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The UK Oil Refining Industry

August 24, 2017

By Paul Homewood

 

 

https://i0.wp.com/www.ukpia.com/images/default-source/Homepage-Banners/home-refinery.jpg

 

Amidst all of the recent debate about electric cars, we have heard little about the impact on the UK’s oil refineries.

In 2013, the House of Commons Energy and Climate Change Committee published a report, “UK Oil Refining”, which laid out some of the facts about the industry, its importance to the national economy and the challenges it faced.

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oil

 

One of the seven, Milford Haven, has since shut, leaving these six:

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http://www.ukpia.com/industry_information/industry-data.aspx

 

Sales of petrol and diesel account for about a half of refinery output, so the banning of petrol and diesel cars will have a substantial impact on the industry.

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According to Michael Fallon, then Minister of State for Energy:

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The estimate of 26,000 jobs is only the tip of the iceberg. The UKPIA (UK Petroleum Industry Association) reckons that, taking into account downstream activities, the real figure is over 150,000.

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http://www.ukpia.com/industry_information/industry-data.aspx

 

Many of these jobs are highly skilled, as are those in related industries such as chemicals.

If UK oil refineries lose much of their sales of diesel and petrol, the problem does not stop there.

Oil refineries typically convert crude oil into a variety of end products, as this UKPIA diagram and note show:

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http://www.ukpia.com/industry_information/industry-data.aspx

 

Put simply, the crude oil is broken down into more useful components. Take away petrol and diesel, and the other products still produced (and still in demand) become hopelessly expensive to make, because the whole process is now so ridiculously inefficient.

Given that other countries are unlikely to hamstring their industries in this fashion, it is not difficult to see that the UK oil refinery industry will quickly shut up shop completely. Imports will quickly be sucked in to supply the aviation fuel, heating and marine fuels, diesel for HGVs, petrochemicals and other speciality products, which will all still be needed.

The UKPIA have produced this graphic, listing many of the things in our day to day lives which depend on crude oil:

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http://www.ukpia.com/industry_information/industry-data.aspx

 

There is also likely to be a knock on effect on the UK chemical industry. Some of the refineries are integrated with chemical plants, for instance Stanlow and Fawley.

It is difficult to see how these chemical plants could remain viable if the refineries were shut down.

 

 

The government likes to prattle on about the new green jobs it is hoping to create. Yet here we have an industry which makes an important financial contribution to the economy, supports thousands of jobs, many with highly specialist skills and technological expertise, and provides the building blocks of countless products which we rely on in our everyday lives.

At a stroke of Michael Gove’s pen, all of this could now be put at risk.

And we won’t have to wait until 2040 for it to happen. With demand shifting in the meantime, it is unlikely we will see much new investment in the industry in the foreseeable future. The inevitable result will be a slow and lingering death.

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19 Comments
  1. John permalink
    August 24, 2017 6:48 pm

    The UK OIl industry and much of our heavy industry must wonder what it has done wrong
    First there was the Climate Change act and its stupidity, now this
    Aluminium, chemicals, Steel and Ceramics, all decimated

    What is not said is that many of those jobs are well paid and pensioned.

    Also they allow our numerate young people to grow into a technical career.
    In its hey day it provided a workforce for much of the worlds growing oil and chemical industry

    easy to destroy, difficult to ever get back

    • David Richardson permalink
      August 24, 2017 7:41 pm

      “difficult to ever get back”

      Yes John – a bit like your own car industry?!

  2. August 24, 2017 7:04 pm

    UK oil industry workers may note that the government of the day knocked the UK coal industry on the head in the 1980s.

    • richard permalink
      August 24, 2017 8:01 pm

      It wasn’t making money.

      • A C Osborn permalink
        August 24, 2017 8:11 pm

        Was it making a bigger loss than paying all the unemployed Miners and Support industry workers their dole money for doing and getting nothing back?
        And still having to import millions of tons of coal.

  3. Dung permalink
    August 24, 2017 9:38 pm

    I see no future for the UK at all and the government does not give a shit about jobs or our economy in general. Civil unrest is what will happen on a massive scale and that will be even worse for the country. Our whole way of life is being systematically destroyed by our own government.

