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2018 is at the tail of dwindling UK North Sea revenues. Peak is long past. The UK could have achieved a fund with roughly comparable contributions to Norway, bu

2018 is at the tail of dwindling UK North Sea revenues. Peak is long past. The UK could have achieved a fund with roughly comparable contributions to Norway, but obviously across a far higher population. UK and Norwegian production across the years of North Sea exploration has stayed pretty close to each other. In theory with UK production ramping up a little earlier in the seventies than Norway, the same investment choices would have made a UK fund slightly larger than Norway's. From a national perspective it would have been the much better choice to create a national fund in the sixties or seventies, rather than piss it away on nothing as the government actually did.

ChrisLomont 7y ago
>The UK could have achieved a fund with roughly comparable contributions to Norway, If the state took control of all oil revenues, then perhaps. But historically countries with the govt taking over such production have not done as well as those with private enterprise. Norway did well. Venezuela not so much. Middle East not so much. >From a national perspective it would have been the much better choice to create a national fund in the sixties or seventies, How has that action played out across all countries that tried it? Picking one after the fact that did well while ignoring cases where that action didn't do well is not a good way to push future policy.
- NeedMoreTea 7y ago
  > If the state took control of all oil revenues No. Norway's oil fund is the surplus from oil taxes and exploration licences. Doesn't need 100% nationalisation, Venezuela or a command and control Supreme Soviet. The UK Energy Minister proposed a national fund in the sixties, the Treasury agreed, but he was overruled by Cabinet. The remnants of the British National Oil Corporation that was going to be responsible for licences and supply was sold off at huge discount as BritOil in the depth of a recession (now part of BP). > Picking one after the fact that did well Or we could simply look at what the UK actually did with the oil dividend. Then conclude that anything else would have been better for the UK. A national fund with zero growth or investment. A fund that makes a 20% loss every year. Simply spend it all on modernising infrastructure every year. Better still, a national fund with a conservative growth strategy. Ideally split between a global fund (the $1.1tn) and a national fund, as the Norwegians did. Per capita not nearly as much as Norway's $200k each certainly, but $20k per person is hardly chicken feed. Whatever, we'd be far better placed for what comes after the oil. Or have $1.2tn+ to decarbonise the whole economy. Or take some of the load off funding state pensions into the future, with an ageing society... The USA could have achieved a phenomenal fund over the far longer period of US extraction - started in what, the 1890s, who knows what absurd valuation could have been achieved by now. Or the benefits that would bring to pensions or infrastructure.
- eesmith 7y ago
  Which, to go back a few levels, is why I wrote "The thing about Norway is that they were responsible before they were as wealthy as Croesus." and why patfla's comments about the ironies seem unjustified. You touch on some very difficult topics. You are correct that Iran did not do so well after they nationalized their oil production. That's because the UK entered as trade war with Iran, and the US "CIA arranged a military coup to depose the democratically elected Mosaddegh and install a regime more favorable to the UK." https://en.wikipedia.org/wiki/Anglo-Persian_Oil_Company https://en.wikipedia.org/wiki/Anglo-Persian_Oil_Company . Additionally, unlike the UK and Norway, most other oil producing countries were under foreign colonial rule, or recently out of colonial rule.

ChrisLomont 7y ago

>The UK could have achieved a fund with roughly comparable contributions to Norway, If the state took control of all oil revenues, then perhaps. But historically countries with the govt taking over such production have not done as well as those with private enterprise. Norway did well. Venezuela not so much. Middle East not so much. >From a national perspective it would have been the much better choice to create a national fund in the sixties or seventies, How has that action played out across all countries that tried it? Picking one after the fact that did well while ignoring cases where that action didn't do well is not a good way to push future policy.

NeedMoreTea 7y ago
> If the state took control of all oil revenues No. Norway's oil fund is the surplus from oil taxes and exploration licences. Doesn't need 100% nationalisation, Venezuela or a command and control Supreme Soviet. The UK Energy Minister proposed a national fund in the sixties, the Treasury agreed, but he was overruled by Cabinet. The remnants of the British National Oil Corporation that was going to be responsible for licences and supply was sold off at huge discount as BritOil in the depth of a recession (now part of BP). > Picking one after the fact that did well Or we could simply look at what the UK actually did with the oil dividend. Then conclude that anything else would have been better for the UK. A national fund with zero growth or investment. A fund that makes a 20% loss every year. Simply spend it all on modernising infrastructure every year. Better still, a national fund with a conservative growth strategy. Ideally split between a global fund (the $1.1tn) and a national fund, as the Norwegians did. Per capita not nearly as much as Norway's $200k each certainly, but $20k per person is hardly chicken feed. Whatever, we'd be far better placed for what comes after the oil. Or have $1.2tn+ to decarbonise the whole economy. Or take some of the load off funding state pensions into the future, with an ageing society... The USA could have achieved a phenomenal fund over the far longer period of US extraction - started in what, the 1890s, who knows what absurd valuation could have been achieved by now. Or the benefits that would bring to pensions or infrastructure.
eesmith 7y ago
Which, to go back a few levels, is why I wrote "The thing about Norway is that they were responsible before they were as wealthy as Croesus." and why patfla's comments about the ironies seem unjustified. You touch on some very difficult topics. You are correct that Iran did not do so well after they nationalized their oil production. That's because the UK entered as trade war with Iran, and the US "CIA arranged a military coup to depose the democratically elected Mosaddegh and install a regime more favorable to the UK." https://en.wikipedia.org/wiki/Anglo-Persian_Oil_Company https://en.wikipedia.org/wiki/Anglo-Persian_Oil_Company . Additionally, unlike the UK and Norway, most other oil producing countries were under foreign colonial rule, or recently out of colonial rule.