Where’s the money? Scotland bets on North Sea oil, even as the wells start to run dry

Clara Peller was an advertising gem with her “Where’s the beef?” line. Scotland should ask the same question before voting to secede.

The discovery of oil deep beneath the waters of the North Sea has made this ancient port city an energy boom town, with some of the highest wages and lowest unemployment rates anywhere in Europe.

Now, leaders of the campaign to break from Britain in a Thursday referendum are counting on the spoils of “Scotland’s oil” to help spread prosperity across their newly independent nation, funding schools, health care and social welfare programs. Scottish First Minister Alex Salmond has promised an oil fund, modeled on Norway’s, to ensure that the country’s wealth is broadly shared.

But in the final days before the vote, that vision of a progressive and egalitarian society built on a foundation of black goo is coming up against the hard reality of energy economics: After four decades of relentless pumping, the North Sea reserves are long past their peak and could be headed for a steep decline.

Diminishing production means that even if Scotland breaks free from the rest of Britain with Thursday’s vote, it may be too late to reap most of the gains. And instead of coming out ahead, the fledgling nation could have to contend with a gusher of red ink.

“The early to mid-1980s was when Scotland would have done extremely well if it had had all the oil,” said John McLaren, an energy economist with Fiscal Affairs Scotland. “But there’s no prospect of it getting to anything like what it was in the past.”

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