Grangemouth: 'We could still clutch victory.... but you need to hurry up'

The sense of betrayal in the industrial town of Grangemouth is profound. Many current and former Petroineos workers feel badly let down by a Labour Party which only last year promised to save the jobs at the now closed oil refinery – that much is clear when talking to local Cliff Bowen.

For him, the betrayal is two-fold. Not only has he watched friends and colleagues lose their jobs despite the promises, but as a lifelong Labour supporter he campaigned to get those who made those promises into government.

“It’s heartbreaking for the communities and it’s heartbreaking as a Labour voter and as a member of the party,” he says. “My whole values, my whole life has been Labour, and they’ve got into power, and they’ve turned their back on us.”

The closure of the oil refinery – Scotland’s last – earlier this year means hundreds of people were made redundant. The site is instead being turned into a fuel imports terminal, which only requires a fraction of the workforce.

They don’t want to listen to us, and we’ve to lose our jobs, well, so should they

And it’s not just Grangemouth. Lindsey Oil Refinery in Lincolnshire is also currently at risk after its owner, the Prax Group, went into administration. At the end of September, a third of the workforce were told they would be made redundant.

It was the final straw for trade union Unite. Bowen, who sits on the union’s executive council, explains: “I’m sitting here, two communities devastated, and all we get is ‘we’re sorry’. Empty promises of just transition [are] ringing in these workers’ ears.”

And so Unite called for the resignation of energy secretary Ed Miliband and his junior minister Michael Shanks. Bowen says: “It’s with heavy hearts when we talk about the removal of ministers – I know Michael and I know Ed. I’ve got a working relationship with them. They’re nice people. But they’re not listening. And ultimately, our communities are being wrecked and if they don’t want to listen to us, and we’ve to lose our jobs, well, so should they.”

There’s even been talk about the union disaffiliating from Labour completely, which Bowen admits he’s finding increasingly difficult to argue against. He believes Labour is in for a rude awakening in these areas in next year’s Holyrood election, setting aside the current national mood against the UK Government. “Who’s going to vote for Labour in this area? The answer is nobody,” he says.

Shanks, who spoke to Holyrood before Unite’s call for him to go, accepts what has happened at the refinery is “not how we should be doing the transition” and describes it as “hugely regrettable”.

We see Grangemouth as a hugely investable proposition

He blames the previous UK Government for not doing enough to prevent the job losses. “We came into government understanding what was happening at Grangemouth and assuming that the previous government had done some kind of planning, at least that the Scottish Government had done some kind of planning, but there was no plan in place.”

Efforts are underway to remedy this, and that means supporting more than just those impacted by the refinery closure. The Grangemouth industrial complex is home to several heavy industries, including the Forties Pipeline System, a petrochemical plant, and an industrial port. All of these will need to change how they work if Scotland is to reach net zero by 2045.

And beyond the need to decarbonise, this site is also a vital piece of Scotland’s green future. The location, geography and access to local expertise (for now) mean it could become a powerhouse for clean industry.

Project Willow is one of the first pillars of creating that future. Published in March, this feasibility study identified nine options which could reinvigorate the area, from waste recycling to sustainable aviation fuel production. It has been supported by both governments, with the UK Government ringfencing £200m from the National Wealth Fund to support the first projects, while the Scottish Government has created a £25m just transition fund.

Shanks says: “We see Grangemouth as a hugely investable proposition, but we’re also determined that there’s an industrial future on that site and there’s some really exciting proposals coming forward.

“We’ve taken a real active interest in this. I’ve met potential companies to hear their plans to see what government can do to move it forward faster, to be right in there in the detail of it, because this isn’t something we want to be passive on. We’re driving it forward and really excited that some of those will be quite near-term opportunities that will create jobs in Grangemouth.”

Holyrood understands the first investors and projects will be announced before the end of the year. What happens after that will also need to be carefully managed because each phase is contingent on previous steps, with Willow’s preferred projects interconnected to maximise the potential at the site. Yet insiders are concerned there is a lack of central oversight to bring all the stakeholders together and get everything moving in the same direction.

That’s a challenge that’s been acknowledged by Scottish Enterprise, the government’s economic development agency. The appointment of a shared cluster management organisation is one of the priority steps outlined in its new Grangemouth Industrial Cluster Strategy (GICS). This management organisation with be a public/private partnership, with the Scottish Government and the Grangemouth Future Industry Board moving at pace to set it up.

