Grangemouth: facts, consequences and issues

Today the Unite Union has performed an about turn in conceding to the position of Ineos, owners of the Grangemouth petrochemical plant and its associated oil refinery.

This is an admission of an initial catastrophic failure to read the situation properly and to take astute strategic action. The union is reported as, subject to agreement by its members who are on the Grangemouth workforce, now accepting in its entirety the ‘survival plan’ put forward by Ineos and, under Union advice, rejected by around 50% of its workers.

However, while Union representatives are saying they are encouraged by exchanges this morning, there is not yet any response from Ineos so, in a situation of mutual distrust, the move may be too late. Ineos said last night that there was no prospect of its return to the ACAS conciliation service to reopen this discussion.

The situation has immediate social and economic consequences for the town of Grangemouth, with substantial local unemployment now in the offing.

Facts and consequences

These are the key facts of the situation, which has immediate social consequences and major business and political implications.

800 people work at the Grangemouth petrochemical plant and face the imminent loss of their jobs, with liquidators to be appointed within a week.

600 people work at the Grangemouth refinery and are now fundamentally uncertain of their futures. Some are reported already to be leaving to try and get a headstart on looking for alternative jobs.

Grangemouth alone delivers 8% of Scotland’s manufacturing performance.

10,000 secondary jobs are estimated to be at risk if the entire complex shuts down.

According to the Scottish government, total overseas sales of refined petrol and chemicals grew 3.5% in the second quarter of 2013.

These products accounted for nearly a quarter of Scotland’s manufactured goods sold for export.

Over the most recent quarter, exports grew by 4.2% – a slower rate of growth than that of previous quarters. The overall picture, following poor exports in the second half of 2012, produced at year-on-year figure showing total manufactured exports down 1.8%.

The Grangemouth refinery supplies 80% of Scotland’s fuel needs as well as the north of England and Northern Ireland. It also supplies steam and power to the platforms in the huge Forties Oil Field in the North Sea, 110 miles east of Aberdeen, through BP’s Kinneil terminal, on the opposite bank of the River Avon from the 3 square mile Grangemouth complex.

The steam power supply relationship of Grangemouth to the Forties Field platforms has earlier seen those platforms having to shut down because of a strike at Grangemouth.

The importance of the inward supply relationship of the Forties Field to  Grangemouth is underlined by the parallel fact that the Forties Pipeline System delivers about 40% of the North Sea’s total production straight into Grangemouth.

For some time, the Forties pipeline has been carrying only one third of its capacity because the Grangemouth refinery does not now need any more than that.

The issue here is the availability of cheap shale oil and gas exported from the USA, undercutting North Sea prices, with refineries not only in the UK but elsewhere, unable to compete on price. Refineries are closing in other parts of the world, some with lower labour costs than the UK, because they are not financially sustainable.

With refineries in the UK closing over the past decades, there are now only seven left.

At Grangemouth, the petrochemical plant – which is to have liquidators appointed with a week – has been buffering the financial viability of the oil refinery by producing plastics and pharmaceuticals from the by product of the refinery.

But the refinery is now in the position of having to pay more than it needs for the oil that produces the by product to keep its supportive petrochemical plant going.

So Ineos wants to import cheap gas from abroad to sustain the refinery and with its byproduct keeping alive the petrochemical plant, which itself has been keeping the refinery viable.

If the refinery were to try to retrieve the kind of support it has enjoyed in selling its byproduct, or feedstock, to the petrochemical plant, it might try shipping out the byproduct for sale elsewhere. But that would add to the costs and would be competing with similar shipments from the USA

It may have no choice but to flare off its excess gas – which will lose it income and raise concerns around excessive emissions.

The likelihood is that the petrochemical plant’s closure will mean the closure of the refinery itself.

If that happens, it is possible that Ineos would reopen the site simply as a storage depot and distribution point for cheap imported gas – which would see the oil from the Forties Field having to come ashore in the north east of England.

There is a precedent for this change of use. After its owner, Petroplus, filed for bankruptcy in 2012, the Coryton refinery in Essex was closed – and reopened as a depot and distribution point.

Ineos has said that if the refinery is to continue, it will need government loans. The Scottish Government is making available £9 million in general support, which may be straightforward grant support; and the UK Government is making £140 million available in potential loans.

The Scottish Government position

The weakness of the Scottish Government has been immediately evident in the irrelevance of Energy Secretary Fergus Ewing. The heavy lifting is being done by Finance Secretary, John Swinney and First Minister, Alex Salmond; while UK Energy Secretary, Ed Davey is fronting the matter for the UK, with a bit part role for newbie Scottish Secretary, Alistair Carmichael.

Both are working flat out to try to find a buyer for the Grangemouth plant – which industry wisdom regards as highly unlikely, with its value currently written down to zero -reflecting the level of potential commercial interest.

