Scotland's Salmond warns future of shuttered refinery in jeopardy

Oct. 21, 2013 at 12:05 AM
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GRANGEMOUTH, Scotland, Oct. 21 (UPI) -- With talks over reopening a key Scottish oil refinery stalled, First Minister Alex Salmond says the ongoing labor dispute is endangering its long-term future.

Speaking to BBC Scotland Friday, Salmond said the longer the Ineos Group's Grangemouth refinery remains "idle and cold," the more likely it is the financially troubled plant -- which supplies 70 percent of Scotland's filling stations with fuel -- will be shuttered permanently.

Salmond had been seeking a temporary truce between Ineos and the Unite union representing its 1,400 workers allowing it to reopen while increasingly acrimonious negotiations over pay and benefits could be started anew.

Ineos shut down the Grangemouth refinery Wednesday and the Scottish leader conducted emergency negotiations the next day. But after obtaining what he thought was a deal to reopen the plant, talks moderated by Britain's Advisory, Conciliation and Arbitration Service quickly broke down again Friday, with no new negotiations scheduled for the weekend.

Salmond told the BBC firing up the refinery is necessary for the talks to proceed in a "better atmosphere" in hopes of reaching a final labor deal, but he also warned a permanent closure of Grangemouth is also a distinct possibility.

"If the plant stays down and we stay in the war of words, the exchange of press releases, interviews and tweets, then there is a risk that things will deteriorate further," he said. "And the fundamental risk is the future of the Grangemouth plant. The longer the Grangemouth plant lies idle and cold, then the more dangerous things become."

Ineos, headed by British tycoon Jim Ratcliffe, has issued a "survival plan" for the facility in which workers are being asked to accept an end to their salary pension plan and a freeze on pay and bonuses in return for the plant staying open, The Daily Telegraph reported.

The company planned to bypass the union and ask workers directly Monday whether they accepted the survival plan, with the results to be taken to shareholders Tuesday -- a move denounced by Unite as an illegal "sign-or-be-sacked" ultimatum.

Unite Scottish Secretary Pat Rafferty said the refinery's employees "want to be working to make sure that Grangemouth has a successful future. Instead their livelihoods are being thrown into turmoil because of Ineos' irresponsibility which risks the future of the site.

"Anger is growing among workers and the company now risks destroying good Scottish jobs and a powerhouse of the Scottish economy."

The union, he said, "will not give in to the threats and menaces of Ineos" and called on the company "to drop the cynical blackmail, start the plant up and talk seriously about securing a future for Grangemouth."

The Grangemouth facility, in addition to providing most of the gasoline sold in Scotland, also supplies steam power for the system that brings North Sea oil and gas ashore and is a key element in Salmond's plans for an energy-independent Scotland should voters decide to break up with the United Kingdom.

But Ratcliffe has said cost structures at the plant make it uncompetitive in a changing global energy marketplace. It is suffering from low levels of natural gas content in oil coming into it from the North Sea, and so is seeking government help in performing a $485 million retrofit to accept low-cost imported gas, the BBC reported.

Should the Grangemouth refinery remain closed, it won't cause supply problems for motorists, gasoline retailers told the broadcaster, saying if they run out of fuel more can be brought into Scotland by tankers from other refineries.

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