Much has been said and written about the collapsing oil price.

Political point scoring has tracked the falling price. Unionists have been quick to ask: "Where's your $120 a barrel now?"

North Sea oil may be in decline but it is still central to the economic projections of the Scottish and UK governments. As falling prices reduce revenues for the Treasury, the Chancellor's economic recovery becomes ever more chimerical. There has even been parish-pump activity, with Aberdeen City Council attempting to organise a summit of interested parties to ameliorate the impact on the city and surrounding area. Cynical Aberdonians might well mutter that it makes a change from the council's attempts to organise social functions in a brewery.

The north east has most to lose through tailing off in North Sea activity. Clearly the declining value of what should have been a carefully managed, mutually beneficial national resource is of concern to us all. Yet, in conversation with those not employed in the oil industry, I note a surprising schadenfreude towards the current situation.

While such a reaction is probably misguided, it is understandable. The presence of the oil industry has made Aberdeen an almost impossibly expensive place to live for those without oil-sector salaries. The cost of living, housing in particular, has been a major cause of the recruitment crisis in the health and education sectors.

The industry-wide inflated salaries are the principal cause of sky-high living costs. An acquaintance working as a contractor recently bemoaned a reduction in his day rate. It was hard to avoid responding, "welcome to my world", particularly as it wasn't so long ago that he let me know that the rate was more than a £1,000.

The downturn in the price is an opportunity for the industry to take a close look at its costs, particularly in terms of manning levels, salaries and conditions. Some companies have already started the process with interesting side effects. The attendance at one company's Christmas bash was way down on previous years. It wasn't hard to find the reason: employees had to pay for their tickets and the bar was no longer free. Welcome to the real world.

Hopefully, for all our sakes, the price will rise at some point. However, this downturn may be different from previous dips. In the 1980s political instability in the Middle East sent prices through the roof. Additionally, Opec rigidly controlled supply and price. In contrast, current instability in the area has led to oil being pumped on to the world market as if there was no tomorrow.

Also, we have yet to see the impact of fracking both here and in the US. The huge investment being made by INEOS at Grangemouth suggests serious competition from shale gas and oil.

Consequently the current situation may not be a short-term blip. If that is the case the industry needs to become leaner and meaner and do more with less. Perhaps the public sector could provide some advice.