One Hundred Thousand Welcomes - The Kingdom Of Fife

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I doubt if I could ever be described as one highly interested in politics and despite the obvious effects that it has on all of our lives. These days, it seems to centre around 'career politicians' rather than the experienced businessmen of yesteryear who typically occupied the leather seats in the House of Commons during the Victorian era. I mention this because I received an unsolicited  telephone call from a prospective candidate in the forthcoming elections and where she asked if there were issues that concerned me. She asked the questions and I answered them but in retrospect, I feel the interview should have been the other way round and in which I should asked about her background, experiences and why she ought to expect my vote and support. Perhaps, I was supposed to know this already or else seek it out on the Internet? Even worse, as a local businessman, isn't it a bit late in the day to be asking such questions? Canvassing isn't what it used to be but one can never instantly reply to a note pushed through the letterbox. Frankly, I had the 'golden opportunity' but I blew it in fine style and largely because my mind was focused on the latest project schedule connected with my business and was still working on long after regular hoursand akin to so many other business associates that I meet on a regular basis. It's astounding how many clients that I can call in the evening and know for certain that they, like me, haven't left the office! I sincerely doubt if this is equally true of most politicians, councillors or other government operatives elected into their position and guaranteed payouts and enhanced pensions. In closing, I truly want to know who and what I am voting for. Is that so difficult to deliver without hyperbole and distortion of irrefutable factual evidence?

Editor, FifeServe.Com 


North Sea Oil Rig
North Sea Oil On The Rocks
In my youth during the 1960s, the professions associated with household fitted carpeting, cavity wall insulation; double-glazing, central heating and a lot more lay in the future. At school, educators reliably informed students that the Solar System had nine planets. Not so, say the scientists of today. These days, the popular evaluation lists eight large planets with a few dwarf models thrown in. Predictions of safe and cheap nuclear energy abounded and described how each community might have one power station fitted into the same space as an average tennis court. We were reliably informed by our educators that about one third of all crude oil resources in the World had already been consumed. By the millennium, the most sought after resources on the planet would be exhausted. Luckily, these prognostications have been wildly inaccurate! In modern times, the converse is closer to reality and due to the applications of new technology.

Politics And Hydraulic Fracking

Fifty years ago, the bulk of the Global Oil supply originated in the Oil Producing Export Countries) (OPEC) and this provided each state with a vote as regards fixing the price of oil and the amount of supply. Progressively though, other nations invested as the prices rose and made such investment worthwhile. In the United Kingdom, North Sea Oil came ashore for the first time in 1978 and where it had the marked effect of strengthening the pound sterling. By the millenium year of 2000, the best years of North Sea output had peaked and begun to decline. A similar plight befell the Oil Production industries of the United States during a similar period of time. By 1998, US oil demand was rising at 7% per annum while local production was falling at 3% per annum. On a visit to Texas, this author saw several examples of 'played out' oil wells in the state and where there might be hope of revival in the shape of a controversial technology called 'hydraulic fracturing' but better known in common parlance as 'fracking'.

Fracking isn't new! It was first proposed by Floyd Farris of the Stanolind Oil and Gas Coproration in 1947 and where a commercially viable oil rig using this technique was employed.
The difference in modern times is the widespread degree to which it is being accepted despite predictions of ground water contamination and even earthquakes. Despite this, a few countries have extensively used this practice to renew their own local oil production capabilities.

As of 2013, the United States leads the way having started 'fracking' on commercial scales since 1949 and where around two million oil sites have been subjected to this technology. About 43% of local oil production and 67% of local natural gas supplies are generated by this means. There are more than a million US workers employed in the industry and it is believed that the US need for oil importation is minimal as a consequence. Problems began to emerge in the 1980s but this hasn't stopped wider application of the technique. In 2012, the USA had 1919 operational oil rigs.

British onshore and offshore oil rigs have been using 'fraking' since the 1970s with few incidents of environmental damage being reported. Despite this, the European Community Government has suggested careful regulation of the industry and it's probable that many more sites in the UK will be granted licenses in the wake of this advice.

