In the latest issue:

Real Men Go to Tehran

Adam Shatz

What Trump doesn’t know about Iran

Patrick Cockburn

Kaiser Karl V

Thomas Penn

The Hostile Environment

Catherine Hall

Social Mobilities

Adam Swift

Short Cuts: So much for England

Tariq Ali

What the jihadis left behind

Nelly Lahoud

Ray Strachey

Francesca Wade

C.J. Sansom

Malcolm Gaskill

At the British Museum: ‘Troy: Myth and Reality’

James Davidson

Poem: ‘The Lion Tree’

Jamie McKendrick

SurrogacyTM

Jenny Turner

Boys in Motion

Nicholas Penny

Jia Tolentino

Lauren Oyler

Diary: What really happened in Yancheng?

Long Ling

Short Cuts: Harry Goes Rogue

Jonathan Parry

At the Skunk WorksR.W. Johnson
Close

Terms and Conditions

These terms and conditions of use refer to the London Review of Books and the London Review Bookshop website (www.lrb.co.uk — hereafter ‘LRB Website’). These terms and conditions apply to all users of the LRB Website ("you"), including individual subscribers to the print edition of the LRB who wish to take advantage of our free 'subscriber only' access to archived material ("individual users") and users who are authorised to access the LRB Website by subscribing institutions ("institutional users").

Each time you use the LRB Website you signify your acceptance of these terms and conditions. If you do not agree, or are not comfortable with any part of this document, your only remedy is not to use the LRB Website.


