Banks Held To Account 2!

Former Prime Minister could face 2 years in prison for his role in the financial crisis.

No, not Gordon Brown but there's time yet as he is not only culpable but could be argued to be one of the masterminds of the financial crisis. Little Iceland, according to today's Huffington Post, is showing the way ahead for democracy:

Geir Haarde, Iceland Ex-PM, Indicted For Role In Financial Crisis

And just so to make Mervyn King sweat, Iceland's central bank chief has been heavily criticised in the commissions report which has lead to the 'indictment' of the ex-PM:

Pall Hreinsson, the supreme court judge appointed to head the Special Investigation Commission that issued the report, singled out seven former officials including Haarde and central bank chief David Oddsson for particular criticism.

The islanders have stood up to the international banking cartel that want the citizens of the islands to pay for the fraud of private bankers. Don't want the Icelanders repudiating the debts and making the banks responisble - that might set an ugly precendent! The banks in Iceland were encouraged by the CIty and Wall St. to partake in derivatives fraud. When it all went wrong British and Dutch banks who were owed money by Iceland's banks wanted to hang the debts around the necks of citizens. Unlike Britain, Ireland and others who accepted the bankers' debts meekly as though having their wealth stolen was neither here nor there.

Icelanders want to see the extradition of former chief bankers to Iceland but last I heard the most wanted was in Britain, living it up, courtesy of Gordon Brown's protection. I think we are starting to see why Brown preferred to see the Icelanders take the wrap instead of the bankers.

Banks Held To Account!

As 'austerity' otherwise known as cuts kick in, people are going to be looking for the real culprits. Ireland is ahead of Britain in the game of cuts. If you want to know what's starting to happen here in a few months, look to Greece and now Ireland.

A driver of a cement mixer drove his vehicle into the entrance of the Irish parliament - Dail Eireann - blocking the way in. To stop police accessing his cabin the driver welded his doors shut and covered his windows with grills. The driver was protesting at Ireland's parliament discussing bailout legislation and that day the trade-unions were planning to march on the gates. Read the article by ABC News here.

PLUNDER: THE CRIME OF OUR TIME

What were Britain's banks involved in that caused Britain to go under? The same as the American ones. And Gordon Brown facilitated the whole thing. Now, you have to foot the bill, if your docile enough to go along with it!

Here it is nicely explained in a video excerpt by DANNY SCHECHTER, the rich man's Michael Moore!

Scotland On The Map

Here is part 3 of my Newsnet Scotland series:

Rediscovering Oil – A From Rags to Riches Story

by Alex Porter

Part 3(of 3): Scotland On The Map

The bankruptcy of the British state and financial sector means Scottish unionism must explain to the Scottish electorate how the British economy offers them an attractive future. That is not how unionists and their friends in the Scottish media will want the debate to be framed and they will push back. What will keep them on the defensive though is a Scottish electorate which has come to accept implicitly just how prosperous oil would make an independent Scotland. How is that going to pan out then?

What does realise the nationalists’ wildest dreams is not the story of how oil can enrich Scotland or has enriched Britain. We know how that story can be made to go away. No, it is the rapidly emerging international story of how falling oil production is threatening international security that will alter the Scottish electorate’s perceptions of the possibilities that oil offers.

Global oil supply is starting to decline. As we have seen, oil is central to every economy’s ability to grow. The fact that the world has exceeded the top limit for oil extraction is deeply concerning all nations and the subject of ‘peak oil’ is now rapidly ascending the global political agenda.

As a serious, oil producing player then Scotland will suddenly find new friends and ‘peak oil’ will be a regular headline in international news stories. Where international conferences now convene to discuss ‘global warming’, ‘the financial crisis’ or ‘climate change,’ soon ‘peak oil’ will become the big story.

For Scottish unionism, ‘peak oil’ becoming the top story of the international economy is a nightmare. For years they’ve hidden the importance of oil from political sight only to then find that the international media will be ramming it down our throats. The Scottish electorate who were told oil was of marginal import will suddenly realise that oil is not just vital to the Scottish and British economies. No, it’s far more important than that. The subject of declining oil supplies is being globally recognised as the number one priority for the stable functioning and security of the entire, industrial world. Scots will be right in the picture.