However there is some distance between the positions of these two senior ministers. Mr Salmond has been hinting at possible nationalisation of Grangemouth, as a last ditch measure.

This is a political tranquiliser but is financially and operationally non-viable, as Mr Swinney is aware, saying only that nationalisation would ‘not be appropriate’.

Scotland’s finances could not afford a major loss-maker supported by the tax payer. The Government itself would have to confront the Unions  on terms and conditions – which it is not prepared to do at the moment, for obvious political reasons.

The UK Government and its civil service, never mind Scotland’s, have no experience of running such operations – so an expert team would have to be hired to do it. As the bump-along-the-bottom survival operation – which is all this could be, the best abilities would not take such jobs. So a nationalised effort would be even more expensive and even less productive in what is already a loss making situation.

Information above underlines the fact that this is not a situation whose cause lies in Scotland – although the Union’s strategy has made the position worse in bringing it to an immediate head for which we are not prepared.

This is an industry wide picture, which makes its resolution here even more difficult.

It was noticeable that, with its own party conference in Perth an immediate commitment, Scottish Government ministers were slow to read the nature and import of the developing stand-off at Grangemouth. Had they got involved earlier than they did, at the most capable senior level, they might have deflected the Union on to a more useful course of action, avoiding the polarising stand-off which developed.

The Westminster Government has also been markedly slow to get involved – arguably driven by fear that any premature intervention, in the context of the run up to the independence referendum, would become instant political capital, used to claim a continuing colonialist mindset.

Scotland and the UK has suffered from both of these slow motion responses, as the delay meant the Union committing to what was obviously suicidal action.

A contract worker at Grangemouth, with this category of staff also facing the loss of their jobs, said to camera with some desperation, ‘Everybody’s had to take a hit in this recession. Why not take a wage freeze and a lower pension and  keep your job? Where are there any others?’

And this is, flatly, the position, with that common sense response possibly beyond recall.

For every possible reason, Unite should have accepted the Ineos financial survival plan. It should have done so, even if, as is quite possible, Ineos was playing a game to defect responsibility away from itself, banking on Unite doing exactly what it did do – and giving Ineos cover for an action it was determined to take anyway, for reasons of financial efficiency.

Doing this would either have given the Grangemouth complex a survival strategy with Ineos then committed to reinvestment; or left the company’s covert intention naked, if it had gone on to close the plant regardless.

The political impact

The political impact of the Grangemouth situation is already immense.

It has shown how vulnerable the Scottish economy as a whole is to a crisis with a single business of this scale, beyond the means of Scotland, independent or not, to resolve on its own.

It is demonstrating the interconnectedness of things – with the possibility of Forties Field production having to divert to come ashore in the north east of England, if Grangemouth were to become a storage depot and distribution point for shipped-in cheap imports. The redirection of the Forties Pipeline network to enable this, would remove the direct availability of this fuel to Scotland.

Moreover, it would complicate the distribution of assets in a move to Scottish independence; where, in a United Kingdom or a federation, this would make no overall difference.

The First Minister is saying that he will not accept the closure of Grangemouth. This is impotent rhetoric wiser to leave unsaid.

The Diageo closure of the Johnnie Walker bottling plant in Kimarnock should have taught the Scottish Government a  lesson in the minimal influence governments anywhere have these days on the actions of the inhabitants of Planet Business.

The big issue

The big issue is about jobs.

Scotland needs to increase its manufacturing base, both for economic performance and for employment.

But labour costs in the far east and elsewhere are far lower than ours, often with little quality differential. How do we compete?

Over time, labour costs will rise in our competitor markets but, even then, if we do not change aspects of our present employment requirements, we will remain out of competition.

We are looking at an economy which will see expertise and jobs available in research, innovation and development – but see the fruits of this capability sent for manufacture elsewhere.

This would leave us – and the same is true of the UK as a whole – with no jobs available to a large spectrum of our people, whose needs in social support would increase. This insupportable direction of travel is not only about an ageing population. It is about an uncompetitive economy.

The only answer to this is a form of social contract where business accepts its social responsibility and takes less profit in order to fulfil that responsibility; and where workers accept the value of job security and secure earnings in exchange for lower expectations.

This would see the country deprived of the input of what we call the grab-and-go merchants, the international privateers taking swift opportunity of serious short term profitability and state financial incentives to set up – and then departing at speed when they’ve milked the cow dry. Their loss would be no bad thing. Our economic philosophy has long been in need of re-education.

This social contract would, however, see a necessary stabilisation in our expertise, in our production and economic performances, with settled and responsible businesses offering relatively secure jobs – seeing the benefit of a skilled and responsible workforce and regular reinvestment in exchange for respectable but not stellar returns.

This would involve a change of values and of attitudes to their respective roles by employers and employees alke – and involve governments in what our traditional political system actively prevents – long term strategic planning.

