The UK and Scottish governments should heed the latest industry warnings and “fight tooth and nail” for the future of the North Sea, AGCC has warned.
Speaking to The Times, energy titan Sir Jim Ratcliffe suggested that one million direct jobs are at risk across Europe over the next decade from the likely collapse of its chemicals industry.
Describing the situation as “grim”, Ratcliffe also warns of the loss of a multiplier effect in terms of impact on indirect employment – with energy costs and high taxes putting ten million jobs in jeopardy and wiping out three quarters of a trillion euros in economic value to Europe’s economies.
Singling out the key Scottish chemical sites at Grangemouth and Mossmoran, Ratcliffe said: “Mossmorran is, I’m sure, going to close in the next couple of years, which just leaves Grangemouth. If you close Grangemouth, you close down 60 per cent of the North Sea.”
Grangemouth Refinery, which was operated jointly by Ratcliffe’s firm Ineos, closed earlier this year with the loss of 400 direct jobs. Grangemouth remains home to Scotland’s main petrochemicals plant – intrinsically linked to the Forties North Sea pipeline system and a key carbon emitter to feed the government-backed Acorn carbon capture project.
Sir Jim noted that the sector’s future is threatened by a lethal combination of high energy costs, high taxes, US tariffs and cheap competition from China.
Commenting, Aberdeen & Grampian Chamber of Commerce chief executive Russell Borthwick said: “Governments across the UK must deepen their understanding of the interconnected nature of our energy sector from start to finish – and fight tooth and nail for its future.
“A future pipeline of oil and gas coming ashore can only be achieved through a combination of competitive taxes and a pragmatic approach to new licensing. In the UK, we currently have neither.
“If we want a future for our chemicals industry we need to compete globally – or else the dominoes will start to topple and we put our industrial base in real jeopardy.
“Lower costs are achieved by producing more of our own and achieving energy independence as much as possible, not driving up imports from abroad.
“An oil and gas industry taxed at an eye-watering 78% simply cannot compete on a global scale or continue to produce long into the future.
“If we cut off our feedstock from the North Sea, then how can we possibly give ourselves the best chance to protect key chemicals infrastructure and jobs?
“And if poor government decision-making allows our chemicals industry to go to the wall, what future for major carbon capture projects – such as Acorn – which are backed with hundreds of millions in public money?
“These latest warnings from industry should be a real wake-up call and jolt government into swift action to ensure Britain remains competitive and investible.”