Analysis

Why we shouldn’t save Grangemouth

by | 11 Apr 2024

It's not that the environmental case for Grangemouth is bad, it's that the economic case is. In a time of difficult choices, Scotland must look forwards.

First published by The National

At the start of a week in which the European Court of Human Rights found Switzerland culpable for failing to act on climate change, Scotland is debating the future of an oil refinery.

Clearly I’m a strong believer in the need to take urgent climate action, but I’m also a realist and a pragmatist. We’re stuck with petrochemicals until we phase them out, so if we could keep the refinery at Grangemouth open for another decade or two I’d be all for it. It isn’t going to produce any more emissions than the alternative.

But that only applies if no public investment would be needed, and that’s not the case. In 2013 the Scottish Government tried and failed to find a buyer for Grangemouth and it has been run down further since. No-one wanted to buy it in 2013, no-one wants to buy it now, so taxpayers would have to pay – at the expense of investing in something else.

To give you a sense of scale, significant public money was put behind the plant in 2013, including a £230 million loan guarantee. That saved about 1,300 jobs for ten years. Saving them again would be much more expensive.

And that is before you realise that rising sea levels mean Grangemouth will be under water soon. While parts of Falkirk will be abandoned to the see, there is a plan to spend £500 million on an experimental sea wall to save the part of Grangemouth where the refinery is (because corporations always come before citizens). Do you really believe that cost won’t double?

Nationalisation would be a massive investment which would require us to maximise the return. But Grangemouth mainly produces fuel for the UK and, over the investment period, we must substantially reduce our fossil fuel use or we too will be up in front of court. The domestic need for an oil refinery is going to reduce sharply in the fairly near future.

So this isn’t a case of ‘inexpensive patch-up to keep it going a bit longer while we transition’, like we did with our nuclear plants. Only pumping more and more oil would recover the cost. Buying Grangemouth doesn’t help a just transition, it slows it down massively. It traps us into an oil economy.

This certainly isn’t justified environmentally. Please don’t be taken in by oil industry propaganda; refining our oil elsewhere in Europe would only add about half a kilogramme of emissions to a barrel of oil that will release more than 800 times as much. If we need to pump more oil to sustain a business case for Grangemouth, the environmental impact is dreadful.

The reality is that any investment in this plant would be backwards-looking, that if we spend on this we fail to spend on much more important forward-looking industries

Can we really justify this kind of investment for a creaking-old plant which hasn’t been maintained properly in an industry in decline and which will face increasing legal pressures, in a site which will be under water if we don’t spend potentially a billion pounds – doing real damage to the planet in the process? That’s where my pragmatism reaches its end point.

Meanwhile Scotland’s failure to produce a renewables manufacturing industry is becoming legend. Analysis after analysis says that there are many multiples of the 1,300 jobs at Grangemouth that could be created in the renewable sector.

These are high-quality jobs that will underpin Scotland’s future. We’re failing to secure that future because, rather than investing in the sector, we are simply inviting foreign corporations to exploit our renewables for their benefit. The priority must be to invest to break that cycle and stop the wealth extraction. We’re not manufacturing, we’re being exploited.

The business case for Grangemouth doesn’t stack up. The environmental case for Grangemouth doesn’t stack up. There is a reason no-one is seriously talking about this as a course of action. It’s just more noise distracting us from reality.

The reality is that any investment in this plant would be backwards-looking, that if we spend on this we fail to spend on much more important forward-looking industries, that Scotland has been talking big on ‘just transition’ but has done next to nothing about it, that we miss targets for high-quality renewable manufacturing jobs by miles, year on year.

Major errors in an industrial strategy for Scotland were made on our behalf 50 years ago and the inevitable closure of Grangemouth is a contemporary symptom of that. Precisely the same mistakes are being made with renewable energy now. We have limited resources and must choose the future, not the past.

So I’ll tell you what; when there is a credible plan for creating a large-scale domestically-owned renewables industry with substantial manufacturing in Scotland and that plan has serious money behind it, if at that point there is money left over, then I’m willing to talk seriously about Grangemouth.

Until then, ‘saving Grangemouth’ is not economically sound, scientifically necessary, meteorologically sensible, environmentally justifiable or morally right. We must accept past failures and make sure we don’t repeat them. Grangemouth is not an opportunity, it’s a lesson.

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