In Canada, fracking in Alberta began in 1950 and has been steadily spreading ever since. Many of the Canadian oil wells would not be commercially viable without use of fracking. In 2012, Canada had 356 operational oil rigs. New Zealand's Taranki region has had oil wells using the technique since 1993 and where fears about the environmental effects have been carefully monitored without any sign of dangers or contamination. South Africa is the latest country to adopt the technology as of 2012.

Fifty years ago, the main oil exporting countries were largely based in the Middle East but not exclusively so. Libya in North Africa and Venezuela were the principal exceptions. In the past fifty years, the USA has become virtually self sufficent in oil and the United Kingdom and Norway have invested heavily in offshore oil rig technology. Nigeria in Africa has become an expanding entrant and exporter while a substantial part of the Russian economy relies on oil and gas exports.

Overall, this has led to a glut of crude oil in the global marketplace and where prices have been falling to dangerously low levels. Hooray for the motorists and the manufacturers of the five thousand basic products made from crude oil but the flip side for North Sea Oil and the British economy is alarming.

The OPEC And North Sea Challenges 

It remains true that many OPEC nations rely heavily on their oil production activities and exports and the continuing decline of this revenue in recent decades has prompted them to consider and enact a plan with the intent of regaining the control of oil prices that they have progressively had less influence over in recent years. In this, they are greatly aided by the fact that most OPEC installations carry far less operational costs than many of its competitors. This allows exporters like Saudi Arabia, by example, to undercut the prices quoted by  their competitors and to a point where the competitors cannot match these prices and to a point where operating viability becomes threatened. The objective is to put such companies out of business, reduce the competition and reintroduce scarcity of supply. OPEC would then be in an ideal position to influence supply and prices again. In short, they're willing to accept low prices in the short to medium term while others cannot survive in the marketplace.

This is bad news for the North Sea Oil Producers. Whilst crude oil has different values according to quality and largely dependent upon refinery distillations, Brent crude, extracted from the North Sea, is typically regarded as one of the finest. Just a few years ago, Brent crude regularly fetched $110/barrel and at the higher end of the scale, In recent times, the price has tumbled to about $40/barrel or even lower and causing profit margins to virtually disappear. Shell recently cancelled a three year order from the North Sea despite a hefty multi-million clause in the contract. The exploration of the 'Clair' field has been cancelled and many North Sea Operators have introduced new work practices to reduce costs and staff numbers. Oil rig workers have even suggested to this author that the quality and quantity of food given to the workforce has declined markedly with many of them already informed of major lay-offs occuring between now and April 2015. Much of the workforce has already begun to seek employment elsewhere and it's been suggested to me that several oil rigs are being made ready for moth-balling and exodus in advance of the UK General Election in May. Coincidence?

Whilst the mass redundancy listed in four figures across the board continues, the knock-on effects are incalculable. What will be the effects on Grangemouth and Aberdeen? The hope is that the price will rise gradually later in the year with prices of around $60/barrel yet still making it a tight squeeze on profits from North Sea Oil. In Scotland, and where the recent 'independence vote' favoured 'no', we might just have dodged a bullet by the narrowest of margins! All of this might yet severely impact upon the Scottish economy more than other regions of the United Kingdom.

Of course, such dire circumstances are never fully recognised at the fuel pump on the forecourt on account of the high levels of taxation applied to petrol and diesel. A visit to the PetrolPrices web site (www.petrolprices.com) illustrates just how little the garage forecourt owner gets in exchange to run his or her business. These days, they get more selling sweets, coffee and newspapers!

Motoring fuel costs are currently around par with that of 2010 but the rebound is coming. Investment clubs are already forecasting a slow yet certain return to former levels.Enjoy the cheaper fuel while you can but be wise and get ready for the new additional costs that must be applied in the future,

Drink Drive Levels Were Reduced from December 5th 2014 in Scotland
 
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