  1. By registering for access to the LRB Website and/or entering the LRB Website by whatever route of access, you agree to be bound by the terms and conditions currently prevailing.
  2. The London Review of Books ("LRB") reserves the right to change these terms and conditions at any time and you should check for any alterations regularly. Continued usage of the LRB Website subsequent to a change in the terms and conditions constitutes acceptance of the current terms and conditions.
  3. The terms and conditions of any subscription agreements which educational and other institutions have entered into with the LRB apply in addition to these terms and conditions.
  4. You undertake to indemnify the LRB fully for all losses damages and costs incurred as a result of your breaching these terms and conditions.
  5. The information you supply on registration to the LRB Website shall be accurate and complete. You will notify the LRB promptly of any changes of relevant details by emailing the registrar. You will not assist a non-registered person to gain access to the LRB Website by supplying them with your password. In the event that the LRB considers that you have breached the requirements governing registration, that you are in breach of these terms and conditions or that your or your institution's subscription to the LRB lapses, your registration to the LRB Website will be terminated.
  6. Each individual subscriber to the LRB (whether a person or organisation) is entitled to the registration of one person to use the 'subscriber only' content on the web site. This user is an 'individual user'.
  7. The London Review of Books operates a ‘no questions asked’ cancellation policy in accordance with UK legislation. Please contact us to cancel your subscription and receive a full refund for the cost of all unposted issues.
  8. Use of the 'subscriber only' content on the LRB Website is strictly for the personal use of each individual user who may read the content on the screen, download, store or print single copies for their own personal private non-commercial use only, and is not to be made available to or used by any other person for any purpose.
  9. Each institution which subscribes to the LRB is entitled to grant access to persons to register on and use the 'subscriber only' content on the web site under the terms and conditions of its subscription agreement with the LRB. These users are 'institutional users'.
  10. Each institutional user of the LRB may access and search the LRB database and view its entire contents, and may also reproduce insubstantial extracts from individual articles or other works in the database to which their institution's subscription provides access, including in academic assignments and theses, online and/or in print. All quotations must be credited to the author and the LRB. Institutional users are not permitted to reproduce any entire article or other work, or to make any commercial use of any LRB material (including sale, licensing or publication) without the LRB's prior written permission. Institutions may notify institutional users of any additional or different conditions of use which they have agreed with the LRB.
  11. Users may use any one computer to access the LRB web site 'subscriber only' content at any time, so long as that connection does not allow any other computer, networked or otherwise connected, to access 'subscriber only' content.
  12. The LRB Website and its contents are protected by copyright and other intellectual property rights. You acknowledge that all intellectual property rights including copyright in the LRB Website and its contents belong to or have been licensed to the LRB or are otherwise used by the LRB as permitted by applicable law.
  13. All intellectual property rights in articles, reviews and essays originally published in the print edition of the LRB and subsequently included on the LRB Website belong to or have been licensed to the LRB. This material is made available to you for use as set out in paragraph 8 (if you are an individual user) or paragraph 10 (if you are an institutional user) only. Save for such permitted use, you may not download, store, disseminate, republish, post, reproduce, translate or adapt such material in whole or in part in any form without the prior written permission of the LRB. To obtain such permission and the terms and conditions applying, contact the Rights and Permissions department.
  14. All intellectual property rights in images on the LRB Website are owned by the LRB except where another copyright holder is specifically attributed or credited. Save for such material taken for permitted use set out above, you may not download, store, disseminate, republish, post, reproduce, translate or adapt LRB’s images in whole or in part in any form without the prior written permission of the LRB. To obtain such permission and the terms and conditions applying, contact the Rights and Permissions department. Where another copyright holder is specifically attributed or credited you may not download, store, disseminate, republish, reproduce or translate such images in whole or in part in any form without the prior written permission of the copyright holder. The LRB will not undertake to supply contact details of any attributed or credited copyright holder.
  15. The LRB Website is provided on an 'as is' basis and the LRB gives no warranty that the LRB Website will be accessible by any particular browser, operating system or device.
  16. The LRB makes no express or implied representation and gives no warranty of any kind in relation to any content available on the LRB Website including as to the accuracy or reliability of any information either in its articles, essays and reviews or in the letters printed in its letter page or material supplied by third parties. The LRB excludes to the fullest extent permitted by law all liability of any kind (including liability for any losses, damages or costs) arising from the publication of any materials on the LRB Website or incurred as a consequence of using or relying on such materials.
  17. The LRB excludes to the fullest extent permitted by law all liability of any kind (including liability for any losses, damages or costs) for any legal or other consequences (including infringement of third party rights) of any links made to the LRB Website.
  18. The LRB is not responsible for the content of any material you encounter after leaving the LRB Website site via a link in it or otherwise. The LRB gives no warranty as to the accuracy or reliability of any such material and to the fullest extent permitted by law excludes all liability that may arise in respect of or as a consequence of using or relying on such material.
  19. This site may be used only for lawful purposes and in a manner which does not infringe the rights of, or restrict the use and enjoyment of the site by, any third party. In the event of a chat room, message board, forum and/or news group being set up on the LRB Website, the LRB will not undertake to monitor any material supplied and will give no warranty as to its accuracy, reliability, originality or decency. By posting any material you agree that you are solely responsible for ensuring that it is accurate and not obscene, defamatory, plagiarised or in breach of copyright, confidentiality or any other right of any person, and you undertake to indemnify the LRB against all claims, losses, damages and costs incurred in consequence of your posting of such material. The LRB will reserve the right to remove any such material posted at any time and without notice or explanation. The LRB will reserve the right to disclose the provenance of such material, republish it in any form it deems fit or edit or censor it. The LRB will reserve the right to terminate the registration of any person it considers to abuse access to any chat room, message board, forum or news group provided by the LRB.
  20. Any e-mail services supplied via the LRB Website are subject to these terms and conditions.
  21. You will not knowingly transmit any virus, malware, trojan or other harmful matter to the LRB Website. The LRB gives no warranty that the LRB Website is free from contaminating matter, viruses or other malicious software and to the fullest extent permitted by law disclaims all liability of any kind including liability for any damages, losses or costs resulting from damage to your computer or other property arising from access to the LRB Website, use of it or downloading material from it.
  22. The LRB does not warrant that the use of the LRB Website will be uninterrupted, and disclaims all liability to the fullest extent permitted by law for any damages, losses or costs incurred as a result of access to the LRB Website being interrupted, modified or discontinued.
  23. The LRB Website contains advertisements and promotional links to websites and other resources operated by third parties. While we would never knowingly link to a site which we believed to be trading in bad faith, the LRB makes no express or implied representations or warranties of any kind in respect of any third party websites or resources or their contents, and we take no responsibility for the content, privacy practices, goods or services offered by these websites and resources. The LRB excludes to the fullest extent permitted by law all liability for any damages or losses arising from access to such websites and resources. Any transaction effected with such a third party contacted via the LRB Website are subject to the terms and conditions imposed by the third party involved and the LRB accepts no responsibility or liability resulting from such transactions.
  24. The LRB disclaims liability to the fullest extent permitted by law for any damages, losses or costs incurred for unauthorised access or alterations of transmissions or data by third parties as consequence of visit to the LRB Website.
  25. While 'subscriber only' content on the LRB Website is currently provided free to subscribers to the print edition of the LRB, the LRB reserves the right to impose a charge for access to some or all areas of the LRB Website without notice.
  26. These terms and conditions are governed by and will be interpreted in accordance with English law and any disputes relating to these terms and conditions will be subject to the non-exclusive jurisdiction of the courts of England and Wales.
  27. The various provisions of these terms and conditions are severable and if any provision is held to be invalid or unenforceable by any court of competent jurisdiction then such invalidity or unenforceability shall not affect the remaining provisions.
  28. If these terms and conditions are not accepted in full, use of the LRB Website must be terminated immediately.
Close
Fool’s Gold: The Story of North Sea Oil 
by Christopher Harvie.
Hamish Hamilton, 408 pp., £18.99, October 1994, 0 241 13352 1
Show More
Show More