For the moment

It is said that there is no serious concern about fuel supplies, with contingency plans apparently in place to source petrol and diesel supplies from elsewhere, if the Grangemouth refinery closes.

Panic buying is not necessary and might accelerate a crisis that would not otherwise occur.

A further economic hit is the fact that the BASF chemicals plant in Inverclyde – which coincidentally, Jim Ratcliffe also once controlled, is now closing, with the loss of 141 jobs. Its now German owners are to send its work – to China.

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67 Responses to Grangemouth: facts, consequences and issues

  1. You quote a ‘contract worker’; the figures for people ‘working at’ the petrochemicals plant, and the refinery, seem to be only for those directly employed by Ineos group companies, and like many such companies these days a large number of the workers are employed by contractors, kept ‘off the books’ in much the same way as governments and local councils have transferred essential services ‘off the books’ by privatising them. So, while the figure of 10,000 secondary jobs at risk might be a good guess, the figures of 800 and 600 workers at the petrochemical plant and refinery respectively are far short of the mark.
    The BBC news website gives a figure of 2,000 ‘contractors’ – and I doubt that many of these are only working on short-term contracts on the site.
    So many more people than the total number who – represented by the Unite union, voted on the Ineos proposal – presumably had no say, and this is a critical problem in these times of people working ‘off the books’. We live in a democracy – really?

    Hot debate. What do you think? Thumb up 15 Thumb down 4

    • Right on, Robert. Democracy for the rich to exploit and the poor to have the choice of sleeping under a bridge or doing what they are told. This is part of the US led fightback against the gains working people made after WWII. And as long as we are (over) ruled by right-wing governments (Labour and tory and libdem) in Westminster we have our hands tied behind our backs.

      Hot debate. What do you think? Thumb up 19 Thumb down 21

    • No matter how many employees direct or otherwise had a say it doesn’t escape the fact that this business and any business that is operating in a competitive global environment can only sustain providing long term employment, income, social purpose and a future if it can operate profitably.

      Strong employment is a by-product of a successful business. No commercial business has a primary objective of providing employment to people. All this nonsense that Ineos has committed economic vandalism and has no social conscious by closing the plant that has been spouted by the union, the local councillors and left leaning parties just don’t get that if Grangemouth can’t be made to operate competitively then it has no future, period.

      Its closure is massive. The impact is massive. Nobody wants to see it and it’s devastating locally and impacts the much wider economy.

      Unite has a lot to answer for to so strongly leading the employees to choose to protect pension and benefit rights that have long gone for a lot of people elsewhere, over the option that gives a future and long term employment to them and many many more people besides.

      Hot debate. What do you think? Thumb up 15 Thumb down 6

      • Yes, far better to have a lot of frightened, obedient slaves who will sacrifice their own wealth, health and their families so that the shareholders can have nice holidays and laze on their yachts in the Bahamas. This is why the capitalist system is a blot on the reputation of humanity.

        Hot debate. What do you think? Thumb up 9 Thumb down 13

        • The point that I should have made clearer is that the 50+% of the unionised direct employees who voted against the Ineos proposal were in fact far, far less than 50% of the actual workforce, many of whom had no say in a decision that could yet prove to have torpedoed the local economy and severely damaged the national economy.

          Hot debate. What do you think? Thumb up 14 Thumb down 3

        • Frightened obediant slaves or engaged and supportive workforce working in the best interest in the long term survival and growth of the company and therefore their own livelihoods and those of thousands around them?

          After 2008 I had to swallow the bitter pill, work less, get paid less, lose pension rights and all that other stuff. Why? The same reason that when I go shopping I look for bargains, offers, deals and good value in whatever I buy. We are all the ultimate customer and it is the decisions and demands we collectively make as consumers that force down costs and forces out the uneconomic suppliers. As an employee, I could see that recession / reduced demand / increased competition had a direct link to my employer having to be totally cost competitive to survive.

          The result, company now in a much better position to thrive because those who didn’t address their cost base have now either gone or are very very fragile. A much more positive long term future is clear for me and many others. And no, I’m not a frightened, obedient slave. I have a lot of respect for the company, the management and the customers and I do feel incredibly valued and proud. I did what I had to do and they respected us for it.
          We could have gone on strike, marched, banged the table and demanded we didn’t loose anything but I’m 100% certain if I had, I’d now be out of work. It was hard at the time, but looking back I’d have been a fool to have done anything else.

          The comments really are from the dark days of the ’70s and just look how effective that strategy turned out to be. Pat Rafferty and Les McClusky should do the honourable thing and go with heads held in shame. They would demand it of any business manager.

          Hot debate. What do you think? Thumb up 11 Thumb down 4

  2. An old fashioned and out-dated union – still alive and trying to kick, in Scotland. They picked on the wrong employer this time and completely misread the situation, putting so many people into distress.