GICS sets a pathway out to 2045 to turn Grangemouth into a “net zero chemicals centre for Scotland and a leading production centre of the UK’s low-carbon energy industry, supporting the developing biofuels and hydrogen sectors, and playing a key role in ensuring Scotland’s energy security and economic prosperity.” Hopes are high that the site – and the town – will go on to enjoy a successful future.

But that does little to help those struggling and left without work now. As Bowen points out, while Project Willow is “absolutely welcome” – he sits on the programme board – it is only set to create a small number of jobs in the short-term. “We need thousands of jobs if we’re truly going to transition this area. That’s the truth of the matter.”

The canary

“The Grangemouth case is the energy transition’s canary in a coalmine,” warns Westminster’s Scottish Affairs Committee. In a report on the future of oil and gas, MPs agree the refinery closure “illustrated the need for government’s active stewardship” of the transition. It goes on to argue that both governments “should have acted sooner” and that not doing so had “created an employment gap and trauma for the local community that could have been avoided”.

MPs also say lessons must be learned to ensure the mistakes at Grangemouth aren’t repeated in industrial communities the length and breadth of Scotland – particularly in the north east.

These concerns were echoed at the recent Just Transition Summit in Edinburgh, where Grangemouth was never far from anyone’s lips. The summit, hosted by the Just Transition Commission, brought together stakeholders from politics, industry, trade unions and environmental groups. The failure to provide a just transition for refinery workers united them all, setting alarm bells going on the wider transition.

Yet the other major message from the summit is not to back down on net zero. While in some political quarters there are calls to ditch climate commitments and go all-in on fossil fuels, experts highlight that a transition is coming regardless because North Sea oil and gas reserves are finite. The only question is about how to do it fairly.

When it gets too late, the mental health issues, the economic dislocation and the waste of public money are all exacerbated

As Nigel Topping, chair of the Climate Change Committee, said in his address to delegates, the just transition is “both an opportunity and a need”. There are prizes to be won, he said, so long as policymakers “lean in” to the coming change and “call out” anyone claiming oil and gas jobs can be saved for the long-term.

“We need to work harder and be really honest about how we really turn the dialogues into plans that are action-oriented,” Topping continued. “It seems to me that Grangemouth was very foreseeable… So what are we doing wrong in not getting together representatives of the workforce, representatives of the businesses, representatives of local and other levels of government to figure out a plan before the proverbial hits the fan?

“Because when it gets too late, the mental health issues, the economic dislocation and the waste of public money are all exacerbated in a way that would have been addressable if we’d had a plan three to five years earlier. This is a relatively predictable transition, so it’s incumbent on all of us to work hard… It’s not individual jobs that we’re fighting for, it’s quality employment, it’s lives and livelihoods.”

Yet clearly the transition in Grangemouth and elsewhere is not yet resulting in the jobs boon talked up by politicians. A report by think tank Future Economy Scotland found only two new green jobs have been created for every three lost in oil and gas since 2014. “Left to market forces, this mismatch could cause economic disruption, unemployment, and regional decline,” it says. “If Scotland is to avoid repeating the mistakes of deindustrialisation, it is critical that accessible transition pathways are created for oil and gas workers, and that adequate support and funding is provided.”

In a bid to tackle this problem, the UK Government has published its Clean Jobs Plan. That sets a pathway to creating 40,000 new clean energy jobs in Scotland by 2030, with 860,000 jobs in total across the UK. Among those jobs are skilled trades deemed “priority occupations”, like plumbers, welders and electricians. It was welcomed by many of the trade unions (excluding, notably, Unite) and heads of industry.

“Our plans will help create an economy in which there is no need to leave your hometown just to find a decent job. Thanks to this government’s commitment to clean energy a generation of young people in Scotland can have well-paid secure jobs,” said Miliband.

Slow down

^{Credit: Alamy}

The problem is not just the slowness at which new clean jobs are coming online, however, but the rapidity at which fossil fuel jobs are being lost. In recent months, a growing consensus about the need to decelerate the wind-down of the North Sea appears to have been emerging.

The Scottish Government has stepped down its rhetoric on a presumption against new oil and gas licences. The Scottish Affairs Committee urged the UK Government to “avoid making decisions that would further accelerate oil and gas production’s decline”. And plenty of people in the sector have long warned the proper balance is not being struck.

