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The refinery that supplies much of Scotland and northern England’s petrol and diesel could be at risk of cutbacks or even closure if Labour pushes ahead with plans to ban new oil and gas projects in the North Sea, its owners have warned.
Andrew Gardner, the chairman of Petroineos, said Sir Keir Starmer’s promise to block new fossil fuel developments risked starving the Grangemouth refinery of feedstock and could threaten its existence.
He said: “We want to keep jobs and manufacturing here but Labour hasn’t understood that we need supplies. I need natural gas, ready, cheap and available as a feedstock.”
Mr Gardner delivered his warning about the site’s future directly to Labour’s leaders last week, leading a delegation of Ineos executives at the party’s annual conference in Liverpool. He has also met with Sir Keir.
Grangemouth, which is part of Sir Jim Ratcliffe’s Ineos empire, is Scotland’s only remaining crude oil refinery, producing most of the petrol, diesel, heating oil and aviation fuel used in Scotland and other markets in northern England and Northern Ireland.
It also supplies raw materials to the adjacent petrochemical and plastics plant run by Ineos Olefins and Polymers whose raw plastics and polymers go into UK products ranging from construction materials to clothing.
Grangemouth relies on oil and gas from the North Sea for energy and raw materials and is fed by a direct pipeline linking it to 80 of the UK’s offshore oil and gas fields.
Most of those fields are in decline but would normally be replaced by new wells. However, Labour plans to ban such new drilling if it wins power.
The Grangemouth plant, run by Petroineos, employs more than 2,000 workers and Mr Gardner’s warning prompted union chiefs to warn that North Sea workers risked becoming “the coal miners of our generation”.
Ineos hopes to build a plant at Grangemouth that will turn natural gas into hydrogen, powering the entire complex with minimal emissions and preserving jobs and manufacturing. However, the scheme relies on having long-term supplies of natural gas.
Mr Gardner said: “Our passion is to keep manufacturing in the UK and Europe. This is a critical time because parts of society want to outsource manufacturing, outsource jobs and import carbon.
“And what I say is no, the best way is to absolutely turn that on its head. We want to stay in the UK and Europe, and we want to decarbonize in the UK, while keeping the manufacturing and jobs here.”
A Labour spokesman declined to answer Gardner’s specific points but said: “Labour has committed to delivering industrial decarbonisation in Grangemouth, with a plan to invest £1bn across the country in protecting thousands of jobs in heavy industry as well as creating many more in CCS and hydrogen.”