In 1937 a small gas field was discovered near Whitby in Yorkshire. In 1943 in Nazi-occupied Holland drilling began in a search for gas which met success only in July 1959 when the Groningen field was discovered in Friesland. It became clear that Groningen, the world’s second largest gas field, stretched far out into the North Sea and geologists noticed that the strata in which the Dutch deposits were found were actually an undersea extension of a formation which began in Yorkshire. Oil companies began to search the sea and quickly found several sedimentary basins of the sort likely to contain gas and oil. BP rather perilously converted a barge into a makeshift rig, the Sea Gem, which in November 1965 discovered the West Sole gas field off the Norfolk coast. Six days later the Sea Gem capsized with the loss of 13 lives. The search for hydrocarbons in the North Sea led the oil companies into the deepest water and toughest conditions they had ever encountered. In 1964 it was reckoned that North Sea waves never got higher than forty feet, winds never higher than 53 mph. Gradually, bitter experience taught that nothing was ever quite tough enough for the North Sea, that you had to be ready for waveheights of 65-100 feet and wind speeds of 70 mph. The technology became more and more awesome, the rigs huger, the entire scenario more and more futuristic. It was, in Alvarez’s phrase, ‘outer space with bad weather’.

This is the story Christopher Harvie has to tell. His is an immensely important book – astonishingly, there is no other good account in print of the North Sea phenomenon which has changed the world oil market, transformed the British and Norwegian economies and, invisibly, reshaped their political and social life. On top of that, it is full of extraordinary engineering achievements, telephone-book financial numbers and gee-whiz facts. The oil boom has, for example, created Britain’s busiest port, which practically nobody has heard of, Sullom Voe in the Shetlands, and brought in its train such monsters as ‘the biggest movable object on earth’: the central platform of the Ninian field, which had to be towed northwards into position by no fewer than seven tugs. At 601,200 tons the platform was bigger by far than the largest supertanker ever seen. Not a few of the characters the boom brought with it were larger than life too: ex-Governor John Connally of Texas, for example, still scarred from the Kennedy shooting, hustling for oil companies and on the way down to the bankruptcy that broke him, and T. Boone Pickens, the greenmail king, so thrilled with his acquisition of the Mesa field (which he renamed after his wife, Beatrice) that he buzzed Balmoral Castle. Pickens talked like his name sounded, describing the head of the British National Oil Corporation (BNOC), Sir Frank Kearton, as ‘an inside guy at the skunk works’.

