Calls For Intervention To Keep Grangemouth Refinery Open

Sandy Easdale at McGill’s Buses Greenock HQ. Image - Robert Perry 

Scotland and the UK could face an energy security risk by shutting Grangemouth oil refinery, according to a leading businessman.

In a rare interview, Sandy Easdale told The Herald of his fears over the potential impact of the closure of the plant amid global uncertainty with wars raging in the middle east and Ukraine.

Mr Easdale, who along with his brother James, run successful enterprises in a wide range of sectors including transport, manufacturing, property and investment, appealed to both the UK and Scottish Governments to intervene and keep the refinery open even on a smaller scale.

Speaking about the planned closure of the Grangemouth next Spring, with the loss of 400 jobs, Mr Easdale, who is based in Greenock, said the pending closure was an issue of national concern.

"I am not a believer of government interference in business. But I think the government need to have a look at this position in an ongoing way," he said.

"We are in a situation where we could lose one of the last refineries in Scotland if not in the UK where we produce our own fuels."

He added: "I think the risk of national security for our fuel is worth more than the risk of it closing".

Mr Easdale went on to say both the UK and Scottish Governments could look at covering the losses and keep the plant open on a more limited scale.

"I think it is important to Scotland and the UK to keep a refinery in Grangemouth. The way the world now is it is a risk to close it".

Mr Easdale, who owns one of the UK's largest private bus operators McGill's, went on to say that even while most of his company's fleet of vehicle is electric it still spends around £1 million a month on diesel.

"If anything happened to the fuel supply it would affect passenger transport," he added.

"On a national security problem, I think the government should step in to keep it going even if they scaled it back".

The entrepreneur also spoke about his concern over support for the North Sea oil and gas industry.

The Labour Government has said it will not grant new licenses for exploration though it will allow drilling to go ahead in fields licenses have already been issued for, while the Scottish Government is due to bring out a new energy strategy.

Industry figures will be watching closely if the new policy advocates a presumption against new licensing as advocated by former First Minister Nicola Sturgeon.

"We live in Scotland, we produce oil in Scotland and to take that away is going to be a catastrophe for the whole of the north of Scotland," Mr Easdale noted.

Petroineos, owner of the Grangemouth oil refinery, announced last month the facility will close in the second quarter of next year and for the site to be turned into a fuels import terminal.

Frank Demay, the firm's chief executive, blamed falling demand for petrol and diesel cars and a surge in maintenance costs for the closure of the loss-making facility on the Firth of Forth.

The firm, a joint venture between PetroChina and Sir Jim Ratcliffe's Ineos, noted it was the UK's oldest refinery and was "increasingly unable to compete with bigger, more modern and efficient sites in the Middle East, Asia and Africa."

It said shareholders had invested over $1.2billion (£920million) in the site since 2011 to maintain its "safe operation" but it had recorded losses of more than $775million over the same period.

But the decision angered Ed Miliband, the energy secretary, who said he was "deeply disappointed."

First Minister John Swinney told MSPs that the UK and Scottish Governments had lobbied for "refining to be continued for as long as it was possible" and its closure would cause a "significant economic shock".

Both governments last month announced a joint three-point plan, including an extra £20 million support package, career support for workers made redundant and investment to encourage the production of green fuels at the site.

Project Willow, which was previously set up to look at future prospects for the site, is said to have identified three credible options - low-carbon hydrogen, clean eFuels, or sustainable aviation fuels.

The closure of the refinery would leave Scotland and the north of England more dependent on imported fuel.

The site supplies 80% of Scotland's fuel and accounts for four per cent of the country's GDP and eight per cent of the manufacturing base.

Around 2,000 people are directly employed at Grangemouth including 475 at the refinery. Only around 75 of the refinery workers would be needed for the planned import terminal.

Mr Demay said last month: "Demand for key fuels we produce at Grangemouth has already started to decline and, with a ban on new petrol and diesel cars due to come into force within the next decade, we foresee that the market for those fuels will shrink further.

"That reality, aligned with the cost of maintaining a refinery built half a century ago, means we are exploring ways to adapt our business."

He said Grangemouth would operate as "a national distribution hub for finished fuels" following the refinery's closure but this "would require only about one-fifth of the refinery workforce".

Kenny MacAskill, Alba's acting leader, who has been campaigning to keep the Grangemouth refinery open, welcomed Mr Easdale's comments.

"Sandy Easdale is spot on. Grangemouth is a national strategic asset which must be saved for energy security, to ensure Scotland as an oil producing nation continues to have an oil refining capacity and so that jobs and skills are retained for the future. Without that there can be no transition to hydrogen and biofuels."

A spokesperson for the UK's Department of Energy Security and Net Zero said:  “The decision by PetroIneos to close the refinery is deeply regrettable, and we will leave no stone unturned as we continue to work with affected workers, relevant trade unions, and the local community.

“Alongside the Scottish Government, we have worked at pace secure additional funding for the Falkirk and Grangemouth Growth Deal to invest in the local workforce, and help those affected find good, alternative jobs.

“We are also focused on finding a clean energy future for Grangemouth, including options in sustainable aviation fuels, hydrogen, and low carbon energy.”

The Scottish Government was approached for comment.

This article appeared in The Herald.