Poached Salmond

Scotland’s push for independence is in the homestretch, with a much-awaited televised debate on Tuesday and a final vote on whether to leave the United Kingdom slated for mid-September. But if the prospect of oil and gas riches helped drive the push for Scottish independence, the bleak reality of what’s really offshore is dooming the effort.

The Scottish National Party is banking on years of offshore oil income to fund its dream of an independent state. However, sober assessments of the limited bounty available from Britain’s North Sea oil and gas reserves undercut both the SNP’s energy promises and, by extension, much of its ambitious political program. Independence isn’t advancing in the polls; the latest surveys show about a 14-point lead for remaining part of the U.K.

"If you don’t believe the big numer they present in terms of revenues they can bring online from natural resources, it calls into question everything else the SNP has put forward about what they’re looking to achieve," said Mujtaba Rahman, the head of Europe for risk consultancy Eurasia Group.

Scottish independence movements date back centuries, ever since the crowns were united in the early 18th century. The discovery of oil and gas in the North Sea off the Scottish coast in the 1960s renewed such efforts; indeed, "It’s Scotland’s Oil" became a populist rallying cry during a decade of strong electoral success for the SNP.

Alex Salmond, head of the SNP for the second time, has used Scotland’s increasing autonomy –such as the recent formation of a parliament — to push for a total break, promising voters there will be plenty of gain and little pain in leaving the U.K. The Proclaimers’ paen to Scottish independence, "Cap in Hand," is the movement’s unofficial anthem (immortalizing just how lowly Stranraer lies).

The Scottish question has implications beyond the United Kingdom. European countries are watching closely for signs of what might happen in their own restive regions, especially Spain, which is dealing with a similar independence push from the northeastern region of Catalonia. NATO is carefully watching: the U.K.’s nuclear sub fleet is homeported in Clyde.

All year, the leader of the SNP has been laying the groundwork for the crucial yes-or-no referendum slated for Sept. 18. Salmond toured Washington, D.C., and New York earlier this year to make the case for why an independent Scotland is both sensible and viable. The key pillar of his whole project? North Sea oil and gas that turned cities such as Aberdeen into bustling capitals of European energy production.

Speaking at the SNP conference this spring, Salmond pointed to the oil rigs and oil-service vessels plying nearby harbors as Scotland’s ticket to independence. "The oil, and the tax revenue, will continue to flow. What a shock this scene must be for the opponents of independence," he said.

Last year’s white paper, which serves as the movement’s intellectual blueprint baldly states that Scottish independence will be underwritten by decades of oil and gas royalties. This summer, an expert commission outlined ways to "extract every last drop" from the fields–and the money.

The SNP’s latest estimate is revenues will hit 48 billion pounds through 2018; profits from Scottish waters came to 10.6 billion pounds in 2011-12. What’s more, the SNP tells Scottish voters that the North Sea will provide even more oil and gas. "The industry (will) continue to make a substantial contribution to tax revenues for decades to come," the SNP’s website promises.

There’s just one problem: Aging fields have long threatened the North Sea’s long-term production. The U.S. Energy Information Administration says that U.K. oil production peaked in the late 1990s at about 3 million barrels daily, plummeting to about 800,000 barrels today. In 2013, the U.K. became a net importer of petroleum products for the first time since 1984.

Adding grist to the independence debate, the latest estimates by the U.K. Office of Budget Responsibility predict even less future oil and gas revenue. Some Scottish nationalists have taken issue with the OBR report, given the timing of its release by London.

"Oil and gas receipts are on a declining trend as total production from the U.K. continental shelf moves towards its ultimately recoverable capacity," the report concluded.

As a result, the OBR slashed its receipts estimate by one-quarter–now a paltry 40 billion pounds of tax revenue between 2020 and 2040. The report further stated that governments cannot expect that revenue to cover even current budgets, let alone the pension requirements of an aging population. This comes as the SNP campaigns for a bigger welfare state in an independent Scotland.

"The energy question is important because it feeds into the big question of what the financing of an independent Scotland would look like," said Eurasia Group’s Rahman.

The disconnect between the SNP’s lofty ambitions and what looks to be dwindling means to achieve them "raises questions about how credible the plans are for independence," he said.