Refinery shut down by strikes to cause large fuel shortage

[Dartzap]

Beeb

Shutdown 'risks petrol shortages'

Bosses at Scotland's only crude oil refinery have started a shutdown after claiming an impending strike will compromise safety.

Ineos said the Grangemouth refinery could shut for "at least a month", and warned of major fuel shortages.

About 1,200 members of the Unite union are to strike on 27 and 28 April in a dispute over pensions.

Scottish ministers urged both sides to try to resolve the dispute, instead of "trading commentary" in the media.

The Unite union said Ineos' proposed pension changes were "unreasonable".

Ineos said in a statement that it had taken the decision to start shutting down the Grangemouth facility on safety grounds.

The statement added: "Fuel shortages are likely to begin in Scotland as early as Friday 25 April and the whole of Scotland could be without fuel for at least a month.

"It is important that the plant is not only shut down safely but also remains safe through the strike period and this process can take many days."

The first stage of the closure began on Friday night, with the first plant on the site due to shut completely on Monday.

The remaining plants would be taken offline in a phased shutdown which would be completed by Friday.

The statement said that the action would also effectively shut down much of the North Sea's oil and gas production, a large proportion of which goes through Grangemouth, causing supplies to dry up and leading to shortages across Scotland and the north of England.

Grangemouth supplies Scotland, Cumbria, Northumberland and parts of Yorkshire.

'Panic buying'

Geoff Dossetter, of the Freight Transport Association, told BBC Radio Five Live he was concerned the shutdown could spark panic buying.

"That starts off for fuel but then of course the next step is to be concerned about the delivery of goods to shops and so on - this is where my members within the Freight Transport Association have some concern."

The Scottish Motor Trade Association, which acts for petrol retailers, urged drivers not to fill up tanks as shortages were often sparked by such panic buying.



Tom Crotty, CEO of Ineos Olefins, said the union was "well aware" a 48-hour strike would cause "fuel chaos" in Scotland and the north of England.

"This is a huge oil refinery and they know you can't just turn it on and off like a tap. A month is our best guess but safety considerations will be at the forefront of everything we do.

"They have deliberately chosen a course of action that is the minimum pain for them, but which will inflict the maximum pain on Scotland and the whole UK."

Mr Crotty described the union's claim that the refinery made £3m a day as "nonsense" and said Ineos needed to invest £750m into the site.

He claimed that the strike threatened that investment, as well as hundreds of jobs, and would damage the UK economy.

Talks urged

Phil McNulty, national officer of Unite, insisted that the company was profitable and the pension scheme was well-funded and affordable.

The union has previously said that Ineos is planning to close the final salary pension scheme after taking £40m from it and slashing its own contributions.

Mr McNulty added: "The changes to the scheme Ineos are proposing are unreasonable, unnecessary and have forced our members at Grangemouth to take industrial action for the first time."

Scottish ministers said contingency measures were already in place and they were being kept informed by the UK Government, which has responsibility for continuity of oil, gas and fuel supplies.

A spokeswoman added: "The Scottish Government is closely monitoring the situation and is fully aware of the potential disruption that could arise.

"The Scottish Government is calling on both sides to get together to negotiate and resolve their differences to avert this action, rather than trading commentary in the media."

Ineos acquired the Grangemouth site from BP in 2005 and is now the biggest privately-owned chemical business in the UK.

Well, I could make a pithy comment about Scotsmen needing the exercise...

Still, it will last a month. Will they manage that without rioting? Will the Gov (be iit Westminster or Holyrood) kick someone's arse if it gets out of hand?

[Jade Falcon]

Mind clarifying what the hell you mean by rioting?

[Admiral Valdemar]

Hoarding, yes. Rioting? Only if the most inept government in the world stirred the pot. Hardly likely and I expect Ineos to falter sooner rather than later.

[Jade Falcon]

Remember the last time there was the nationwide fuel protests, some folk were buying up like it was going to be the end of the world the next day.

[J]

1/9th of the UK's oil refining capacity going poof will not be a good thing. When a refinery went down in Ontario last year, gas stations were out of fuel within days even though we were receiving imports from the rest of Canada and parts of the US. Gas prices went up by a third in around two weeks, and we continued to have shortages for some time after the refinery was restored to full operation.

Looking at the big picture, this is not going to be fun for the US. In the last couple years the US has been importing large amounts of fuel from Europe, the UK will now be competing for those imports and that's going to do wonders for fuel prices.

