus-or-minus two years. The evidence I cited was flow-rate data from reported oil-industry projects. This was laid to rest by an assertion from Peter Odell, an economist, who said that proved reserves hold at least 44 years of supply, and by Malcolm Wicks, the energy minister, who volunteered that he has been told by other energy ministers – from Opec – that oil supply really isn't an issue.

Let us hope that Wicks's trust in Opec proves justified, because many peak oil advocates worry that Opec has overinflated its supposedly proved reserves by at least 300bn barrels, more than a quarter of the global total. If that is correct, it also makes a nonsense of Odell's confident assertion about reserves.

Another point made by Millar involved "following the money". Her thesis here was that if people are investing in the North Sea, there must surely be plenty of oil left. She made much use of a cheerful gentleman from Shell as an interviewee in this regard.

Neither he nor she mentioned that Shell have scaled back their operations in the North Sea considerably of late. BP's retreat from the North Sea wasn't mentioned either. The viewer would have had no idea that investment in the North Sea dropped as a whole last year, according to the industry's own trade association, UK Oil and Gas. Or that the prime minister has recently been pleading with the oil companies to invest more of their profits in the North Sea. Or of a key reason for all this: that the amount of oil and gas produced per pound invested is collapsing. Today it is a third of what it was just five years ago.

The graphic below shows production from the largest North Sea field, known as "Forties". Apache bought this from BP a few years ago and has had great success in increasing production. The graph shows just how relative "great success" really is though.