The announcement by Keir Starmer of £200 million from the National Wealth Fund should kick-start serious development of opportunities for the future of Grangemouth, post the closure of its oil refining capacity, but still as a critical part of the Scottish economy.
“Grangemouth”, it should be clear, is not closing. Petroineos will continue to operate as an import terminal ensuring Scotland’s supply of fuels on which much of our economy will continue to run.
More broadly, the Grangemouth cluster is home to a variety of businesses not least the INEOS olefins and polymers business producing high-value petro-chemical products. These are the basics around which additional opportunities can now be planned. It will be equally important to safeguard what continues to exist and on which by far the larger number of jobs on the site depend.
The door is open to a transition which should and (as the refinery’s owners have pointed out) could have started years ago, utilising feedstocks and technologies consistent with the site’s history but capable of keeping it in business for many decades to come, without being fixated on a declining, heavily loss-making activity.
Under BP, Grangemouth developed as a vertically integrated complex. Over time, as circumstances change, the logic which dictated that structure also erodes. To put it mildly, it is prudent to plan for a different future rather than spend unproductive years pretending the status quo can be maintained.
© Andrew Milligan/PA WireYet, as ever in these situations, misinformation flourishes. It’s a long time since Grangemouth’s refining capacity was tied to North Sea production and in recent years less than ten per cent of what went through the refinery came via the Forties pipeline. Again, if that was considered a problem it is one which should have been acted upon years ago.
Hopefully, Starmer’s announcement and the imminent publication of Project Willow’s recommendations will draw a line under the political hypocrisy of recent weeks from those who have hastily repositioned themselves as believers in Grangemouth’s refining future. Let’s be clear, until now there was no industrial strategy for Grangemouth. Nothing. Zilch.
Gillian Martin, acting energy minister in the Scottish government, is one of the SNP’s more honest politicians. When challenged last September about her government’s lack of action over Grangemouth, she did not engage in empty rhetoric about battling night and day to save the refinery.
© Supplied by All-EnergyInstead, she gave a factual reply: “The Scottish Government and the UK Government have been a part of the Grangemouth Future Industries Board for the last 18 months. In that time the Scottish Government has made sure that its intentions have been to support the Grangemouth Growth Deal and to put funding on the table for Project Willow at the request of PetroIneos.” And that was it.
In other words, the two governments were operating on shared assumptions about Grangemouth’s future which did not include reversing the refinery closure decision which had eventually been announced in November 2023.
Between then and last July, little had actually happened in spite of timescales clearly closing in. In contrast, it was only after the General Election that a sense of urgency developed, with the two governments immediately agreeing to Project Willow and starting to put money on the table.
In short, the threat to oil refining at Grangemouth had developed in slow motion over years in the face of mounting losses, a hostile policy environment and decreasing business rationale. The real question, if one wishes to dwell on history, is why so little has been done to address these realities.
© Jane Barlow/PA WireConceivably, intervention by government, both Scottish and UK, could have pre-empted the refinery decision seven years ago. It certainly couldn’t have done so seven months ago. For any politician of a Nationalist or Tory persuasion to pretend otherwise is insulting to the intellect of workers and families most directly affected by events at Grangemouth.
As the Petroineos executive, Iain Hardie, who has devoted a working lifetime to the plant put it last November: “The men and women who work at Grangemouth deserve a more intelligent debate about their future than the one being played out by politicians and trade unions, who are naturally defensive at having missed the opportunities we gave them several years ago to talk to us about an orderly and fair transition away from fossil fuels to cleaner energy”.
Hopefully, that more intelligent debate can now take place. But it still needs to be accompanied by the determination to turn the recommendations of Project Willow into reality. Any fair-minded person might, when they see the report, be impressed by how much – rather than how little – has been achieved within seven months.
The feedstocks of Grangemouth’s future will change from the crude oil of the past to a variety of potential bio-feedstocks including waste, crop and timber alongside Scotland’s wind power surplus which can be turned into hydrogen and ammonia, rather than being taken south by interconnectors or – ludicrously – compensating operators because there is nowhere for their power to go. The door is open to other credible plans. Let a hundred flowers bloom!
If the years of inertia over the advancing fate of refining at Grangemouth are now at an end, then serious work can begin. But it will still require the same degree of focus, rigour and commitment that the past seven months have so belatedly provided.
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