Edited Oct. 3, 2019, to correct to dates.
Too frequently ignored in discussions about abandoning hydrocarbon energy is the economic goodness of resource development.
Advocates of all-renewable energy sometimes acknowledge that their program would raise energy prices and that there would be economic consequences—sure to be offset by the profits of wind-turbine and solar-panel manufacturers, of course.
But consumer costs aren’t everything.
Disruption to oil and gas development—the goal of leave-it-in-the-ground fanaticism—hurts economies, too.
Ask homeowners in Aberdeen.
The Granite City holds bottom position among 20 UK cities ranked by house-price growth in a study published Sept. 26 by Hometrack, a London market analyst.
In August, according to the Zoopla UK Cities House Price Index, Aberdeen’s average house price was £158,800—4% below its average in 2018, which was 4.3% below the level of 2017. Ouch.
In the city ranking just above Aberdeen in price growth, Oxford, the average house price fell only 0.4%—to £409,100, third highest behind London and Cambridge.
The average home price for all 20 cites was £257,900 in August, up 1.9% from August a year ago.
Residents of any municipality dependent on oil and gas production can sympathize with their counterparts in Scotland’s center of the UK Continental Shelf oil business.
Their fortunes swing with oil and gas prices, which means frequently and sometimes painfully.
Aberdeen has had an especially tough run.
Its struggles began before the latest market collapse in mid-2014 as resource maturation and taxation unadjusted to the change depressed investment and drilling.
UKCS work is recovering, thanks partly to fiscal improvements. But Aberdeen’s model-based unemployment rate, at 5.1% last year, remains above those of all of Scotland, 4.3%, and of Great Britain, 4.2%, according to the Aberdeen City Council.
Still, the average number of Aberdeen residents with jobs last year was 120,400—a few hundred below the 2017 level but strongly above the low point of 114,200 in 2016.
Further recovery will help house sales. UKCS operators just need to frustrate environmental campaigners and stay busy.
(From the subscription area of www.ogj.com, posted Sept. 27, 2019. To comment, join the Commentary channel at www.ogj.com/oilandgascommunity.)