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Brexit and Peak Oil

Public Policy
Authored by Haley Zaremba via OilPrice.com,
The uncertainty of the future of Brexit has left the United Kingdom’s economy in stagnation as business investment falters on the eve of the nation’s December general election. While Boris Johnson tries to rally voters to instill their confidence in him to usher in a new era of economic prosperity and growth in Britain by way of leaving the European Union at any cost, the economy is, in fact, doing just the opposite. This is just one of the great ironies of Brexit, the separatist movement that just can’t seem to cut the cord.
“British business investment has fallen 1.1 percent since the June 2016 Brexit referendum, and analysts warn that it could cause long-term damage to the economy,” according to reporting from Al Jazeera this week.
For the sake of comparison, “over the same period, business investment in the other Group of Seven (G7) big industrialised economies has risen 10 percent, with the United States posting an increase of 13 percent.”
That being said, low confidence in investment sectors and a general air of risk aversion is certainly not limited to Great Britain. The Al Jazeera report continues, “the International Monetary Fund says China-US trade tensions are hurting investment globally. But Brexit uncertainty threatens to turn the UK problem into a crisis.” The crisis is already beginning, as weak investment patterns have already make the UK’s economy too at risk for inflation for the central bank to be able to stimulate it by cutting interest rates, according to a representative from the Bank of England.
All of this will have major implications for the oil industry in the UK’s North Sea, from the obvious impacts of economic slowdown on the domestic energy sector to the added uncertainty of Scotland potentially splitting off from the UK to stay in the European Union.
Back in 2014, Scotland voted (by a thin margin) to stay in the UK but the issue has since been complicated by Brexit back-and-forth. In the original Brexit vote way back in 2016, every single voting district in Scotland voted to stay in the EU. Now, the Scottish National Party is “gunning to retake districts it lost in 2017’s snap election by calling for another independence referendum” according to reporting by Bloomberg Businessweek, in an article that proclaims “The End of the United Kingdom May Be Nearing.” What’s more, hardline Brexiteers and Johnson supporters have made it clear that the loss of Scotland (and/or Northern Ireland) is a price they are more than willing to pay for secession from the European Union.
(Click to enlarge)
If Scotland does decide to break away from the UK definitively, it would make major waves in the North Sea drilling industry (pun most definitely intended). In the extremely possible scenario of an independent Scotland, if operating costs or ease become compromised or complicated, it is likely that many North Sea oil producers would very soon opt to take their business elsewhere. Back when this concern first surfaced in 2016, CEO of oil and gas company Petroplan Andrew Speers told CNBC that “Many of the operators and service companies [in the North Sea] with Scottish operations are global by nature and the most important thing is Scotland remains an easy and profitable place to do business.”
At the same time, however, there were some experts that speculated that the opposite could be true, and that an economic slowdown could ultimately be a boon for UK oil producers thanks to a deflated pound sterling. “For those in the U.K. and those producing oil in the U.K. North Sea, the weaker U.K. currency will reduce costs because operating costs are paid in pounds but the product (oil) is sold in U.S. dollars,” IHS Energy director Spencer Welch told CNBC. These concerns and hopes are still as valid now as they were in 2016, as Brexit still hangs in the bureaucratic balance.
In August of 2018 OilPrice published a report titled “What Would A Hard Brexit Mean For British Oil?“ when “deal or no deal?” was the biggest question in the Brexit bulletin. The answer to this question, in a nutshell, was (and is) that “the taxes on international trade that will be brought in swiftly by a “no-deal” Brexit will be a huge blow to the region’s oilfield services exporters in particular, as well as to industrial exports in Scotland and the rest of the UK to a slightly lesser degree. In particular, the subsea technology located in the UK’s north east region would be highly impacted. […] There’s also a danger of too much demand for skilled workers, as the right of EU workers to practice their trades in the UK is only preserved until 2020.”
Now, a year later, the situation is even murkier than a year ago, as whether Brexit will happen at all being called into question in light of the impending general election. As Al Jazeera summed it up, “what’s more, the opposition Labour Party has raised the prospect of more uncertainty. If it wins on December 12, it would try to strike a new exit deal and hold another referendum, throwing the Brexit question up in the air yet again.”
Ultimately, the story of Brexit is that the more things change, the more they stay the same. Despite all the bluster and upheaval, the ousting of Theresa May and the raucous rise of Boris Johnson, the yes-deal, no-deal, and forced deal proposals–Brexit remains in much the same place as it was in 2016, when the referendum was first passed, and so too does North Sea oil. When everything is uncertain, however, it’s not exactly business as usual. It’s business with nagging uncertainty and an air of doubt, both of which are ultimately fatal for economic growth.
What ‘s more, with the complexity of modern transnational supply chains, nothing is simple and absolutely nothing is isolated. This has led to hesitant investment in a great number of UK industries including North Sea oil, since, as the UK’s Press and Journal puts it, “with Brexit looming, the North Sea supply chain is only as good as its weakest link.” The article goes on to say that “key factors such as licensing and taxation of oil and gas exploration, development and production activities are already UK government responsibilities, while the legal and regulatory regime under the Petroleum Act 1998 is generally regarded as satisfactory. […] While expectations for this year are optimistic, the added complication of Brexit could impede recovery. As a consequence of the downturn the market is now oversupplied, except in a few specialised areas.”
As long as Brexit drama continues, uncertainty and a lack of trust in the British economy will continue to fester, continuing the cycle of economic downturn and inflation in the UK. This means that North Sea investors, one of the UK’s more important economic sectors, undoubtedly see the writing on the wall and are already looking for foreign failsafes if they haven’t secured them already.