Let’s get down to what ‘peak oil’ means then. Peak oil can be defined as a date when oil production reaches maximum production after which production rates begin to diminish. In 2005, oil production stood at 68.5 million barrels per day, in 2005 it was 73.7 million and so far this year daily production stands at 73.4 million barrels per day. In other words, we have reached and perhaps passed ‘peak oil’.

Why is oil so important?

Oil is used in industrial society in a multitude of ways including transport fuel, fuel for industrial machinery, heating fuel, fuel for minerals extraction, lubricants, raw materials, asphalt for road paving, plastics, synthetic cloth, medicines, fertilisers, pesticides, herbicides and so on. When oil runs out many products cease to be made, you can’t have nuclear-powered nylon socks – oil is not replaceable. Peak oil then means less of everything – a lot less.

So, now we know where we are and what oil is used for, what will the effects of ‘peak oil’ be on the industrial world?

Let’s go back to the relationship between oil and money. In industrial society, money provides the incentive to work. Oil provides the ability to get work done or products made. So, when oil runs out money becomes worthless. It is estimated that when an economy has to spend 6% of its GDP on oil, the nation’s economy starts to decline. As populations and demand increase, depleted resources go up in price. Demand then drops off as it becomes too expensive. Oil affects around 95% of the price of everything we buy. Consequently, economic growth will decline. As oil and finance are connected, we will run out of money to buy oil long before oil runs out.

Peak oil then really does change the world and dramatically so. One expert in the field, Dimitro Orlov, explains it well:

“Efficiency, conservation, renewable sources of energy all might have some effect, but will not materially alter this relationship. Less oil means smaller global economy. No oil means a vanishingly small global economy not worthy of the name.” (1)

The good news is that as industrial society declines so too does our energy consumption. With a reduced economy, we have significantly fewer energy requirements. This will puzzle governments, civil servants, investors and analysts who are basing future calculations of energy needs on rising instead of falling demand. It’s only a matter of time before the alarm bells start ringing.

So, when does ‘peak oil’ burst into political life? ..... It already has!

Last week, the German newspaper Der Spiegel published an article based on a leaked report on ‘peak oil’ by the German military. Of the report, Der Spiegel’s Stefan Schultz said:

The issue is so politically explosive that it’s remarkable when an institution like the Bundeswehr, the German military, uses the term "peak oil" at all.

The article summarises and refers to the key points of the German military report and it makes for some interesting reading. In terms of the global impact of ‘peak oil’, it has much to say:

The team of authors, led by Lieutenant Colonel Thomas Will, uses sometimes-dramatic language to depict the consequences of an irreversible depletion of raw materials. It warns of shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the “total collapse of the markets” and of serious political and economic crises.

So, how does the report directly impact on Scotland? One section of the report argues:

‘Increasing importance of oil exporters’: For importers of oil, more competition for resources will mean an increase in the number of nations competing for favour with oil-producing nations. For the latter this opens up a window of opportunity which can be used to implement political, economic or ideological aims. [my bold] As this window of time will only be open for a limited period, “this could result in a more aggressive assertion of national interests on the part of the oil-producing nations.”

For Scotland then this development opens up new avenues for national, self-determination. The Scottish electorate, in the digital age, will not be ignorant of this new international paradigm shift. At the same time the British state will not be ignorant of the threat that Scottish nationalism is to its prestige in the world’s corridors of power.

As for Scottish unionism, this development totally contradicts their core message that an independent Scotland would suffer isolation and a loss of influence in key international institutions like the UN, EU, NATO and many more. As ‘peak oil’ reshuffles the pack, nationalists will argue, with increasing plausibility, that post-independence it is the remainder of the UK which will lose influence not Scotland.

Der Spiegel’s summary goes on and presents a clear vision of why oil producing countries will be so crucial to international security:

‘Market failures’: The authors paint a bleak picture of the consequences resulting from a shortage of petroleum. As the transportation of goods depends on crude oil, international trade could be subject to colossal tax hikes. "Shortages in the supply of vital goods could arise" as a result, for example in food supplies. Oil is used directly or indirectly in the production of 95 percent of all industrial goods. Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain. "In the medium term the global economic system and every market-oriented national economy would collapse."