Unfortunately, Harvie is an intellectual magpie and his book is irritatingly, or rather maddeningly, written, a series of digressions about every subject under the sun. He cannot bear, for example, to mention Lord Balogh, the Balliol don Harold Wilson recruited as an economic adviser in 1964, without telling us what it was like to be an inter-war Hungarian radical under ‘a sclerotic, semi-fascist regime, brooding over its Habsburg past’, or to talk about Norway without throwing in a series of quick observations on Norwegians (‘devoted to patriotism, ecological uprightness, liberated but worried sex, and downright gloomy alcoholism’). The overall impression of a worrying lack of control serves to undermine confidence in his judgment more generally.

A tougher editor might have reined in Harvie’s habit of picking up subjects, putting them down and then picking them up again, so that nothing ever gets treated in properly consecutive fashion. It is, for example, an extremely difficult task to piece together a basic chronology of North Sea development from Harvie’s text, different bits of it being squirrelled nuttily away in little caches throughout the book.

Even before the Sea Gem found gas off Norfolk the British Government rushed to reach a deal with Norway over boundaries. In its indecent haste it probably gave away more than it needed to, allowing the Norwegians (and later the Germans) to take concessions in what turned out to be the precious Ekofisk area. In 1966 the Burmah Oil vessel, Ocean Prince, found oil off Cromer but nothing was said about this (the find was anyway too small to exploit): the companies played down their activity and tried to suggest that they were doing the Government a favour by prospecting at all in such inclement waters, while the Government seems to have been naive and ignorant. In 1969, right on the border with British waters, the Norwegians struck the Ekofisk field with its 2.8 billion barrels of reserves and Amoco quietly found the Montrose field. The next year BP discovered the 2.5 billion barrel Forties field but kept it dark for over a year. In 1971 the Auk, Argyll and Brent fields (the latter a two billion barrel giant) were discovered, and though Brent was hushed up for a year, word was now out.

Nonetheless, the companies continued to play down their discoveries: if the Government and public got too excited they would start clamouring for a larger share of the riches. The companies could point out that oil had been steadily declining in price, from $1.75 a barrel in 1949 to $ 1.25 in 1969, so many of the North Sea finds would be too expensive to exploit. And they minimised the size of the reserves they had found. In 1974 even the Department of Energy, using oil company figures, suggested total reserves of only 8.5 billion to 14 billion barrels. To the companies’ fury, the LSE academic, Peter Odell, argued that this was just an oligopolistic fudge: the true reserves he estimated to be between 78 and 100 billion barrels. In the end this turned out to be far closer to the truth: the early estimates of Brent and Forties both had to be upped tenfold. Similarly, attempts to minimise the value of the finds had to be dropped when the 1973 oil crisis saw the price shoot up sixfold to $18 a barrel. Development took several years but by 1977 38.3 million tons of oil flowed ashore, netting £2.23 billion and by 1980 this had risen to over 80 million tons and £8.85 billion. By 1982 the oil was worth £14.43 billion. The North Sea had become the world’s second biggest off-shore oil producer, after the Gulf. The economic effect was colossal: from 3.1 per cent of British exports in 1973 oil had risen to 21.7 per cent in 1983 and fuel exports as a whole came to almost a third of total exports. The value of the pound soared.

It is Harvie’s constant and well justified refrain that British politicians have never really come to grips with the North Sea phenomenon, have indeed remained strangely oblivious to something that has transformed the nation’s political economy. The North Sea discoveries were arguably the most important event in the life of Harold Wilson’s 1964-70 Government and they were of increasing significance to every Administration that followed. (Thatcherism in particular would have been impossible without North Sea oil.) Yet Wilson’s biographers say nothing about it; former ministers in charge of oil, like Peter Walker, barely note its existence in their memoirs; and in The Downing Street Years Margaret Thatcher has nothing to say on the matter beyond a reference to the privatisation of ‘Britoil (a nationalised North Sea exploration and production company set up by Labour in 1975)’. This is odd not only because the Britoil privatisation was the largest of all but because Thatcher had set up Britoil herself from the sale of the old BNOC. Her back-handed account is all the more remarkable in view of Denis Healey’s observations on the depths of the first Thatcher recession of 1980-81: ‘It would have been impossible for Britain to have survived these disasters without North Sea oil ... During Mrs Thatcher’s first nine years it brought the Treasury £62 billion in revenue, while its contribution to the balance of payments was nearly £100 billion. Without it, she could never have won even her second term; Britain would have been bankrupt by 1983.’