[MKSheppard]

So um, you know, it would be nice if we did have more backup refineries, or ones running at substantially less capacity so that such random events can't screw us over.

[J]

If by "we" you mean the US, well, you guys are running at around 81% utilization right now. I'm not sure of the UK situation, but I'd guess it's rather similar to Canada since we have around the same number of refineries and roughly equal oil consumption. Probably a bit better since we use more oil than they do, but I don't think they'd have more than 10% or so of spare capacity.

Thing is it costs money to run refineries and crack spreads (how much money is made by refining oil) suck these days so it doesn't make financial sense to build more. Oil companies need their money so they can do evil oil company stuff, buying politicians & governments isn't cheap these days...

[Dartzap]

Mind clarifying what the hell you mean by rioting?

That was sarcasm. Admittedly I forgot to add the emoticon at the time

[Jade Falcon]

Well I was at a petrol station today, and while the station at Morrisons is usually quite busy, they had to use staff to direct vehicles in. It was damned busy and obviously there was a panic buying. I usually find £15 lasts me a week on my admittedly larger 2.8 litre Passat, as I don't do a hell of a lot of driving especially long distance, but I put in £20 just in case.

Hopefully emergency services and so on still maintain their own strategic reserves and don't get affected.

[Admiral Valdemar]

My local stations were also busy. There were quite a few trucks as well since the loading base near Alconbury gets quite a lot of traffic.

I hear panic buying is taking hold even though the BBC and others seem to have buried the news.

Expect prices to go up dramatically he this isn't rectified soon.

[Jade Falcon]

My local stations were also busy. There were quite a few trucks as well since the loading base near Alconbury gets quite a lot of traffic.

I hear panic buying is taking hold even though the BBC and others seem to have buried the news.

Expect prices to go up dramatically he this isn't rectified soon.

Prices keep going up anyway, a couple of months ago a litre of unleaded was 99.9p. Now I know some places are more expensive, and supermarket filling stations were generally cheaper than ones like BP, Shell etc, but there's been a lot of gradual raises.

[Admiral Valdemar]

A thirty-one percent increase since '05. The majority down to oil prices, not the government as others would have you believe.

[Bedlam]

My local stations were also busy. There were quite a few trucks as well since the loading base near Alconbury gets quite a lot of traffic.

I hear panic buying is taking hold even though the BBC and others seem to have buried the news.

Expect prices to go up dramatically he this isn't rectified soon.

You obviously haven't been reading any of the Scottish Versions of the Newspapers. It was on the cover of all of them yesterday and most of them today (Mostly large panic inducing headlines telling you not to panic).

[Jade Falcon]

I only put fuel in today, because I have a club I go to on Tuesdays, so I either put it in on Mondays or Tuesdays anyway. There was a BP station round the corner that seemed quieter, though I'm not totally sure as its in the middle of a one way system and I believe in watching the road.

[Admiral Valdemar]

You obviously haven't been reading any of the Scottish Versions of the Newspapers. It was on the cover of all of them yesterday and most of them today (Mostly large panic inducing headlines telling you not to panic).

Living in England, I doubt I'd be reading them.

The Daily Wail did have a big bit on it, but not a cover headline. Likely due to lack of house price effecting action from this.

[Mayabird]

If the right lesson was reaching people, a few little shocks might be a good thing in the long run if it gets more people to stop or lower their amount of driving, use public transportation, or really get people thinking about how oil's going to run out eventually and they'd really better start looking into something else. It can be done, and is happening here in Washington.

Of course, it requires that people actually get the right lesson instead of whining about being inconvenienced now.

[Jade Falcon]

To tell you the truth, I couldn't really lessen it much more, a few trips once or twice a week into town and once a week to a club is what I do. I'm not really driving a great deal. My insurance is in the minimum for mileage, which is less than 4000 miles a year and I'm sure its well below that. The public transport here is of mixed quality (Stagecoach buses are bloody expensive) and when theres times that you need a lot of shopping they're not practical.

However, in contrast, the types that feel they need to drive something the size of a Humvee to get a pint of milk is a bit over the top. I visited a friend in Glasgow at the weekend and it was a helluva lot easier to use the train as I wouldn't dream of driving in Glasgow.

[Admiral Valdemar]

The Forties field is being locked down. That's 700 kilo-barrels a day of product that's going nowhere. The markets have just done a moonshot for £120/bbl. oil, likely because of this and the hilarious news that OPEC will boost production. In 2012.