The evidence is all around. This week Britain’s energy secretary Chris Huhne ordered civil servants to urgently examine the impact of a doubling of the price of a barrel of oil. The Telegraph reports: “A 1970s-style doubling in the price of oil would drain £45 billion from the UK economy in two years, hitting investment and jobs.”

Let’s just say that ‘peak oil’ is not going to be a story that Scottish unionism can bury. The story, like oil, will be all pervasive and will be telepathically transmitted to the Scottish electorate. The viability of an independent Scotland will be beyond question.

A Union in Crisis

The thrust of Scottish unionism’s case has always been that Scotland can not afford to be independent. Its strategies have halted the march to Scottish statehood and sapped Scottish aspiration and self-worth dry. ‘Peak oil’ will soon dramatically change all that. Suddenly, Scottish unionism will look desperate and become increasingly discredited.

It will come out fighting. Scots ‘keeping the oil for themselves’ will be labelled ‘selfish’ but how can a nation of subsidy junkies be stigmatised as affluent and uncaring? And how can a Scotland, long told it is too poor to be independent then be asked to share wealth out of solidarity? Ironically, unionism will be hoist on its own petard.

For the SNP then the priority is simple: The Scottish Government must move the issue of ‘Peak Oil’ up the political agenda as soon as possible. It would, after all, be responsible governance to do so. To achieve this task though calls for a leader who is an effective political operator and with a sound grasp of the economics of oil. History could not have been kinder in delivering, former oil economist, Alex Salmond as the leader of the SNP.

So, ‘peak oil’ puts the question of the economic viability of Scottish independence well beyond doubt. Simultaneously, Scottish unionism has been given the unenviable task of having to prove the benefits of remaining inside a bankrupt union state. It would seem that the economic stars are aligning for the historic cause of Scottish independence.

Source:
(1) http://cluborlov.blogspot.com/

Scotland: The 'Peak Oil' Issue

Peak oil!

Peak oil is a vital issue for international security. As an oil producer Scotland should be having a national debate about what it means for Scotland and about our relationship to the rest of the world in relation to it. If you are interested and want answers to questions on 'peak oil' please email me. At the bottom right of this page you'll find my email details.

We can start an awareness campaign to find out how our London and Edinburgh governments are preparing for it, if at all.

To read about the implications of 'peak oil', I advise reading this recent article by German newspaper Der Spiegel.

For some expert explanation I advise reading this article by Dmitri Orlov.

To research the area an website about oil issues in general (lot's of stuff on peak) to visit is: The Oil Drum. A lot of industry experts post and comment on this website.

Some video information:

Stop Scotland – Britain wants to get on!

Here's part 2 of my Newsnet series:


Rediscovering Oil - A From Rags to Riches Story

Part 2(of 3): Stop Scotland – Britain wants to get on!

The UK government colluded with Scottish unionism on the matter. Why? Because oil could not only make an independent Scotland very prosperous – but it could do the same for Britain as well, and it has. Yet, what former Prime Minister James Callaghan called “God’s gift”, North Sea oil received almost no examination from British economic commentators.

Last November there was an excellent article on the subject by The Telegraph’s Edmund Conway:

What was the industry that powered Britain towards prosperity in the 1980s, and made us one of the most dynamic and successful nations in the Western world?

…If your first reaction was “the City”, think again. The answer is North Sea oil.

…One of the peculiarities of British politics – and economics – is the reluctance to take into account the critical contribution of oil to the economy. We spend so much time droning on about our excessive reliance on the financial sector that we tend to ignore this elephant in the room. But the truth is that, for the past quarter of a century, Britain has been a petro-economy. In 1999, we were producing more oil than Iraq, Kuwait or Nigeria.

…Take a look at the numbers. In 1979, when Margaret Thatcher came to power, the amount Britain owed, as a nation, was £88.6 billion. In the subsequent six years, taxes from the North Sea (which had been pretty much non-existent previously) generated an incredible £52.4 billion.

