Lifeline tankers stop country grinding to a halt

Published on Saturday 26 April 2008 19:49

SCOTLAND has been kept moving this weekend by a comprehensive plan to beat the fuel strike by refinery workers at Grangemouth.

But whether supplies will hold up over the coming days was hanging in the balance last night.

Tanker-loads of refined petrol and diesel bought at premium prices on the international market have been shipped into the Firth of Forth and then distributed to key storage sites to keep both the emergency services and the public supplied with fuel.

Scotland on Sunday can reveal that Ineos, the company which owns the Grangemouth refinery, has been paying around $1,100 a tonne for refined crude oil, about 20% more than normal.

It has also hired a fleet of tankers to bring the fuel to its Hound Point jetties on the south bank of the Forth, thereby circumventing the need to use the nearby refinery.

Yesterday, the last of the ships laden with fuel from Rotterdam docked at Hound Point just after lunchtime to deliver thousands more tonnes to Scotland's thirsty forecourts.

An industry insider who has been closely involved with negotiations to bring the dispute to a halt said Ineos was determined to beat the industrial action.

He said: "They are spending literally millions of dollars a day buying fuel from around the world to bring into the UK to keep the country running.

"There is a huge thirst for fuel in this country and the company will do everything in its power to ensure that that thirst is quenched."

Distribution of that fuel has been co-ordinated by an emergency committee comprising senior police officers, civil servants and industry representatives. They have drafted in about 80 extra tanker drivers from fleets across the UK to ensure that the fuel gets from the Firth of Forth to locations where it is most needed.

At times of national crisis, around 80 petrol stations across Scotland are designated in the National Emergency Fuel Plan (NEFP) to hold stocks.

These sites, such as Harthill Service Station on the M8, are chosen because of the size of their massive fuel reservoirs, the capacity of which far exceeds those found on normal-sized petrol forecourts.

As part of the Government's pre-planning for just such a fuel crisis, a list of professions has been drawn up which would, in times of rationing, qualify for petrol. At the top of the list are the police and armed forces, who would be expected to keep order and fuel supplies moving if the strikes were to escalate. It then moves down through the health professions, food manufacturing and farming to essential operations at nuclear sites.

Key transport workers and environmental health officials are also included.

In order to buy fuel, an individual has to show photographic identification, such as a warrant card, and also present a blue, laminated, A4-sized piece of plastic that confirms who they work for, the registration number and type of vehicle which qualifies for fuel.

What is left over once the designated tanks have been filled can be distributed to petrol stations which serve the general public.

When real shortages occur, as in the last fuel crisis in 2000 when oil refineries were blockaded by road hauliers in protest against price rises, the designated petrol stations are closed to the public. That has not happened yet as the fuel-supply plan has worked so far.

Even so, there are inherent flaws. The unloading of the extra fuel at the Hound Point jetty is handled by workers who belong to the same union, Unite, which has called the strike at Grangemouth. So too do many of the river boat pilots whose assistance is legally required to allow the giant tankers to navigate the Forth.

A slight escalation of the dispute could lead to the union pulling out its members in these key categories as well. Although there is an agreement between Ineos and the union to allow the offloading of fuel supplies for emergency workers, it does not extend to supplies for general use.

This could lead to severe fuel shortages if the strikes were to be renewed for longer periods.

The union source said: "The river pilot boats are an absolute necessity to ensure the tankers are able to operate. There is no use having a half-a-dozen oil tankers if there is no way of getting them up the Firth of Forth."

Another weak point is the supply of tanker drivers. Although there are around 3,000 of the specialist drivers in the UK, there may not be enough to cope with more additional seaborne tanker loads.

Yesterday, some petrol retailers in Scotland were starting to run dry because there were not enough drivers to take the imported fuel supplies from storage depots to garages.

The other flaw in the strategy is the behaviour of members of the public themselves.

Although panic-buying subsided yesterday throughout Scotland, earlier mass buying did cause shortages in some areas. This is why ministers, First Minister Alex Salmond at the forefront, have been at pains to get the 'don't panic' message across to the public.

If the plan holds, the Grangemouth refinery should reopen on Tuesday morning and be back to production later in the week. The 70 fields connected to Grangemouth should also be back pumping crude oil within seven days.

Around 700,000 barrels of oil – 35% of UK oil demand – pour through the pipeline from 70 North Sea rigs every day, making it one of the biggest suppliers to the market.

The closure today and tomorrow will have an economic impact of around 50m a day in lost production – half of which goes to the Treasury in duty.

But BP maintained that the extra supplies being brought in means the closure would have little impact on supplies to forecourt pumps, as 80% of the crude that comes in through the Forties pipeline goes straight to the export market.

The rest goes to the Grangemouth refinery, to be made into petroleum products that supply around 90% of the fuel needs of Scotland and some of northern England.

It is that 20% gap that the tanker imports are designed to fill.

The other eight refineries in England are also importing extra supplies to keep Britain's petrol and diesel pumps topped up.

BP said it could not say when the pipeline would be fully operational again after the resumption of power.

"There are 70 rigs that will have to gear up for production again, so it will take a few days," a spokesman said.

Further strike action is far from ruled out, although Unite has by law to give Ineos seven days' notice of further strike action. But, in theory, as officials have a mandate from their members to call further action, they could give notice shortly after the Grangemouth refinery starts gearing up for production again on Tuesday morning.