23 Comments on "Brexit and Peak Oil"

  1. Richard Guenette on Sun, 24th Nov 2019 4:40 pm 

    There are a lot of untapped oil and gas reserves in our world. Peak Oil is a hoax.

  2. Davy on Sun, 24th Nov 2019 9:26 pm 

    Richard,
    Fuck off you stupid cunt.

  3. Davy on Sun, 24th Nov 2019 11:21 pm 

    Oops, sorry y’all. I got real triggered and all again and used the cunt wurd. The cunt wurd is a real bad cussin wurd. That makes me feel real tough and such.

    But we all no i’m still the same old whining widdle dumbass geriatric pussy.

  4. JuanP Trash on Mon, 25th Nov 2019 3:39 am 

    The shit show goes on and on with stupid.

    This is stupid:
    full woke supremacist muzzies jerk maximum newspeak double rainbow all the way across the sky so intense whoah it begins to look like a triple rainbow what does it mean WDIM said Muzzie destroyed liquor store in Germany Muzzie FG…

    Davy said Oops, sorry y’all. I got real triggered and…

    Davy said Richard, Fuck off you stupid cunt.

    More Dumbass Davy Insanity said makati1 and JuanP on Sun, 24th Nov 2019 8:24 pm

    Davy said For anyone that cares. I’m gonna cry my widd…

  5. Davy on Mon, 25th Nov 2019 4:00 am 

    RICHARD GUENETTE:

    Insert all of your verbiage forcefully up the butt and through your penis.

    Get it? Got it? Good.

  6. supremacist muzzies jerk on Mon, 25th Nov 2019 4:05 am 

    ALL of YOU are fuckwitch, poo poo breath, pee pee head, bugger brain, diarrhea eyed, cuntface, humper pumpers, DavyTurd Blossoms.

    Get it? Got it? GOOD.

  7. Davy on Mon, 25th Nov 2019 4:11 am 

    Do other people notice my entire life is spent on PO.com when I’m not working full time 24/7 on my multi-rotational, goat and cattle, REAL Green, make believe doomstead when not tending to the old lady’s hot flashes in Italy during the summer months when it’s too damned hot and humid in Missery despite running my REAL Green central air conditioning units.

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  8. JuanP ID theft on Mon, 25th Nov 2019 4:38 am 

    Stupid is up but MF, he just went to bed. Stupid you should realize that your sleep paterns are a mess. Go talk to somebody at Douglas Gardens. You need help you are going off the deep end. We have been watching this now for two years. Sad but you deserve it.

    This is stupid:
    Davy said Do other people notice my entire life is spent on…

    supremacist muzzies jerk said ALL of YOU are fuckwitch, poo poo breath, pee pee…

    Davy said RICHARD GUENETTE: Insert all of your verbiage forc…

  9. Davy ID Theft on Mon, 25th Nov 2019 5:55 am 

    Stupid is up but MF, he just went to bed. Stupid you have been posting continuously for the past 24 hours. You should realize that your sleep paterns are a mess. Go talk to somebody at Douglas Gardens. You need help you are going off the deep end. We have been watching this now for two years. Sad but you deserve it.

    This is stupid:

    JuanP ID theft on Mon, 25th Nov 2019 4:38 am

  10. Cloggie on Mon, 25th Nov 2019 3:36 pm 

    Labour makes big mistake:

    https://www.dailymail.co.uk/news/article-7724299/Labour-hints-agree-Scottish-independence-vote-SNP-FAILS-majority.html

    “Labour hints it could agree to a Scottish independence vote that could break up the United Kingdom even if the SNP FAILS to get a majority in Scottish elections in 2021”

    An English vote for Labour means a vote for the breakup of the UK.

    https://www.dailymail.co.uk/news/article-7723789/The-Tories-Vicks-inhaler-unblocks-nostrils-Welsh-dragon-says-Johnson.html

    “Tories are set to win a 68-seat majority at the general election – but see their poll lead SHRINK in a warning sign to Boris Johnson after his ‘safety first’ manifesto launch”

    Brexit has become a lot more likely.

    Good.

  11. Cloggie on Mon, 25th Nov 2019 3:47 pm 

    https://www.rt.com/news/474240-pakistan-norwegian-ambassador-koran/

    “Pakistan summons Norwegian Ambassador amid outcry over Koran burning at rally in Kristiansand”

    Direct after the onset of CW2, the US-leaning liberal “elite” in Europe will be taken to task.