  4. Nordisch-geo-climber permalink
    August 24, 2017 9:55 pm

    Paul, succinct analysis as usual.
    Refining is a crucial, sustainable and environmentally sound way to future sources of power and transportation (I have just used the word misused most of all, but in the oil industry we should use it with pride!). [sustainable].
    Anyone who does not understand that is fooling themselves.

  5. Sam Villyard permalink
    August 24, 2017 11:05 pm

    Good work

    Sooner Sam

  6. August 25, 2017 5:47 am

    Yet again Paul, you have revealed the idiocy endemic in our political (and bureaucratic) system. It’s downhill all the way to becoming a third world country.

  7. Adam Gallon permalink
    August 25, 2017 7:50 am

    http://peterjnorth.blogspot.co.uk/2017/08/westminster-is-dying-and-we-should-let.html I reckon Pete North’s right.

  8. HotScot permalink
    August 25, 2017 8:42 am

    I’m sure everything will be OK. After all, 70 renewables employees produce as much energy as a single coal worker so employment won’t be a problem, and I’m sure all we taxpayers won’t mind paying for them all through subsidies.

    Ahem.

    • dave permalink
      August 25, 2017 9:42 am

      OTT

      Mr Hadow has stopped going North, and is now going West North-West!

      http://www.arcticmission.com/follow-arctic-mission/

      He must have met up with fragments of Mr Sea-Ice (a thousand miles short of the North Pole) and is now wandering along the edge.

      I imagine his Captains will stop him from entering before the imminent refreeze. And back to civilization pdq – well, to Alaska, anyway.

      • dave permalink
        August 25, 2017 10:09 am

        Also

        At last, a hurricane on US soil for the alarmists! Well, most snobs don’t count that bit of Texas but what are you gonna do? Unfortunately, it is only a Cat 2.
        Never mind. All together.

        THIS PROVES GLOBAL WARMING!!!!!!!!!!!!!!!!!

      • dave permalink
        August 25, 2017 11:06 am

        East North-East! Who spotted my deliberate mistake?

    • dave permalink
      August 26, 2017 8:41 am

      Maximum sustained wind was 115 mph for a few hours. That makes it (Harvey) Cat III, by 4 mph. Real problem is that is is stalled between two high pressure zones.
      Which, of course, puts the C into CAGW. Because it

      • dave permalink
        August 26, 2017 8:44 am

        Correction to typing.

        “…by 4 mph. Which,of course,puts the C into CAGW. Real problem is that it is stalled…”

  9. keith permalink
    August 25, 2017 10:52 am

    Yes, it is amazing the stupidity of our Governments, every single thing they get involved with turns into a total c*** up. I know not involved with this issue but the Australian Government warned by banning cigarette package branding is likely to lead to a big increase in fraudulent cigarette. So what happens, our Government doesn’t listen or learn from the experience of others and goes ahead and bans cigarette packet branding. So today I see a big bill board in the Council car park warning about fraudulent cigarettes. So by banning package branding they have created another crime avenue.
    If they don’t listen to others on this issue I doubt they will take any notice of the problems high use of renewable energy creates, e.g. South Australia.
    I regret we have absolutely no hope with our idiot MP’s and civil servants. They must have all taken stupid pills.

    • Gerry, England permalink
      August 25, 2017 11:23 am

      I believe Ireland had a similar growth in this as well as smuggling.

  10. Gerry, England permalink
    August 25, 2017 11:31 am

    Nice article once again, Paul.

    I think with current plans in place the rise in energy costs will kill off refining before the drop in fuel demand even arrives. Note during the Grangemouth dispute that energy cost was a factor in its viability.

    And the other problem area which so far shows little sign of being addressed is REACH. This is how our £20bn chemical export industry is able supply customers in the EU. Leaving the Single Market ends our membership of REACH so without any steps to address this exports cease. The moron Davis’s trade position paper does nothing to address this since its content is beyond stupid and has already been rejected by the EU as impossible.

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