In castigating British politicians for their ignorant treatment of North Sea oil, Harvie even puts forward a theory about Denis Thatcher’s directorship of Burmah Oil (which collapsed and was nationalised) being darkly responsible for Madam’s guilty silence. There may be something to this but the larger truth is surely that the culture of the House of Commons, and thus of our political life in general, is determined not, as in the case of Congress or the Bundestag, by its committees, but by meetings of the whole chamber. MPs tend to concentrate on the broad canvas and on the sort of rhetoric and argumentation which go down well in a non-expert gathering of several hundred. This taste for non-expert opining and the windy rhetoric it can lead to is entrenched in our culture. Long before they arrive at Westminster many MPs have been practising those sorts of debating skills in the Oxford, Cambridge and other student unions, while radio programmes such as Any Questions? consecrate the public place of this genre at its most excruciating. Perfect examples of what this sort of thing leads to were provided by the missions to Moscow of Michael Foot and later of Neil Kinnock. The Kremlin’s defence specialists, accustomed to Bundestag deputies able to discuss throw-weights, Mirving, telemetry and so forth, discovered that the British MPs, for all their passionate dedication to disarmament, had to work hard to make sure they knew an SS-9 from an SS-20. One suspects that oil was the same: to get a real grip on the way the oil industry works means learning a good deal of specialised information about the geology, technology and finance of an extremely sophisticated business. Texas politicians like Connally and LBJ were entirely at home with the language of depletion allowances, ‘hot oil’, trade-out and build, accelerated tax amortisation and the like, but it is hard to imagine British politicians acquiring such expertise. Almost none did. There was just one geologist among the 630 MPs and since he was a (Labour) backbencher no one listened to him. Oil debates were distinguished by the poorly informed state of their speakers and the even poorer attendance they attracted. The oil companies, naturally, did well out of such ignorance. As T. Boone Pickens later explained, ‘the North Sea finds dwarfed anything being found in the Gulf of Mexico ... I could’t help thinking about the great possibilities across the Atlantic, especially when I learned that 50,000 acre tracts were being given free to companies willing to explore them. To oilmen used to paying millions just for the privilege of drilling, that was a real incentive.’

From the British taxpayer’s point of view the hero of the piece was Tommy Balogh. Balogh had had a frustrating time under the first Wilson Administration for, despite the fanfare over his appointment, his advice had been largely ignored. When, in 1967, Oxford gave him the choice of staying in government or keeping his readership, he came back to teach despite his marked lack of enthusiasm for the academic grind. By the late Sixties Balogh had come to the conclusion that the incompetence of the generalist Whitehall mandarins was allowing the oil companies to get away with murder. (Balogh quite commonly thought this of opponents and was not above getting away with murder himself.) Harvie doesn’t mention it, but Balogh had already fought a bruising and successful first round over North Sea gas prices. The key move, taken at his instigation, was to use the British Gas Corporation as the chief buyer and distributor of gas, thus allowing BG to dictate the gas price. This idea may have germinated earlier in the Sixties when Balogh was asked to write the first national plan for Algeria, where oil and gas rights were of the essence, though he did not have the chance to put his ideas into practice there. He was greeted at Algiers airport by the Ministers of Finance and Planning but got into a fight with them in the car and told them they were ‘both bloody fools’. By the time he arrived at his hotel he had been fired and had to turn round and drive back to the airport.

Balogh sat in Oxford and taught and grumbled while Labour lost power. Although the new prime minister, Edward Heath, greatly disliked the oil companies, his government proved no more capable than Labour of grasping the nettle of oil taxation, so in 1972 Balogh went public with a blistering article in the Sunday Times – something he doubtless enjoyed, given that Heath, too, was a Balliol man and honorary fellow. This persuaded the Commons Public Accounts Committee under Harold Lever to go into the matter, though Lever suffered a stroke and his place was (ably) taken by Edmund Dell. Harvie doesn’t seem to have interviewed any of these figures, which is a pity, for he would have found a trail leading, irresistibly, back to Balliol. Balogh’s own work on oil had been greatly assisted by another Balliol graduate, Michael Posner, while Dell himself, who would become the key legislator on oil, had co-authored a book with Christopher Hill, the Balliol historian. When Dell’s Committee began its work it picked Robert Neild at Cambridge as its adviser but Balogh, who was worried that ‘the fucking shits will get away with it,’ got his Balliol colleague, Andrew Graham, to brief Neild.