    Hot debate. What do you think? Thumb up 27 Thumb down 11

      • Most of you are too young to remember the 50s / 60s / 70s. But to have the management of Ineos at that time could have saved so much heart ache and loss later on when Mrs T was left to put the country right. Unions were in total control then, and it looks as if the unions leaders today are trying it on again, but thankfully without success. If there was any honour within the Unite Union officials, there would be mass resignations. But of course they will have personal contracts that guarantee them fat union pensions etc so they will stay on to the death – champagne socialists ????.
        The ill they have caused the good people of Grangemouth is unforgivable

        Hot debate. What do you think? Thumb up 29 Thumb down 11

        • Well, I can remember them all too, and if the country was run by the unions they made a very good job of hiding it. Mrs T didn’t, as you say, put the country right – she ransacked it for the benefit of her tory pals and shareholders, destroyed hard working communities, and tried to make us all as selfish and ignorant as herself. She obviously succeeded with some! If the unions ran the country, how did that happen?

          Hot debate. What do you think? Thumb up 9 Thumb down 15

          • As your party seems to be going down the proverbial toilet week on week I can’t be bothered giving you the facts proving you wrong.

            Hot debate. What do you think? Thumb up 11 Thumb down 5

          • So the 3 day week, Sunny Jim’s ‘winter of discontent’, Red Robbo ruling Longbridge, ‘who governs Britain?’ and the UK being ‘the sick man of Europe’ was just so much scotch mist? Burgeoning union power wasn’t solely to blame for Britain’s ills in the 1960s and 70s but it was a leading cause of economic damage.

            Like or Dislike: Thumb up 4 Thumb down 3

        • Thatcher put Scotland right?

          How’s Ranvesncraig, mining, shipbuilding these days?

          Lets not forget we are currently in difficulties and are in it all together

          Just look at Cameron , Clegg, Osborne, Milliband — look how they are suffering like the folk wondering how to pay the bedroom tax.

          Hot debate. What do you think? Thumb up 6 Thumb down 9

  3. There are now three disparate entities that can be linked. The sale of Royal Mail, Grangemouth Refinery and Timex in Dundee.
    The sale of Royal Mail, indicates how far to the right all mainstream political parties have drifted. No matter where you live in the UK, everyone now is reliant on global market forces. These forces have little consideration for human resources, be they in the UK or China for that matter. So, we sold Royal Mail to the Sovereign bank accounts of Kuwait, China and the rotten Global Banks – lookout for sweated assets, price increases and maximized shareholder returns. So where does Grangemouth fit in? Well we sold it too – remember, we used to own it through the state run BP. Now you cannot expect the current Grangemouth owners – a global corporation – to take hits of millions a month without doing something to bring these debts down or simply stop trading and avoid insolvency – Lets make no mistake there is and will be for the foreseeable future a glut of low cost fuel around that makes Grangemouth a dead duck without investment to make it more efficient. If the Government can Sell Royal Mail then similarly why should a private investor particularly help the people of Falkirk and Grangemouth – lookout for sweated assets and lower running costs. Timex – well there you go, a classic of how a town and Union got it wrong – repeated at Grangemouth by a bunch of idiots who were inward looking and incredibly couldn’t understand the global market they worked in – don’t they read the market reviews – as they leave, they should all be given a Timex watch as reminders of their utter stupidity and the futility in supporting a Union which simply had not the wherewithal to understand the business and clearly shamefully lost the plot. Lets hope that the business can be turned around and the owners talk directly to the workforce about their future employment rather than redundancy.
    But still, we have allowed the UK to drift to the political right, where cash is king and sod you mate attitude. Until such times as London political parties redresses this balance and considers that the UK or even federated UK needs have a say on or manage some essential industries – particularly power and fuel prices – then we will all be reduced to serfs and Grangemouth will be seen as another irrelevant step on the way to a truly global society.

    Like or Dislike: Thumb up 8 Thumb down 1

    • You may as well add that the Power Companise that are currently screwing us all dry are also owned by foreign entities out to make a buck…

      Profit is a dirty word !

      Like or Dislike: Thumb up 8 Thumb down 1

      • Profit is what pays your wages and enables companies to raise money and invest in the future. Without it, who will? The state? And who pays them? Taxes from people, profits from wealth generating companies or money its borrowed from someone else that also has to be paid back with interest.

        Socialism has its place but its only North Korea who are clinging on to the ideal these days. All the other socialist states have realised and are fighting hard to dig themselves out of the hole their ideals got them into.