Smarter observers knew that oil was and is a hugely valuable resource. So the second part of Scottish unionism’s two-pronged attack on the significance of oil was to relentlessly repeat the point that North Sea oil was “a flash in the pan,” it was “running out” and it “wouldn’t last five years.” Under scrutiny this case would easily have fallen apart. However, that would entail Scotland’s unionist and Britain’s media applying said scrutiny. At the end of the 70s, oil, apparently, had little future.

There is now a glut in new discoveries in the North Sea. In June this year, a low profile story on the BBC reported that the company EnCore had discovered 300 million barrels of recoverable oil, and projected that this would rise.

In recent months more finds have been made and last week US news agency Bloomberg reported that BP had confirmed that it would continue to invest £12 billion pounds in North Sea oil extraction over the next 5 years, including drilling a deep-water well off Shetland next year.

However, while North Sea oil has made Britain PLC - with a population of over 50 million - a “petro-economy”, Scottish nationalism has failed to convince the Scottish electorate that with the same revenues an independent Scotland could be solvent.

Scottish unionism, in this regard, has effectively and impressively outmanoeuvred Scottish nationalism.

The power of Scottish unionist tactics has not just been in dumbing down the public debate but in undermining the confidence of nationalists themselves. After all those decades of Scotland being told oil is “running out”, maybe it is, oil is a dead story, economic history, a missed opportunity and no longer relevant to the debate on independence.

In fact, the opposite is true. North Sea oil has never been so important.

To understand the importance of oil you have to understand its relationship to finance. In Britain’s ‘petro-economy’, oil is vital for the future of Britain’s financial sector and currency. Revenues from oil mean business and consumers are taxed less and that stimulates growth. When an economy is growing then investors speculate on it. Why? Well, they know that there’s future income to pay returns on their investments. The financial sector is cock-a-hoop. This explains why the City boomed when North Sea oil arrived. Conway’s Telegraph piece explained the situation:

The benefits went far beyond the public finances. Were it not for the cushion provided by oil exports, the deficit in Britain's current account – its international ledger – would have been one of the worst in the Western world. Moreover, much of the massive rise in business investment in the years before the financial collapse was due entirely to spending in the North Sea.

…In short, without oil, recent history would have been vastly different. Growth would have been weaker, consumer spending less and the public finances decidedly more parlous. That’s not to say Britain would have been an economic pygmy – just that oil is a luxury that has permitted us to live much more comfortably.

Now that the debt crisis has exploded the myth of the City, now insolvent, as Britain’s primary wealth generator and with the UK’s economy bankrupt - through systemic City fraud - Britain’s economic and social life support machine is powered by oil off Scotland’s coast.

So, while in relation to Scotland, the English commentator Ruth Deech felt justified recently on BBC 4’s Any Questions in claiming that: “We’re all subsidising them by way of benefits and all sorts of reasons”, oil in Scotland’s North Sea is in fact, as we speak, keeping Britain’s economic and social structure together.

Tomorrow, part 3: Scotland On The Map

Rediscovering Oil - A From Rags to Riches Story

This week I worked on a three part series on oil for Newsnet Scotland. The first part was published today. Here it is:

Rediscovering Oil - A From Rags to Riches Story

by Alex Porter

In my last Newsnet Scotland article, I argued that the bankruptcy and rapid decline of Britain has transferred, in terms of the Scottish constitutional debate, the burden of proof of economic viability from nationalism to unionism. For nationalists to really ramp up the pressure on the unionist case though, it has to be implicitly understood by the Scottish electorate that independence does indeed offer a sound, economic path to the future.

For the SNP, the trump card in its economic prospectus should have been the enormous wealth being accrued from North Sea oil. Scottish unionism though exploited its institutional advantages and so was spectacularly successful in getting and keeping the subject of oil off the political agenda.

I believe that unionism no longer has that privilege. In the debate over Scotland’s economic future, North Sea oil is about to take the top seat at the table.

How? Oil is about to become the world’s number one subject. More specifically ‘peak oil’ – its effects will alter the course of the world’s history. As a serious oil producer Scotland’s global profile will thrive because of it. The facts will be clear – the oil off Scotland’s shores will be considered important not just for the UK’s economic stability but an important contributory factor in European and international security.