The Committee’s report was a landmark. It angrily pointed out that ‘the first huge areas of the sea, of a hundred square miles each, were leased to the companies as generously as though Britain were a gullible Sheikdom, with concessions running for 46 years.’ Finding the Committee’s investigations blocked by civil servants, Dell became the chief interrogator himself and elicited the appalling admission that the oil companies had so managed their tax losses that their collective corporation tax liability over the whole 1965-73 period was a measly £500,000. Infuriated, Dell demanded to know what tax the companies would be paying in the future. Well, they’d already run up £1500 million in tax losses and were running up more all the time. So they might be paying almost nothing right into the Eighties. Are you then saying, asked Dell, that the benefits will come in anyway, because the companies are mainly British? Well, no, they were mainly American. Things had been so arranged, in other words, that British taxpayers would stand by, passive and unpaid observers, while foreign companies walked off with their chief patrimony: the Accounts Committee was quite right that no tinpot sheik would have stood for this. What Harvie has missed here is that the companies were constantly writing down reserves to suggest that the oil would run out soon and that they must therefore have favourable treatment for the enormous capital investment required to gain this brief benefit. None of this washed with Harold Lever, who led the Committee’s furious inquest, nor with Dell when he succeeded him.

When Wilson came back to power in 1974 perhaps the most important appointments in his government were Balogh as Minister of State for Energy, Lever as Chancellor of the Duchy of Lancaster and Dell as Paymaster-General. Together they devised the Petroleum Revenue Act, the Offshore Petroleum and Pipelines Act and set up BNOC, with Dell piloting these through the Commons and suffering the full fury of the oil companies: Exxon sent him a letter ‘so rude that I could only assume it was drafted by someone accustomed to addressing banana republics’. Dell was all ready to set Petroleum Revenue Tax at 55 per cent, but an atypically dovish Balogh came down in favour of 45 per cent. Nonetheless, the deed was done and the terms of the enormous public revenue flows of the decades ahead were established. Dell thus became the most important Labour politician of his time, though he never scaled Cabinet heights. He later wrote that ‘like Jellicoe at the Battle of Jutland, I sometimes felt that I was the only minister who could sink the British economy in an afternoon, by miscalculating the new tax ... this simply illustrates the self-importance to which ministers are susceptible.’ But it doesn’t: you could buy fleet after fleet of new battleships with the money the PRT brought pouring in.

Nor has Tommy Balogh (who died in 1985) yet had the credit he deserved: he is now chiefly remembered for his outstanding ability to give offence to almost everyone. I last saw him in 1982. He was as cantankerous as ever and feeling discontented about his Oxford career: he had seen less talented men promoted above him, though his own complaint was simpler – ‘too many fucking tutorials, that was the problem.’ I pointed out that because of his political career, he had been the most influential economist of his generation: with the PRT he had actually changed the nation’s economy. He glared at me: ‘OK, you are the politics man, explain why there are so many bloody fools in politics. In any case, we should have taxed them more.’ He needn’t have worried; despite their original opposition to the PRT, the Tories happily accepted it once they were in office, and as Chancellor Sir Geoffrey Howe quietly increased the rate to 75 per cent. Harvie, who is a bitterly anti-Thatcher Scot, writes glowingly and at length about Tony Benn’s role as Minister of Energy, but the fact is that Howe’s single stroke of the pen achieved more for the public sector than Benn did in his entire career.

Harvie seems in general to believe that the handling of North Sea oil has been a disaster. He is certainly right in his contention that Britain failed very badly to produce the rigs and deep-sea equipment needed by the industry; it watched even the smaller Norwegians and the oil-less French take the business away from them. (‘All we supply,’ went the bitter Scottish complaint, ‘is the whores and the whisky.’) And he is right that the Norwegians have handled the whole affair better, preferring a slower and more sustainable rate of extraction, and developing the necessary ancillary industries as they go along. But he is too gloomily willing to believe that Thatcher simply wasted the oil revenue: that, in short, we got everything wrong.

