PARIS (ResourceInvestor.com) -- Many commentators in the U.K. have been able to wax long and lyrical about the resignation of Prime Minister Tony Blair. Indeed many others from many other countries have done the same. Finally he is ready to stand down on June 27 after many, many months of his departure being an open secret.
On these occasions we normally see what appears to be a display of rank sycophancy from the media. This time has been no exception with servile hacks lining up to think long and hard over Tony Blair’s “legacy” and then deciding he was great. The U.K.’s citizens have never had such difficulty in expressing what they think of the man. The same could be said of future generations who will wonder what he and his market-driven predecessors did with the U.K.’s oil.
The British oligarchy has a representative governmental system, like much of Europe. In the U.K. it constantly elects minority governments. Even at his most popular Tony Blair only ever managed to encourage one third of adult population eligible to vote, to actually vote for him. Rather like Mrs. Thatcher just slightly less popular.
In return for around 22% of the adult population eligible to vote at the last election Blair’s party received around 70% of the seats in parliament. Only in politics does 22 equal 70. Just try it at your bank.
Tony Blair of course was economically a Thatcherite. Even his close confident - twice sacked from the government due to corruption - Peter Mandelson, says it. “We are all Thatcherites now,” he boasts. It is difficult to get much more plain than that. One mark of the beast is the love that Thatcherites like Mr. Blair have of “the market.” The market is great, you cannot buck it and it always works out best in the end. Just not in crude oil.
The U.K. was one of the world’s biggest producers of crude oil. With the emphasis on ‘was’. It produced over 3 million barrels a day in 1999; compare this to Iran’s 4 million barrels a day, Kuwait’s 2 million barrels a day and so on. This is major league work. The U.K. left it to the market to decide what the output would be; it gave huge tax breaks to private companies and allowed its precious hydrocarbon resources to be governed by the ungovernable.
Now some eight years later, the U.K. produces around 1.3 million barrels a day and all of a sudden it has become a net importer of hydrocarbons. Oh dear, what happened? The market did what it does best, suck a resource dry and then move on. The U.K. government has responded with a record number of permits given out to smaller oil companies mopping up what was left. Even if decent sized fields like BG Group’s [NYSE:BRG] Jasmine and Buzzard can be punchy in themselves, the decline in the U.K. North Sea is unstoppable.
Having maintained such a stupidly thought out and poorly planned use of resources Mrs. Thatcher and Mr. Blair then decided to go off to the Middle East to fight wars to control the supply of other people’s oil. Namely Iraq’s. Here they have been successful, unless you happen to be one of the millions who have died in the two wars and intervening sanctions.
In maybe 100 years or so, historians will look back at a politician who did a fantastic job at keeping his real motivations out of the public eye. Power is what Mr. Blair did best, getting it for himself that is. But wasting the resources of the U.K. will be his real legacy. He along with Mrs. Thatcher wasted that resource, oil, and wasted the human resources of the dead. Still, on to the lecture tour we go….
