The leader of the secessionist Scottish National Party, Alex Salmond, cast his vote on the historic referendum on Thursday morning in his hometown of Strichen, Aberdeenshire. (Reuters)

Can an independent Scotland live high off its oil and gas reserves?

Nationalists, who are hoping Scots vote Thursday to break ties with the United Kingdom, say that an independent Scotland would have so much oil that it could set up a sovereign wealth fund like Norway's fabulously rich fund -- and still pay for free education, boost pensions and keep taxes low. But many oil and gas experts -- including some of the biggest global oil and gas companies -- have warned that Scotland might not be quite as well off as that.

Here's the independence view: A Scottish government-led group of industry leaders in 2012 published an Oil & Gas Strategy article, which estimated that there are up to 24 billion barrels of oil and gas reserves that could be recovered. The group said that the reserves -- "at wholesale prices" -- would have a value of 1.5 trillion pounds, or $2.5 trillion, equal to ten times the size of the entire Scottish economy. Independence leaders accuse the British government in London of squandering oil revenues and running a large deficit.

But a variety of people have been drilling holes in that reasoning. First, production in the British North Sea peaked in 1999 and has been dropping rapidly. Oil output, almost 90 percent of it in Scottish waters, has fallen to less than half its levels a decade, and is down 74 percent since 1999 . Thanks to new technology and spending, that production should level off a bit and then resume its decline in 2018, say industry experts. Yetthe Scottish administration is forecasting about a 14 percent increase in output.

"We don't see any hope that the North Sea will suddenly catch a 'fresh wind' and begin to reverse these declines," Pavel Molchanov, oil analyst with the investment firm Raymond James, said in a note to investors Sept. 15. "Tax policy has been a contributing factor to the UK's particularly steep declines, but even without that, there is no escaping the fact that discoveries of new reserves in the North Sea have simply not been able to keep up with the rate of depletion. The 'low-hanging fruit' has largely been picked and major new discoveries are less and less frequent."

Second, the 24 billion barrels figure for oil and gas reserves was taken from a report done by oil expert Sir Ian Wood, a Scotsman and retired founder of Wood Group, an Aberdeen-based oil services firm. But it is the upper end of a range of estimates Wood gave; the lower end was 12 billion barrels. Wood, upset with how his figures were being used, said the most likely amount to be found would be between 15 billion and 16 billion barrels.

“By basing our economy and therefore the future of our children's quality of life, public services and jobs on unrealistic recovery of reserves let alone unproven reserves is a huge gamble and the stakes are too high,” Wood said in remarks reported by The Telegraph. “The highly misleading and exaggerated claims around oil and gas give me cause for concern about where else in the case for independence there have been similar distortions, painting an overly-optimistic picture which is galvanizing voters into making a decision we could all live to regret.”

A separate consulting firm Wood Mackenzie (no relation to Sir Ian) forecasts 15.3 billion barrels of recoverable reserves. Alex Kemp, director of the Aberdeen Centre for Research in Energy Economics and Finance, said 15 to 16.5 billion barrels. "There will be no bonanza," he said. Fewer and fewer wells are being drilled, and the results have been disappointing.

The chief executive of London-based oil giant Bob Dudley also weighed in. "BP has been in the UK North Sea for 50 years and we hope to operate here for many years to come. However, the province is now mature and I believe Sir Ian Wood correctly assesses its future potential," Dudley said. "The opportunities today are smaller and more challenging to develop than in the past. We also face the challenges of extending the productive life of existing assets and managing the future costs of decommissioning. Much of this activity requires fiscal support to be economic, and future long-term investments require fiscal stability and certainty."

Third, the Scottish independence leaders have assumed that oil prices will remain at $110 a barrel. Oil prices have been in that ballpark for much of the past four years, but those are record levels and the price of oil is famously volatile. "Fluctuations in oil and gas prices are one of the main determining factors of future revenues," said a report by the consulting firm Wood Mackenzie, which noted about a $10.70 a barrel difference in price forecasts between the Scottish and British governments. It said that difference "greatly influences the projected levels of government take."

Fourth, even at these high prices big oil companies are trying to get out of the North Sea, Molchanov added. Chevron shelved a project; Marathon Oil tried to sell its stake. Costs are going up. "With finding and development costs on the rise, the key North Sea producers do not have much of an incentive to engage in the exploration that is required to discover large new resources," Molchanov said. To give them greater incentive means reducing taxes.

Finally, how does this all stack up against the Norwegian sovereign wealth fund? Norway set up a fund for oil revenues more than a quarter century ago, and it has spent only the returns, not the capital. Today it owns more than 8,000 companies in 82 countries. It is worth about $860 billion. That would be hard for Scotland to match, especially if its fields are in decline and it spends more than the returns.

"If Scotland were to become independent, North Sea tax revenue would be a much larger component of its government budget than it is currently for the UK as a whole," said Molchanov. Moreover, he added, "the party also promises increases in social spending after independence, which would be particularly hard to fund without the current rate of North Sea tax revenue."

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