        Like or Dislike: Thumb up 7 Thumb down 6

        • The profit motive and the actuality of profit, like them or not, create an engine like no other.
          The best one can hope for is an overt or tacit agreement to embrace corporate social responsibility – which would redirect some profit without weakening the engine and would produce a fairer society.
          The trouble is that, just as all workers are not the epitome of selfless commitment to the work ethos, by no means all capitalist ventures are in anything for the long game – and so do not reinvest.
          This is the mindset that leads to incidents like the recent Dhaka factory collapse and the appalling atrocity at Union Carbide plant at Bhopal – seeing the prolonged avoidance of other than token payment for their responsibilities, finally cloaked in a change of corporate ownership to the new Dow Chemicals.
          So we need the profit-driven and we need them to make their profits for the reinvestment the best of them will make. Alongside this we need protection against the grab-and-go cowboys.
          The unions, in less sophisticated days and with a much less educated population, served their purpose in standing powerfully against the exploiters.
          But today they are more or less living relics of an earlier era, with their anachronistic mindset and their influence counterproductive [as seen in the Grangemouth engagement].
          We need to arrive at a fitting and able counter to exploitation to replace the primitive old ritual antagonisms.
          The notion of a social contract or an understanding and implementing of the need and value of corporate social responsibility at all levels seems a decent place to start.

          Like or Dislike: Thumb up 4 Thumb down 5

    • One aspect of the Grangemouth events is that they seem to be evolving out of an old, unreconstructed confrontational worker – employer relationship, with a history of fractious industrial relations. I wonder what chance there is, in this country, of establishing a more enlightened and constructive relationship – with workers involved in the management, and with a more direct stake in the financial health of the business?
      As I understand it, this happens widely in Germany, and certainly doesn’t seem to have done them any harm – quite the reverse.

      Like or Dislike: Thumb up 8 Thumb down 1

      • That is certainly one way forwards, but I suspect US style management have more to lose, and would imagine workers would gain more than they’d like from this. UK class prejudices are also an obstacle. As you say, works for Germany, but they also have more enlightened education and training regimes too, which help.

        Like or Dislike: Thumb up 2 Thumb down 0

  4. This is a sad situation, with most affected parties to blame in one way or another, but most of all the union. Any person who joins a union in this country in the hope that they will get a better deal should have a long hard think about if this is the case. They appear to be self serving, ego driven organisations who are interested in ideals first, workers second.

    The bit that annoys me most now is how all the political parties are telling us what a bright future Grangemouth has. Do they live an a parallel universe? Have they been reading different reports? Are they deluded? Or do they think we are that stupid and believe that?

    Grangemouth has a future, but that future is not bright. It may be able to be propped up for a few more years, but it’s a fundamentally failing business. even with investment, it’s unlikely to have a long future.

    It’s a sad day that an oil rich country like Scotland cannot even support a successful chemical processing industry. It’s bad for Scotland’s economy, it’s bad for Scotland’s reputation as a place to do business – that workers would put their job on the line before make sacrifices to help keep their job and the industry they work in going.

    Independence will not solve it. Nationalisation would not solve it. I fear that neither the Scottish Government nor the UK Government have a clue what to do for the long term. As I’ve said before recently, it does however show that whatever your view on the Thatcher era and the death of coal and steel, heavy industry and manufacturing in Scotland has little future. How I wish that were not true, but i fear reality is proving otherwise.

    The attitude of so many however treating a company like
    Ineos as if they owe Scotland something is simply emotionally driven nonsense. It works both way – Ineos seeks to make money and needs people to work for them. People want jobs. Very simple dependency. Ineos is not a charity, as some would have you believe.

    Hot debate. What do you think? Thumb up 14 Thumb down 7

    • Repealing the Climate Change Act would save it; the cost of energy/feedstock is the single biggest influence on the profitability of a refinery or petrochemical plant. Offering oil producers tax incentives to direct their production to Grangemouth may also be a viable proposition. Simply being an oil-producing nation isn’t enough, lucrative though it is; other oil-producing nations with forward-looking leadership are investing in added value in the shape of oil refineries and petrochemical plants because they want that work enriching their citizens and filling their tax coffers.

      One of the reasons Grangemouth and other european refinery+petrochemical plants are struggling is a resurgent US refinery+petrochemical sector fueled by cheap shale gas and oil; it’s good Ineos are investing to equip Grangemouth to process gas imported from the US, but a sure way of guaranteeing its longterm security would be to stop obstructing shale gas exploration in the UK.

      Like or Dislike: Thumb up 2 Thumb down 3

  5. All this fuss over 800 plus jobs what about the 8000 plus jobs that will go at Coulport and Faslane if we get independance

    Hot debate. What do you think? Thumb up 14 Thumb down 13

    • Yes let’s take the moral low ground.

      Please we stay in big hooses in Helensburgh we need nuclear weapons and the monies needed to keep them safe?

      To hell with everybody else.

      Conventional forces are a sign of weakness Be in the big boy league with nuclear weapons that we can’t use Grangemouth v Faslane ? Would Faslane put petrol in my car?