So that's a potential petrol shortage to go with diesel along with oil being kept off the market, potentially mega-barrels by the end of this, and natural gas for St. Fergus won't be going anywhere too (Grangemouth is needed to sort out the condensates in the gas).

Gonna be a hell of a ride if these talks fall through.

[Dartzap]

(Stagecoach buses are bloody expensive

That's because they are competing with First in America The constant rise in fairs here is to improve services over there

[Dartzap]

Fares, even, bah.

Anyway: Is there a reason why the Beeb have been pretty much ignoring this? Are they trying to reduce the panic buying or are they being South-East centric bastards again?

[Coyote]

There'll be food riots before there's gas riots, but that's just my guess....

Although during the Katrina crisis, when US gas first hit the $3.00-mark, I heard stories of fuel trucks being attacked and fuel taken. I don't know if it was urban legend or not, but it wouldn't surprise me to see that again.

I think in the United States we'll be seeing $4.50 a gallon by the end of the year if so much as one refinery stumbles for any reason.

[Admiral Valdemar]

Fares, even, bah.

Anyway: Is there a reason why the Beeb have been pretty much ignoring this? Are they trying to reduce the panic buying or are they being South-East centric bastards again?

Yes. To both counts.

[J]

The Forties field is being locked down. That's 700 kilo-barrels a day of product that's going nowhere. The markets have just done a moonshot for £120/bbl. oil, likely because of this and the hilarious news that OPEC will boost production. In 2012.

So that's a potential petrol shortage to go with diesel along with oil being kept off the market, potentially mega-barrels by the end of this, and natural gas for St. Fergus won't be going anywhere too (Grangemouth is needed to sort out the condensates in the gas).

Gonna be a hell of a ride if these talks fall through.

Ouch, something tells me the US oil inventory report is going to be quite ugly for the next little while. I expect to see the words "unexpectedly large drawdown in crude and products" in quite a few headlines in coming weeks, of course it's not exactly unexpected to anyone who's keeping track of things on the ground level. We might well see a repeat of last summer where the US went from near record high inventories to barely above minimum operable level, except this time it starts well before driving season.

[Genii Lodus]

Not that there was much chance of avoiding the strike anyway but it's definitely going ahead now.

Source

Refinery strike talks break down

A strike which could close down Scotland's only oil refinery will go ahead after talks between the Unite union and plant bosses broke down.

Operators Ineos and the union held two days of talks at conciliation service Acas in a bid to halt the strike by workers at the Grangemouth plant.

Up to 1,200 workers will walk out on Sunday and Monday over proposals to change pension scheme arrangements.

The refinery processes 210,000 barrels of oil a day.

Pension plans

The union announced on Wednesday evening that the talks, which began on Tuesday afternoon, had failed to find a breakthrough.

The strike had been called in protest at plans by Ineos to close its final salary pension scheme to new workers and to make other changes to its pensions.

A union spokesman said: "Unite's negotiators were disappointed with the company's refusal to withdraw controversial pensions plans and therefore the two-day strike will go ahead.

"Although the strike has not been averted, Unite and the company have reached an agreement that will maintain the safety of the site and the integrity of the plant for the duration of the dispute."

Round-up of fuel availability across Scotland

A statement from Acas said that although the two sides had not come to an agreement, time had been spent addressing the issue of safety and the integrity of the Grangemouth site during the strike.

It said: "An agreement covering these issues has been reached for the period of the dispute.

"Acas has advised both the company and Unite that the opportunity to seek assistance of Acas to pursue an agreement has been offered."

Ineos has already started shutting down Grangemouth and warned of fuel shortages from later this week if the strike went ahead.

The petrol station at the Tesco's I work at ran out of diesel at around 4 today and was running rather low on unleaded by the time I left at 9. I hope the government has made arrangements to ensure critical workers can still get fuel during the strike.

It's annoying that such a critical part of the country's infrastructure is run with no spare capacity. There's no incentive for the oil companies to build further refineries really since they can always increase prices and keep up their profits whenever a refinery is down for whatever reason. I'd be wholly in favour of a huge special tax imposed on the oil companies to be earmarked for improving the country's energy security but that's a rather unlikely prospect.

[Jade Falcon]

Of course, the trouble with building either new refineries or expanding existing ones are the NIMBY brigade.