Maggie McGinlay, chief executive of Energy Transition Zone (ETZ) Ltd, says having a “managed, seamless transition” requires recognising the role oil and gas has played and will continue to play even beyond 2045. “The thing that doesn’t work is to see it as oil and gas on one side of it, and low carbon and green energy at the other. This is an ‘and’. The thing that will ensure that [the transition] is just is if it’s managed well and managed smoothly, and therefore there’ll be a seamless transfer of jobs from oil and gas activity into some offshore wind activity, for example. Then gradually you’ll see people working more in offshore wind and less in oil and gas.”

ETZ, the brainchild of businessman Sir Ian Wood, is a not-for-profit company set up to support the energy transition in the north east. Its aim is to ensure Aberdeen continues to be a centre for excellence for energy, including providing support for the supply chain and new low-carbon technologies.

These are small to medium size [fields], but potentially high-impact

McGinlay says while there are “significant opportunities” to be had in growing clean energy and other low-carbon industries, the  “biggest risk” to that being realised is the erosion of the supply chain because of the too-fast decline in oil and gas. She says keeping the sector going is vital because it will help to “protect and sustain” the sector while the transition takes place.

This poses a difficult political problem for Labour. The party made a manifesto commitment last year not to issue licences to explore new fields and it would likely face significant backlash if it were to U-turn on that now, particularly in the context of an ascendent Green Party benefiting from left-leaning voters already unhappy with the government’s direction.

A “get-out-of-jail free card” has been offered by Professor John Underhill, the interdisciplinary director for energy transition at Aberdeen University. In a paper published in the summer, Underhill said the UK Government should scrap the current licensing regime and instead replace it with a more “pragmatic” approach which would allow “near-field exploration or infrastructure-led drilling around existing fields”.

“The Labour Party manifesto commitment could be upheld by saying the old licencing regime had its day but is no longer appropriate for the circumstances that the basin finds itself in – [that is,] in decline,” he tells Holyrood. “Then there’s a question of, do we do anything about the remaining reserves that have been identified, the discoveries made but have never been produced? These are small to medium size [fields], but potentially high-impact.”

He acknowledges that such a move may not go down will in all quarters, but the “inconvenient reality” is that three-quarters of the UK’s energy consumption is still being met by oil and gas, and fossil fuels will still be needed for some time to come.

At the moment, the UK can rely on Norway. “That is the lowest carbon footprint and best for an imperfect world,” he says, but adds that come 2050 – when the UK as a whole should have reached net zero – many of the current Norwegian fields will have ceased production, which means another source will be required. If that doesn’t come from domestic supply, it could leave the UK reliant on imports which not only would be expensive but also result in more emissions.

“You can effectively deindustrialise to decarbonise, but that would offshore our carbon footprint to another country,” he explains. “The UK’s carbon footprint comes down, it looks as though our emissions are coming down, but actually we’re importing so emissions globally are going up.”

We could still clutch victory. You’ve still got workers, not everybody’s left

In the months since he’s published his paper, he’s been pleased with the response it’s got from political leaders. Deputy First Minister Kate Forbes and Scottish energy secretary Gillian Martin have engaged, while it has also sparked conversations within the Department for Energy Security and Net Zero. Miliband is reportedly working on proposals to ensure the benefits of existing oil and gas fields can be maximised without have to allow completely new exploration.

Underhill continues: “In a way it’s inevitable, but energy seems to have become a bit of a polarised and politicised beast at the moment. For me, energy should transcend politics. This is too important for the country. It’s too important for Scotland. We’ve got to get this right, and so I’m hoping that the intervention that I’ve made will spark the conversation about what is the role, if any, of oil and gas in the transition, something that’s often ignored.”

The landscape is clearly evolving rapidly, with the realities of what is needed to properly plan the just transition starting to hit home after years of grand announcements. There’s even been talk of the energy profits levy being scrapped a year earlier than planned (a move which is hoped would encourage investment in the North Sea) at the next UK Budget, and the possibility of Rosebank, an oil field off the coast of Shetland, being approved has been floated.

As far as the former refinery workers at Grangemouth go, all is not yet over. The Scottish Government recently announced the Jobs Prioritisation Scheme, which means companies in receipt of grants from the Grangemouth Just Transition Fund will be obligated to prioritise those made redundant when recruiting for new roles.

Hope for the town has not been lost. Bowen says: “I think we could still clutch victory. You’ve still got workers, not everybody’s left. The skills are still there, but you need to get on it, you need to hurry up… This stuff is possible. I think Willow can work. I think these new technologies can work. This is not doom and gloom. There is a future in terms of these new technologies.”