At first glance, this once isolated port and university city on the North Sea coast hardly fits its new reputation as the offshore oil capital of Europe and "Houston of the north."
Dignified boulevards of imposing gray granite buildings, spectacular rose gardens and lush river valleys penetrating into the heart of the city dominate its appearance. But signs of dramatic underlying change brought by the North Sea oil boom can be seen in the smart shops lining stately Union Street and the oil companies' new offices, service depots and supply boats crowding the harbor nearby.
Nestled in the grassy hills around the city are new industrial parks and housing subdivisions where thousands of people in the offshore oil industry work and live. Stores are filled with staples of the affluent suburban lifestyle.
Out in the countryside, once dying villages are being revived by oil industry executives and technicians, many of them Americans, who have settled there. Further north along the coast are rapidly developing support bases for the offshore oil industry at the harbor of Peterland and terminals at St. Fergus and Cruden Bay for oil and gas pipes onshore from the North Sea fields.
At Aberdeen Airport, now also the world's busiest civilian helicopter base, there are more flights to oil platforms in the North Sea than to Glasgow or Edinburgh, and as many to the Norwegian oil-industry city of Stavanger across the North Sea as to London. In the ultramodern passenger terminals, executives in well-tailored suits mingle with oil rig workers in blue jeans, cowboy boots and 10-gallon hats.
North Sea oil has been undeniably good to Aberdeen and the green, hilly Grampian region around it in northeastern Scotland. It brought more than 30,000 new jobs to an area of 250,000 people. It also produced lucrative new work for the existing maritime, engineering and service industries and a new research role for Aberdeen's respected university and technical institutes.
"Oil has brought new vigor and enterprise to the city," said Aberdeen's lord provost, Alexander C. Collie, the equivalent of an American mayor. "Everyone and all of the city's businesses have taken advantage of the opportunity."
But North Sea oil has not been a similar bonanza for the rest of Scotland, as was once expected. Except for construction of oil platforms in a few fiords in the highlands and some supply ships in Clyde River shipyards in and around Glasgow, much of the spinoff economic development has been spread thinly throughout Britain. And all of the billions in North Sea oil royalty and tax revenues go directly to the British treasury in London.
Meanwhile, except for Aberdeen and the financial center of Edinburgh, Scotland is one of Britain's most depressed areas, with much higher unemployment and lower family incomes than the rest of the country. The steady deterioration of the British economy has continued to hit Scotland particularly hard because of the concentration of labor-intensive manufacturing industry there. The Clyde River Valley surrounding Glasgow, once one of the world's leading industrial centers, suffers the worst poverty, slums and social problems of any big city area in northern Europe.
The long decline of the traditional shipbuilding, steel and textile industries has shut scores of factories and drydocks in the Clyde valley, putting tens of thousands of people out of work. The situation began growing even worse last year when more diversified Scottish industries, many of them American-owned, began laying off workers and closing their doors.
At least 20,000 jobs were lost in Scotland during 1979, according to the Scottish Council Research Institute in Edinburgh. Singer, Massey-Ferguson, Goodyear and Monsanto were among the firms that shut their factories, and Timex, Chrysler and others made massive layoffs.
This has aroused such bitterness toward American employers, especially in Glasgow, that Craig Campbell, director of the Scottish Council Research Institute, felt it necessary to tell a recent regional conference in Glasgow: "It's high time we recognized the positive contribution these U.S. subsidiaries make to Scotland's economy and to employment in Scotland. uToo often these companies get publicity only when individual companies cut back on employment."
The subsidiaries of American companies in Scotland, like other industries there, have suffered from the steady contraction of the British economy, the rapidly rising costs of Britain's runaway inflation and wage rates and the inflated exchange rate of the British pound.One of the primary reasons that the pound keeps rising in value while the British economy continues to deteriorate is the revenue from the North Sea oil.
"There is quite a bit of bitterness around about the oil," said Scottish Council economist Jeremy Baster, because most of Scotland suffers from an oil-inflated pound while gaining little new employment or investment from offshore oil development.
"Where does all the North Sea oil money go?" James Johnstone, executive director of the Scottish Council, asked rhetorically. "It's all sucked up by the treasury in London."
Prime Minister Margaret Thatcher's monetarist Conservative government believes its rapidly increasing North Sea oil revenues should be used only to reduce the government debt and eventually to make big income tax cuts possible. It would then be left to the private economy to redistribute the money throughout the country. But Scottish politicians and business leaders argue that a sizable amount of the money from oil produced off Scotland's North Sea coast should be directly invested by the government in Scottish industry.
A leading Scottish industrialist, Peter Balfour, head of Scottish and Newcastle breweries and current chairman of the Scottish Council, argued recently that, rather than "disappear into the cavernous maw of the treasury," the "huge windfall gain of North Sea oil" must be used to revitalize industry, especially in Scotland.
"I am not totally convinced that the government has thought beyond the immediate problem of getting us out of debt," Balfour said. "Not a bad short-term objective. But using oil revenues to do so is a very short-term expedient and a dangerous one.
"Not to reinvest oil revenues to create new industries, new technologies, new skills -- not to improve our productive capacity and international competitiveness, is tantamount to asset stripping of a most blatant kind."
Scotland's worsening economic problems and the Thatcher government's largely indifferent response has only solidified Scotland as the strongest outpost of militant Labor Party opposition to the Conservative government.
The Scottish Nationalist Party, which narrowly failed to win limited home rule for Scotland and then lost much support in Britain's national election a year ago, hopes to attract new voters by pointing out how little London seems to care as Scotland suffers. The nationalists were the first to warn after North Sea oil was discovered off the coast of Scotland a decade ago that most of Scotland would see little of the resulting riches.
"I'm very pessimistic about the future," said Eric Mackay, editor of the respected Scotsman newspaper in Edinburgh, who echoes a number of other business and political leaders in Edinburgh and Glasgow.
"Scotland has been dead," he said, since the referendum last year in which Scottish voters failed to produce a sufficiently large majority for limited home rule.
"Scots were just too scared and timid," he said.
"There is no incentive for Thatcher to give Scotland special attention," according to Mackay. He said the Conservatives have comfortable control of the British Parliament while most of the Scottish constituencies are already in the hands of the Labor opposition.
Although he acknowledged that Thatcher's Scottish secretary, George Younger, has tried to protect Scotland from Thatcher's current government spending cuts, Mackay argued that the years between 1974 and 1979 were Scotland's best in the past half century. Because the Scottish nationalists had 11 members in the then-splintered British Parliament and sometimes held the balance of power, the Labor government was generous in supporting Scottish industrial development and self-help projects.
"Now it's all lost," Mackay said. "London won't do anything."