In a short space of time then, the case that North Sea oil is so insignificant as to be of no value to the establishment of a successful independent Scotland will be instantly recognised by the Scottish electorate as what it always was: nonsensical, political propaganda. Consequently, unionism will face a crisis of credibility.

Part 1: Out of Sight, Out of Mind

One question which has puzzled many observers is just how did the issue of North Sea oil disappear off the radar of Scottish economic history? In Norway, any and all oil stories are poured over by their national media. Norwegians know just how important oil has been to their economy and have established an extremely successful oil fund which is being set aside to be enjoyed by future generations. Their finance minister, Sigbjørn Johnsen, was quoted by the Norwegian newspaper, Aftenposten, talking about the oil fund on Tuesday: “It’s kind of like a dream…The size of the fund exceeds the expectations of most of us.”

In pounds, Norway’s oil fund is worth £316 billion which is enough to fund Scotland’s public expenditure for 10 years without collecting taxes. The future is good if you’re Norwegian but if you live in Scotland, with an economy which is in surplus, the future offers debt and massive public sector cuts – which is, in effect another bailout of the insolvent City of London. In terms of economic and social justice, the contrast between Scotland and Norway could not be more dramatic. Last week a hard-hitting new study by the Joseph Rowntree Foundation showed that child poverty in Scotland had increased at double the rate of that for England during the last year of the recession.

While the Norwegian media disseminate the oil story among her prospering population and beyond, in Scotland - a serious oil producer - you hardly hear a peep.

How could that be? The issue of North Sea oil has been brushed under the carpet.

Scottish unionism’s principle strategy against nationalism was in presenting Scottish independence as economically unviable. Scotland could not afford to go it alone. That put the burden of proof of economic viability onto nationalism. The monumental wealth that would come from oil was clear and well understood by unionists; they knew that the enormous wealth flowing in from the North Sea would place the case for an economically viable, independent Scotland beyond reasonable doubt. This contradiction had to be dealt with and ruthlessly.

The UK government had commissioned the now infamous McCrone Report. Its conclusions were astonishing:

“This paper has shown that the advent of North Sea oil has completely overturned the traditional argument against Scottish nationalism. An independent Scotland could expect to have massive surpluses both on its budget and on its balance of payments and with the proper husbanding of resources this situation could last for a very long time into the future.”

The McCrone report wasn’t published until recently (it can be read online). The fact of its suppression though is damning evidence that Scottish unionism was complicit in the betrayal of the people of Scotland for 30 years. A sure sign of where its loyalties don’t lie.

McCrone also concluded that the income from oil meant Britain had to seriously attend to the matter of poverty in Scotland, especially on the West central belt or face a constitutional crisis:

“If, in five years’ time North Sea oil is contributing massively to the UK budget, while the economic and social condition of West central Scotland continues in the poor state that it is today, it would be hard to imagine conditions more favourable to the growth in support of the nationalist movement. Very determined steps to urgently transform economic conditions in Scotland will therefore be necessary and the Scottish people will have to be persuaded that their problems really have received the attention and expenditure they deserve if this outcome is to be avoided.”

This was Scottish unionism’s opportunity to demonstrate that Scotland’s future social and economic well-being were its primary concern. They had the choice; publish the report and eliminate poverty in Scotland or delist the report and carry on as before. The McCrone scandal then shines a very, bright light on the historic loyalties of Scottish unionism and they don’t lie with the citizens of Scotland.

The SNP tried to keep the subject alive with its ‘It’s Scotland’s Oil’ campaign. This worked to an extent, but the unionist media closed down the story. Unionism via the trade-unions and their captured media suppressed the campaign. Oil wealth should be shared and was unimportant anyway so Scotland was informed.

Over the years nationalists have tried to resurrect the story, but always in the context of a hypothetical debate on an independent Scottish economy. The subject of what North Sea oil meant to the Scottish economy was buried in a Whitehall cemetery.

Tomorrow, part 2: Stop Scotland – Britain wants to get on!