    Could hurt a little.

  12. Cloggie on Mon, 25th Nov 2019 3:52 pm 

    “Wexit: Alberta’s frustration fuels push for independence from Canada”

    https://www.theguardian.com/world/2019/nov/25/wexit-alberta-canada-independence-separatism

  13. Nostradamus on Wed, 27th Nov 2019 9:16 pm 

    I tossed a couple of Korans and some Pakistani flags into my wood stove. The heat they give off is keeping me nice and warm. I’m looking forward to Peak Islam in the near future.

  14. Cloggie on Thu, 28th Nov 2019 3:30 pm 

    Channel 4 general election climate change debate. BoJo and Farage were not interested to participate and were lovingly represented by ice sculptures (nice touch, Channel 4):

    https://www.youtube.com/watch?v=_-DUD0qKJ9o

  15. Cloggie on Thu, 28th Nov 2019 3:51 pm 

    https://www.youtube.com/watch?v=0M04Cqc7MTc

    George Galloway against (((“Lord” Sugar)))

    There is quite some encouraging resistance brewing there in Labour. Fascinating.

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    I can tell you more about HideMyAss VPN after reading https://fivebestvpn.com/review/hidemyass-vpn-review/. It’s really important to know

  17. Cloggie on Fri, 29th Nov 2019 11:48 am 

    Brexit Party unmasked:

    https://twitter.com/ArminiusThe/status/1200096159999631360

    “EU is racist and too white and needs more diversity”.

    Retweeted by EU fan and white nationalist Richard Spencer.

    Brexit was indeed about halting immigration, WHITE immigration, that is and increased English-speaking dark immigration. The English are even more hopeless suicidal than Americans, the gold-standard of hopelessness.

    Whatever lads, just go:

  18. Cloggie on Fri, 29th Nov 2019 1:55 pm 

    “Boris Johnson’s promises a ‘buy British’ rule after Britain finally leaves the EU and rules out a fuel duty increase to boost businesses after Brexit”

    https://www.dailymail.co.uk/news/article-7738771/Buy-British-Boris-Johnson-vows-make-public-sector-homegrown-firms-Brexit-election.html

    I’m confident that the Indian-made Tuktuk will pass as British. BMW is too white, too racist, according to Brexit Party wisdom.

    https://youtu.be/7y93MYaTx6M

  19. Cloggie on Fri, 29th Nov 2019 4:43 pm 

    Guardian: “EU too white” and with Brexit it is going to be “worse”:

    https://www.theguardian.com/world/2018/aug/29/eu-is-too-white-brexit-likely-to-make-it-worse

    All 28 commisionars are white and of 751 parlamentarians, only 3 (three) are non-white.

    Outrage!

    ROFL.

    Get lost, Guardian!

  20. Cloggie on Fri, 29th Nov 2019 4:50 pm 

    Now a 2nd Brexit Party idiot lashes out against “racist EU”:

    https://www.yahoo.com/lifestyle/brexit-party-mep-matthew-patten-eu-institutionally-racist-075819255.html

    “Brexit Party MEP brands EU ‘white slave masters’ who only let black people in to clean toilets”.

    Anglos, the world’s globalists and volunteers to carry out the kosher agenda, at the cost of their own demise.

  21. Cloggie on Sat, 30th Nov 2019 12:39 am 

    “Deplorables: Trump, Brexit and the demonized masses”

    https://youtu.be/afMofYie4Lc

    Real system change coming up. The empire is going down. White America on the verge of revolt.

    https://youtu.be/MA9aSvHzEIU

    Van Jones and his heartfelt and iconic “this is a whitelash” comment during the election night. Exactly right!

    2016 was the onset of real change in North-America, namely the realization that “race is real”, no matter how much jewish oligarchs shout “racism!” through their media.

    According to Salon, 70% of the Americans expect civil war. Even the president has warned against it.

  22. Cloggie on Sat, 30th Nov 2019 6:05 am 

    Brexit, what Brexit?

    https://www.dailymail.co.uk/news/article-7741155/Boris-Johnson-danger-mirroring-Theresa-Mays-collapse.html

    “Boris Johnson ‘is in danger of mirroring Theresa May’s collapse’: Tory fears of an election meltdown that echoes of 2017 grow as the PM’s predicted Commons majority plunges from 80 to just 12 seats in a week”

    Theresa May in 2017 called for a snap-election based on favorable poll-data, only to end up with a reduced “majority”.

    Could happen to BoJo as well. Reason?

    Britain now 47-41% AGAINST Brexit:

    https://yougov.co.uk/topics/politics/articles-reports/2019/11/19/political-trackers-18-19-nov-update

    Note, Britain is the most Euro-skeptic country in Europe. For all those who can’t wait to see the EU fall apart.

    P.S. I do not want to suggest that the British (English rather) are loyal Europeans. They do (correctly) fear though that acting on their innate anti-European sentiment, certainly at this particular point in time, could play out badly for them, economically and geopolitical.

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