Issue
Tom Greatrex, the Shadow Energy Minister, said: "The fact that oil and gas revenues are expected to fall by 40% this year confirms that although the industry remains an important part of the Scottish economy, it is a declining and volatile resource."The fact is that oil is key to practically everyone's economy, but it is a limited resource. The Chancellor George Osbourne has been under a lot of pressure to approve the tax relief. This is not just beneficial for the oil and gas industry. This relief is believed to allow more money to flow and be used for re-investment. This relief is expected to lead to an extra 1.7 billion barrels of oil being generated. The OBR expects that 33 billion British Pound Sterling will be generated from oil and gas.
Relation to class
This is greatly relate to the topic of supply and demand. The demand for oil will not change, we are far too dependent on it. The supply of oil is greatly affected by this tax relief. The cost of production has decreased. The supply has increased leading to an increase in quantity and a decrease in price.
Overall, the economy has been suffering, the oil industry is a big contributor. The only resolution that really seems to exist is the use of renewable energy. Unfortunately, the Scottish economy is not in the best place to begin that transition. The government can implement new policies that will discourage the use of gas and provide tax reliefs to renewable energy business.
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