It would be fairer to say that, while Thatcher did large and unnecessary harm to the British economy, she also presided over a considerable though painful increase in our manufacturing productivity, a huge labour shake-out and a massacre of restrictive practices. What oil did was to pay for the vast welfare costs incurred while the pain was at its worst and, in addition, to fund such a large flow of investment abroad that Britain briefly overtook Japan as the world’s largest creditor nation. It was certainly regrettable that the ‘petropound’ was allowed to rise to levels which decimated British industry, and equally regrettable that Thatcher, Lawson and Major ran down our stock of foreign assets by running huge trade deficits for the last seven years. And it may be regrettable that more of that money was not re-invested here. But those huge capital flows abroad benefited so enormously from the world stock-market boom of the Eighties that even the horrendous deficits have not wiped out the whole of that foreign portfolio which will, in effect, be helping to pay for British pensions in the generation ahead.

Similarly, Harvie writes at length about the Scottish nationalist reaction to the oil and a vague feeling that the oil was stolen from Scotland permeates the book. Devolution, he believes, was just something the British ruling class talked about – a smokescreen while it secured the oil and ran off with the money. Perhaps. Yet faced with a referendum, the Shetlands, one of the areas most affected by the coming of oil, voted most heavily of all against devolution.

Harvie is angry, too, that Britoil was sold off and that we have run down our reserves too fast. But the fact is we have been lucky. As Thatcher’s Chancellor, Nigel Lawson said he wanted to sell off Britoil quickly before the oil price dropped, and this turned out to be shrewd. At one stage after the 1979 Iranian revolution the oil price had hit $40 a barrel. By November 1985 it was $30 and then, with the collapse of OPEC, it fell, only six months later, to $10. In effect, Britain had set up a state oil company when prices were relatively low, sold it off at the very top of the market and then watched the price collapse by two-thirds. Most market players would be thrilled with such a performance. Moreover, Britoil was so over-priced that huge amounts of stock got left with the underwriters. In other words, Lawson got far more out of the Britoil sell-off than even the most ardent Bennite could have wished. This was a privatisation pas comme les autres. By the same token it is now arguable that we did just the right thing in exploiting the stuff so fast because it meant that we were able to sell the maximum amount at the top of the market in the early Eighties.

So oil has not been fool’s gold at all, just gold. The whole story doesn’t lend itself to moralising: it’s easy to make the companies the villains of the piece, but there’s no doubt that their engineering and technical achievements have been spectacular. In any case, moralising about energy is a mistake – luck has more to do with it. When the first oil crisis broke out the British media were extremely indignant that Western motorists should be ‘held to ransom’ and tough questions were put to the Shah of Iran on British TV. How could he justify charging so much for his oil? Well, it was a free market, wasn’t it? he replied. Yes but surely he must admit that Iran had done nothing to ‘deserve’ all these riches under its soil: was it really right? The Shah looked surprised that anyone should think geology had anything to do with just deserts and said: ‘But I’d happily give it all up in exchange for your rain.’ The same logic applies to the North Sea. It’s true that we didn’t manage our oil all that well but it hasn’t mattered much. We were lucky that it was there in the first place, lucky that the price went up when it did, lucky that we had Balogh and Dell, lucky we sold off Britoil when we did, lucky we caught the great stockmarket boom of the Eighties, lucky even now when it appears that there is oil on our Atlantic side as well. It would seem that there’s even more of the stuff than we ever dreamed of. And we’ve got the rain as well.

Send Letters To:

The Editor
London Review of Books,
28 Little Russell Street
London, WC1A 2HN

letters@lrb.co.uk

Please include name, address, and a telephone number.

Read anywhere with the London Review of Books app, available now from the App Store for Apple devices, Google Play for Android devices and Amazon for your Kindle Fire.

Sign up to our newsletter

For highlights from the latest issue, our archive and the blog, as well as news, events and exclusive promotions.