      Hot debate. What do you think? Thumb up 11 Thumb down 7

      • It may surprise you but most people who work at the bases do not live in big hooses but are just ordinary working people trying to keep there family together just like the people over in Grangemouth.Alas in your world it is all about them and us get the chip off your shoulder this is one of the reasons why your campaign will fail

        Hot debate. What do you think? Thumb up 12 Thumb down 9

  6. Like all commentators note, it is interesting that both Westminster and Holyrood are seen to be working side by side. This clearly means that Holyrood could not make any decisions or make any inroads without Westminster.

    What’s the betting that more money from Westminster is being used to help resolve the situation? Money that won’t be there after Independence.

    Hot debate. What do you think? Thumb up 15 Thumb down 12

    • I take it based on your other posts that despite the fact that you have now lived in Scotland for a while that all revenue from Scotland entering Westminster stops being Scottish but is now owned by Westminster. So when we get any funds back it is a handout from that nice man Osborne.
      You have learned nothing. Do you not understand the term “retained powers to Westminster”

      Do you believe Scotland should have no Parliament at all at Holyrood and likewise institutions in Wales and Northern Ireland?

      Hot debate. What do you think? Thumb up 10 Thumb down 8

    • As I read it, £150m in loans from the UK government and about £9m from Hollyrood I can already hear the cries that King Alex has personally saved Grangemouth for Scotland.

      I wonder if in reality that, the result of the Dunfermline by election may have had just a little influence on the companies decision.

      Hot debate. What do you think? Thumb up 9 Thumb down 10

  7. As one of the local councillors for the Lomond North Ward, it became clear to me over the past couple of weeks that very few Argyll & Bute councillors, or others, were aware of the important links between Grangemouth and the INEOS facilities at Garelochhead in Argyll & Bute. So as to enaure that councillors and senior officers in the Council were made aware of the strategic link between Argyll & Bute and Grangemouth, I sent an email to them yesterday in which I stated as follows:

    “No doubt you are all aware of the current situation at Grangemouth which continues to be high profile in the media. Over the past couple of days, it has become apparent to me that a number of members are not aware of the potential impact that any changes at Grangemouth could have on Argyll & Bute and thought that it would be helpful to provide members with information on the important links between Grangemouth and Argyll & Bute”.

    “For those who are not aware, the Finnart Ocean Terminal at Finnart, Garelochhead is one of the assets of Petroineos Manufacturing Scotland Limited which is 100% owned by the Refinery at Grangemouth. Finnart is a deep water terminal that can take VLCCs (Very Large Crude Carriers) of well over 300,000 tonnes. The Terminal imports around 60% of the crude oil required to feed the Refinery (the other 40% comes from BP’s Kinneil plant at Grangemouth). The terminal also exports around 15-20% of the refinery’s output (mainly diesel, petrol, kerosene and jet fuel). For those who are not aware, Petroineos is a joint venture with half owned by Ineos and half by Petrochina”.

    “The announcement yesterday (Wednesday) related to INEOS’s Polymers and Olefins business at Grangemouth. However, the Refinery is highly integrated with the Polymers and Olefins (P&O) business so any major change to P&O has a massive knock on effect to the Refinery and subsequently to the Finnart facility”.

    “Given concerns on the impact that any changes at Grangemouth could have on the local Terminal and staff, I have met with Alan Findlay who is the Asset Manager at Finnart to discuss the current situation. Alan has confirmed to me that at this time, Finnart is continuing to operate as required by the Refinery with crude oil still coming in and products still going out, although he has confirmed that there is less crude oil required at the moment and similarly, less products to export”.

    “At this time, there is no direct impact on the 30 staff (some union and some non-union) who are directly employed by INEOS at Finnart. There are also approximately 100 agency and contract workers at Finnart. As far as the finances of Argyll & Bute are concerned, I believe that the Rateable Value (Non Domestic rates) of the facility are not far short of £2.5 million”.

    “Alan has confirmed to me that Finnart continues to attract a large amount of investment from the Refinery as it is a key strategic asset. The current major ongoing upgrade and repair programme at Finnart sees around £10-12 million investment per year over the last 6-8 years. This programme is likely to run for at least another 2/3 years. In the short term, while the Refinery is mainly shutdown, all non-essential contract work has been stopped at Finnart. This means that at this time, most contract workers have gone. A small “design” team remain on site to ensure the Terminal can get up and running again as soon as possible”.

    “During our discussions this afternoon (Thursday), we agreed that the situation at Grangemouth was looking slightly more positive than it was yesterday and are hopeful that an early resolution to the current problems can be found. As it is a number of years since a visit by local members to the Terminal took place, I have agreed with Alan that when the current situation is behind us, that we will try and arrange a visit to the Terminal for local members and for senior officers who have not had the opportunity to see what goes on at Finnart and how important that facility is to Argyll & Bute and the Scottish economy”.

    “I am sure that we all are hopeful that a successful resolution to the current problems at Grangemouth can be agreed without further delay”.

    “Given the current high media profile of INEOS and Grangemouth, I hope that you will find this information of interest”.

    As most people will now be aware, with the welcome announcement from INEOS this morining, things have now moved on considerably.

