A colleague whose opinion I respect, had an interesting reaction to my recent article “Can we get the last drop“. He said that perhaps I was being rather nationalistic, perhaps you agree?
Unlike the points made in this Forbes magazine article, when I say that I don’t want to enrich other countries I don’t mean we should act like Venezuela and nationalise assets. I mean that I want any wealth created by the extraction of the resource to be available in this country (as private, taxable profit). I prefer not to see national treasure being exported to other countries in return for a product that we already have. Further, I think if we don’t act soon we won’t be able to act at all.
When I reflected further I realised that every country where I had worked except the UK and main land Europe, there was a general acceptance that energy and resource policy was of national interest. Even the USA has trade policies that govern the export and import of crude oil and refined fuels. Of course, countries like Saudi Arabia and Kuwait have export policies that not only move the commodity price but also are used to generate political power by choosing which countries can receive exports and where downstream investments will be made.
I am no politician nor would I claim to be a student of history. I am not an economist. I am an engineer and a business advisor. To me it is obvious that now we have an opportunity to extract resources from our reservoirs. There is a small time-window before the necessary supporting infrastructure is removed. As a country and an industry we are fiddling while Rome burns. If we do not act quickly then narrowly defined considerations will result in our opportunity being forever lost. I don’t think this is right.
We need to find a way to extract the last drops. Do it in a way that respects commercial reality while protecting the environment. If we don’t then we’ll end up exporting more of our treasure than we need to and all the people who rely on (or contribute to) our state treasury will be poorer.
It’s a challenge but I am sure we’re up to it. What do you think?
(Diagram from slideshare.net with thanks to AngloAmerican reference: http://www.slideshare.net/angloamerican/anglo-american-resource-nationalism )