Grangemouth refinery closure threat

Grangemouth, Scotland’s biggest industrial complex and its only oil refinery, could be shut in spring 2025, with the loss of hundreds of highly skilled jobs. This is the latest on the long line of attacks on Britain’s industrial base and energy security.

Grangemouth owners Petroineos revealed its intention on 21 November, when it sent an email to staff outlining the closure plans. Both GMB and Unite unions criticised the proposals not only for jobs losses but the wider economic impact

The original Grangemouth refinery was established in 1924. It was one of the first crude oil refineries in Britain. Formerly run by BP, the government owned the largest share until 1987 when it was fully privatised. It is one of Britain’s six oil refineries.

Strategic importance

The refinery, close to Falkirk, creates four per cent of Scotland's GDP and is eight per cent of its manufacturing base. It is of strategic importance for energy supply and local economic development. It employs over 500 staff and turns into petrol 39 million barrels of crude oil a year from the Forties field – more than a third of that extracted from the North Sea. It provides over 3 million tonnes of clean fuels to local markets each year.

The processing of crude oil adds all the value, and that’s where all the jobs are. It is highly labour intensive, since a refinery operates 24 hours per day, 365 days a year. As well as those directly employed there, many others work in the refinery’s supply chains.

Downgraded

The facility, a joint venture between the Chinese state energy firm PetroChina and Sir Jim Ratcliffe’s Ineos, would be downgraded to an import and export oil terminal facility. Petrol and diesel would be imported after refining elsewhere and then distributed around Scotland – a kind of Amazon warehouse for fuel.

“This poses serious questions about the UK’s energy security.”

Gary Smith, the GMB union’s general secretary, said, “This is a deeply worrying time for the future of the workers and communities dependent on Grangemouth. The intention to transition from domestic production to a fuel import terminal poses serious questions about the UK’s energy security. It will also cause real concern for the wider UK energy and manufacturing sectors. Time and again, GMB has said the UK needs a plan and not bans for better energy independence and prosperity.”

National emergency

The proposed closure is a real and immediate British national emergency and demands an emergency response. This move from Petroineos is no more than another instance of capitalism’s longstanding failure, north and south of the border, to build an industrial strategy. We need an industrial strategy, based on planning, investment and the skilled, well-paid manufacturing and engineering jobs that go with it.

The Green/SNP coalition presently misgoverning Scotland talks endlessly about thousands of green jobs in renewable energy – always in future years. But all the while thousands of essential highly-skilled, highly-paid jobs in oil and gas are disappearing right now. The coalition even claimed in 2020 that 300,000 jobs would be created by exporting green hydrogen to Germany.

This is a pipe dream. Fictitious jobs tomorrow are no substitute for jobs lost today. The SNP/Green rhetoric is net zero, but the reality is net job loss, and the destruction of the oil and gas industry that is needed to underpin any transition to a greener future. The only transition happening now is the transition of skilled oil and gas workers going abroad.

Scuppered

There was a plan to develop and use the huge shale gas deposits right under the Grangemouth plant, but SNP/Green opposition scuppered that. This could have created a whole new Scottish industry.

If the closure of Grangemouth goes ahead, it would grant the coalition their “Just Stop Oil” wish. The prospect of closure will delight the SNP and the Greens because they want to end fossil fuel production and refining, whatever the cost to the well-being and fuel security of the people of Scotland and (still less of course) of Britain as a whole.