    I hope that the above information helps to highlight that Garelochhead in Argyll & Bute is an essential link in the operations at Grangemouth.

    Like or Dislike: Thumb up 2 Thumb down 6

    • And, like Grangemouth, Finnart seems to have a far greater number of workers ‘off the books’ than directly employed by Petroineos. Not exactly hidden, but with no say in the dispute that triggered the crisis.

      Like or Dislike: Thumb up 3 Thumb down 7

    • This is useful information.
      The conjunction of this information on the role and function of Finnart with the response above from Robert Wakeham brings a reminder of an odd incident in 2010.
      There was a strange explosion in Loch Lomond and the Trossachs National Park which, when the source of it was located, appeared to have been a bomb of some kind.
      Robert Wakeham suggested to us then that the location of the bomb – which superficially appeared to have no purpose and was a puzzle – looked as if it was on the line of the pipeline from Finnart to Grangemouth.
      This was our coverage at the time:
      http://forargyll.com/2010/11/has-international-terrorism-come-to-loch-lomond/
      Nothing was heard of this incident again.

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      • It was also highlighted in the press in the last couple of days that there was never an explanation on the explosion that Newsroom refers to although there have been a number of rumours circulating from time to time.
        There are actually two large pipelines that run between the INEOS Finnart facility at Garelochhead and Grangemouth. These were originally used to transfer crude oil from Garelochhead to Grangemouth. One of the pipelines was converted to transfer clean fuel (mainly diesel, petrol, kerosene and jet fuel) from Grangemouth for out shipment at Finnart.
        It certainly was not surprising to see Iain MacWhirter in today’s Sunday Herald try to give all the credit to Alex Salmond and the SNP for saving Grangemouth and for using this issue to have a go at the Labour Party. It certainly appears to me these days that Iain MacWhirter takes every opportunity to promote the SNP and the independence / separation cause.
        As we see with many reports on the Grangemouth issue, Iain MacWhirter makes plenty reference to how important the refinary is to the North Sea’s biggest oil field – the BP operated Forties field but not one mention that the Grangemouth refinary is dependant on the Finnart facility at Garelochhead for most of the crude oil that is now processed there.

        Like or Dislike: Thumb up 3 Thumb down 6

        • the Grangemouth refinary is dependant on the Finnart facility at Garelochhead for most of the crude oil that is now processed there.

          You might want to check your facts here Councillor.

          Like or Dislike: Thumb up 5 Thumb down 5

          • Longshanks, the information has been confirmed by Petroineos Refining and Trading. They state that at the Finnart facility, they currently “import around 60% of the crude oil required to feed the refinery (the other 40% comes from BPs Kinneil plant at Grangemouth) and they export 15-20% of the refinery’s output”.

            As I am sure you will be aware, Kinneil is the Grangemouth end of the North Sea pipeline.

            These figures can also be confirmed by checking shipping and other public figures that are available to the public.

            I assume that you do not drive past the Finnart facility on a daily basis like me and that you therefore do not see the VLCCs that are alongside discharging the crude oil that ends up being pumped to the Grangemouth refinery?

            Are you telling me that you know the companies business better than them, or is it that you would prefer to have us believe that Scotland does not require to import most of its oil?

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          • is it that you would prefer to have us believe that Scotland does not require to import most of its oil

            I think you are confusing ‘Grangemouth’ and ‘Scotland’, Councillor.

            Oil comes ashore from the North Sea via several other routes other than the Forties pipeline to Grangemouth, via FIPSO and shuttle tanker or via pipeline to Sullom Voe.

            Also, as you pointed out yourself in another post, there are two pipelines between Grangemouth and Finnart. Many of those VLCCs you see at Finnart are exporting refined petroleum products.

            I can’t actually believe that you have just claimed that Scotland is a net importer of oil. It would be funny if it wasn’t tragic.

            Like or Dislike: Thumb up 4 Thumb down 5

          • Longshanks: ‘VLCC’ stands for Very Large Crude Carrier – a big tanker, that doesn’t transport refined product. If you look at the details of the ships coloured red on ‘Live Ships Map AIS’ you’ll soon understand the difference.

            Like or Dislike: Thumb up 4 Thumb down 5

          • Strangely I know what VLCC stands for.

            You are assuming that Councillor Freeman is a shipping expert and knows the difference between a VLCC and a tanker carrying refined fuel. To the layman they both look like big ships.

            Anyway, you are splitting hairs. Do you believe, as Councillor Freeman appears to do, that Scotland is a net importer of oil?

            Like or Dislike: Thumb up 2 Thumb down 5

          • Longshanks, don’t be silly – I’m not assuming any such thing, but the difference in size between VLCCs and refined products tankers makes them easy to tell apart, and I was just clearing up some confusion of your own making.
            If you’re going to criticise others fair enough but you’d do well to be more careful what you say, and not try and pretend other people don’t understand what a term means when it’s you creating the confusion.

