Trade Union Seeks Probe of Ineos-BP Pipeline Deal

05.04.2017 -

The British trade union Unite has called on both the British and Scottish governments to conduct inquiries into BP’s sale of the North Sea Forties pipeline system (FPS) to Ineos, saying the $250 million deal is bad for Scotland and the UK.  While Unite’s Scottish secretary, Pat Rafferty, said the union believes Ineos’ taking possession of the pipeline would not be in Scotland’s national interest, John McNally, CEO of Ineos Olefins & Polyolefins UK, said it was in fact “good for Scotland.”

Ineos, McNally said, has invested £450 million in its Grangemouth production complex, “secured long-term jobs and the assets for the indeterminate future.”  He added that there are no plans for layoffs with the acquisition of the BP pipeline. Without giving details, he added that the chemical producer plans to invest in FPS to “maximize the economic return for oil and gas in the North Sea.”

A protracted dispute between the union and the olefins and polyolefins giant in 2013 – initially over union organizing on site – that led to threats by Ineos’ management to close the Grangemouth down has left the two sides bitter enemies. The showdown not quite four years ago ended with both the UK and Scottish government providing loans or grants to the Swiss-based group to finance projects Ineos said would secure the site’s future.

Meanwhile, Ineos has been at the center of new and continuing disputes over its plans to embrace fracking in both Scotland and England. Documents released to environmental advocacy group Friends of the Earth under freedom of information rules sees the chemical group as leading lobbying efforts to seek further exemptions from financial contributions to climate policy efforts.

British news media said the information stems from progress updates, letters and meeting notes from the Chemistry Growth Partnership, a government-industry initiative, of which Ineos is a member and its director, Tom Crotty, chair of the initiative’s energy committee.  The documents allegedly show the initiative wants the government to support shale gas exploitation. To this end, the lobby group is said to have called for a “level playing field on energy and climate-related policy costs.” 

The UK government has now granted a £100m-per-year exemption from the carbon trading scheme for such companies.  According to the Department for Business Energy and Industrial Strategy, 130 of the country’s most energy-intensive companies, collectively worth £52 billion to the economy, would benefit from the exemption. Environmentalists said the financial relief comes on top of exemptions worth £250m already awarded to energy-intensive industries.

In a consultation response, the government said the national climate change levy and the carbon trading scheme increase companies’ electricity costs, putting them “at a competitive disadvantage with their international competitors and increasing the risk that companies may choose to move their production abroad.”