Cathie Lloyd on how last month’s announcement that oil refinement is to end at Grangemouth brings into focus a range of crucial issues.
Grangemouth’s owners Petroineos (a joint venture between Chinese state-owned PetroChina and London-based Ineos) presented their decision as a ‘Refinery Transition Project’, in which the oil refinery will close by the spring of 2025, with the site being converted into a fuel import terminal.
The impact on the local community and economy will be considerable, involving the loss of many jobs from a workforce of approximately 500, plus contractors and suppliers.
Petroineos has said that it is evaluating several new approaches including a bio-refinery facility at Grangemouth – and we should accept that this could represent a positive opportunity.
But – a number of problematic issues need highlighting. Even though this is a major decision in the energy-generation business in Scotland, it is not neatly integrated into a strategy to address the climate crisis, which is leading – amongst many other problems – to increasingly violent weather and storms affecting our communities.
Instead, Petroineous state that the reason for their decision is ‘growing international competition’, and they are looking to expand diesel import at Finnart on the Clyde.
Furthermore, the decision-making process – and the levers which might make the most of any positive results from bio-refinement – are not in the hands of democratically elected Scottish politicians. This was made clear by Neil Gray, the SNP MSP for Airdrie and Shotts and the Scottish Cabinet Secretary for Wellbeing, Economy, Fair Work and Energy, in a letter he wrote to the UK Government calling for an urgent meeting.
The Scottish government was not even consulted about the Grangemouth announcement and has expressed serious concern over the loss of employment and the impact on energy security (together with Labour’s Ed Miliband and the trade union Unite).
It’s worth noting that this kind of disdain for the legitimate interests and the rights of Scottish parliamentarians has also been expressed in the condescending and belittling tone in some UK media outlets to Angus Robertson MSP’s visit to China last month. Scotland's Cabinet Secretary for the Constitution, External Affairs and Culture met Chinese government officials to promote business and cultural ties while discussing the shared challenge of the climate-biodiversity crisis. This is entirely proper activity for the cabinet member, in line with the democratically-elected government’s ambitions – but some pundits presented it as if Robertson was ‘getting above his station’.
What ways forward?
Reactions to the Grangemouth decision from the environmental movement expressed concerns about sudden changes motivated by profit, with Future Economy Scotland and Friends of the Earth commenting on the failure to plan for the transition.
What are the positive steps that should be taken in relation to energy production – and to ensuring that our economy and that our communities benefit?
Hydrogen production will surely play a big part. The Scottish Government has announced the acceleration of plans to export green hydrogen, including developing a hydrogen innovation hub at Glasgow Airport for storage and distribution; a scheme using waste heat from wind turbines on the Isle of Lewis to create the fuel; and carrying out a study into treating water from the River Clyde to produce hydrogen cheaply. These initiatives are in line with and in some cases funded through the wider Scottish government plan to use the Emerging Energy Technologies Fund (EETF), a £180m package of funding, to accelerate low-carbon infrastructure projects and unlock private sector co-investment.
Whilst we have to develop the right technology, issues of ownership and control are crucial. Developments in Grangemouth and the hydrogen pipelines raise issues about who is in control of key parts of our economy and the difficulties where industry is not accountable to the local community, so that plans for change do not necessarily complement a strategy for a ‘just transition’.
At present the Scottish Government’s powers over energy are limited. The independence paper A stronger economy and industry (June 2022) outlined other models we could draw on from elsewhere, as in governments having a majority share in key enterprises. But this would involve immense amounts of capital which we do not have.
Until we can afford a public stake in new ventures we are exposed to the vagaries of unaccountable corporate global capital. Community involvement in a managed transition in Grangemouth was discussed in a Holyrood Committee in June 2023. Ventures such as Acorn (based in Aberdeen) were seen as key to the future: the projects being developed by this business joint venture are designed to enable the decarbonisation of crucial elements of everyday life which generate greenhouse gases – at work, at home, and in our leisure time. However, decisions about whether and how to support and expand such initiatives rest with the UK government.
This article is based on part of Cathie Lloyd’s December 2023 ‘Environment Report’ to her SNP branch in Edinburgh.