            Like or Dislike: Thumb up 3 Thumb down 2

    • Longshanks, I would certainly not include the report by Iain MacWhirter which only appears to be there to try and promote Alex Salmond.
      It is also surprising that some of the personal attacks that were going on in the background on Jim Ratcliffe, his hotel, the INEOS bankers etc have not been reported. I don’t think any of us would be willing to condone these sort of attacks.

      Hot debate. What do you think? Thumb up 6 Thumb down 9

      • Councillor, I’m surprised that you are in turn making a personal attack on Iain McWhirter – I hope you are not going to condone it, and I look forward to your taking yourself to task.

        Like or Dislike: Thumb up 7 Thumb down 6

  8. Alec Salmond congratulated everybody involved who helped to secure the jobs for Grangemouth and Scotland including both governments.
    To his credit he said anyone who tried to make a political point concerning the referendum from either side on the Grangemouth situation should be treated with scorn or words to that affect.
    As for the Herald and MacWhirter enough said.
    Cheers Neil.

    Like or Dislike: Thumb up 7 Thumb down 3

    • Alex Salmond’s ‘egg on their face’ comment is simoly him trying to avoid accepting that if this had happened in an Independent Scotland, and the plant had been shut, we would be up a creek without a paddle.

      The effect of Grangemouth shutting in an indpendent Scotland will be catastrophic. We’d be going with a begging bowl to anyone that might care.

      So much for oil being a ‘marvellous bonus’. We are completely and utterly dependent on it, that is completely clear now!

      Like or Dislike: Thumb up 5 Thumb down 3

    • Stewarty – it’s stretching credibility to imagine that you don’t know the difference between oil and gas, or are you trying to emulate Longshanks for the obfuscation award?

      Like or Dislike: Thumb up 4 Thumb down 1

  9. For the benefit of Longshanks and Stewarty, I spent years in a previous life working with oil tankers of all sizes at the large Oil Fuel Depots at Invergordon, Old Kilpatrick and Garelochhead. We loaded and offloaded various sizes of tankers (commercial and RFA) with aviation fuels, F75 and F76 diesel fuels and heavy fuel oils.

    Robert Wakeham is correct that VLCCs are crude oil carriers. Longshanks is wrong, even the layman can tell the difference between a VLCC and a refined oil carrier which is very much smaller. Longshanks is also wrong when he states that “many of those VLCCs you see at Finnart are exporting refined petroleum products”.

    At no stage did I make a statement that “Scotland is a net importer of oil”. You obviously do not want to admit what INEOS is telling us that most of the crude oil going to Scotland’s only oil refinery at Grangemouth is imported.

    Like or Dislike: Thumb up 6 Thumb down 5

    • Thanks to Councillor Freeman and Robert Wakeham for clearing up the misinformation being sprayed around here.

      A few dogged posters to FA can’t be bothered to research what they are talking about and fall back on misinformation, twisting the facts and character assassination.

      Like or Dislike: Thumb up 4 Thumb down 5

    • Are you telling me that you know the companies business better than them, or is it that you would prefer to have us believe that Scotland does not require to import most of its oil?

      That is what our good councillor said.

      Note he said ‘Scotland’ , not ‘Grangemouth’

      Sounds like deliberate misinformation to me I’m afraid.

      Like or Dislike: Thumb up 5 Thumb down 4

      • Here’s what Councillor Freeman said at the top of the comment which contains the bit you’re quoting out of context:
        “Longshanks, the information has been confirmed by Petroineos Refining and Trading. They state that at the Finnart facility, they currently “import around 60% of the crude oil required to feed the refinery (the other 40% comes from BPs Kinneil plant at Grangemouth) and they export 15-20% of the refinery’s output”.
        It’s quite clear he was referring to imports for the Grangemouth refinery so I’d say it sounds more like you twisting what he said.

        Like or Dislike: Thumb up 4 Thumb down 5

        • I’d say Councillor Freeman said that Scotland required to import most of its oil. It is in black and white. That was in the concluding paragraph of his post.

          Do you believe he typed those words accidentally? Or carelessly?

          Like or Dislike: Thumb up 6 Thumb down 6

          • Beware of people who deny something they wrote in black and white folks. And beware of those who call ‘troll’ when found out.

            Like or Dislike: Thumb up 6 Thumb down 6

          • “Are you telling me that you know the companies (sic) business better than them, or is it that you would prefer to have us believe that Scotland does not require to import most of its oil?” GF (above).

            If you give him the maximum benefit of the doubt, he is being economical with the actualite, as Alan Clark would put it.

            Why should we give him that benefit? He’s a politician! Either he’s being disingenuous, implying that Scotland is a net importer of oil, or he’s put his name to a howler. I’m going with the latter.

            Like or Dislike: Thumb up 5 Thumb down 3

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