Ministers'  hopes of Scotland becoming 'world leaders' in sustainable fuel production through the closure of Grangemouth's historic refinery have been described as "greenwashing" after executives raised doubts about its future.

Economy secretary Mairi McAllan offered support for a transition to new and emerging technologies two weeks ago while offering no hope of saving the Grangemouth refinery.

But Grangemouth bosses have raised serious doubt over a transition to a green fuel biorefinery saying the current position is "commercially suboptimal".

The Herald revealed in November that bosses at the Petroineos plant in Grangemouth established almost a century ago, told staff that Scotland "simply won't be big enough to support a fuels refinery" due to falling demand sparking fears for thousands of jobs within the plant as well as outside contractors.

READ MORE: 'Grangemouth fraud': Ministers hopes of being 'world leaders' in green fuel in doubt.

 

Why is the Grangemouth refinery important?

It is home to Scotland’s only crude oil refinery through a joint venture between Sir Jim Ratcliffe's Ineos Group and China’s state-backed PetroChina.

It is symbolic of Scotland's 'black gold' which would be used by the Scottish National Party during the 1970s in making their economic case for independence from the rest of the UK. It was argued that North Sea oil would not benefit the nation to any significant degree while the nation remained part of the United Kingdom.

The first oil in the North Sea was said to have been discovered in September 1969 by the Sea Quest drilling barge in what was then known as the Montrose field. And on October 20, 1970, it was reported that, thanks again to Sea Quest, BP had struck oil, 110 miles east-north-east of Aberdeen, in what was believed to be its biggest discovery so far.

When the first oil was piped ashore from the North Sea to what was then BP's refinery in Grangemouth 49 years ago, it was, said the Queen, "a day of outstanding significance in the history of the United Kingdom".

Watched by eminent figures including Labour’s Prime Minister Harold Wilson, and company executives who had played key roles in Britain's new role as an oil-producing power, the monarch presided over the the historic switch on.

The ceremony took place on Monday, November 3, 1975, in a vast, specially-designed marquee at Dyce, near Aberdeen, the control centre of the pipeline between BP's Forties Field and the refinery, 237 miles away.

The Herald: Hundreds of jobs are at risk as plans are made to shut down Scotland's only oil refinery,The Queen, flanked by B.P. chairman Sir Eric Drake and Mr Colin Smith, presses a button in the control room at Dyce, near Aberdeen, to launch the flow of oil from the Forties Field in the North Sea to BP's Grangemouth refinery 237 miles away

'Britain back in the black', read the main headline in what was then the Glasgow Herald the following day and the article read: “The black that is expected to take Britain out of the red is in Scotland. Just after noon yesterday the first oil to be piped ashore from the North Sea entered the Grangemouth refinery of British Petroleum."

Away from its symbolic significance, it is said to have the capacity to produce around 7 million tonnes of fuels and 1.4 million tonnes of petrochemicals every year.

It produces a range of fuels including petrol, diesel, kerosene, LPG and jet fuel and currently employs around 500.

It is the primary supplier of aviation fuel for Scotland’s main airports, and a major supplier of petrol and diesel ground fuels across the central belt.

It remains connected to the Forties Pipeline System (FPS) for crude oil intake from the North Sea and connected to Finnart Ocean Terminal for crude oil import and finished products export.

 

How did it all start?

The history of Grangemouth dates back to long before oil was discovered in the North Sea in the mid-20th century when industrial pioneers led by a Glasgow-born chemist named James Young worked out how to extract mineral oil from the rich coal and shale deposits in Scotland.

The first oil works in the world were opened in Bathgate in 1851 producing oil from shale or coal.

The network of small refineries that sprang up in the area shipped some of their output from the docks at Grangemouth.

In 1919, BP, then known as Anglo-Persian Oil, acquired Scottish Oils, a group that included Young’s Paraffin Light and Mineral Oil, and drew on its skills to help build its refinery at Grangemouth in the early 1920s.

The Herald: Gordon Wilson with a 'Scotland's oil' poster, part of a new SNP campaign launched in September 1980

BP was persuaded to locate at Grangemouth rather than in north-east England due to its flat ground to the east, its transport links and most importantly, the rich vein of labour skilled in shale oil refining.

By 1924 the refinery was in operation. It maintained a throughput of 360,000 tons per year until the outbreak of war in 1939 when imports of oil dwindled and forced it to close.

It reopened in 1946 to a world even more hungry for refined oil products. This demand made it essential for economic reasons that the crude oil was utilised completely, and this led to the growth of the petrochemical industry.

 

What has happened since?

The following decades saw BP build and expand the adjacent petrochemical plant, which benefited from the development of North Sea oil in the 1970s.

Oil and gas from dozens of North Sea fields comes ashore next door through the Forties pipeline, which is still operated by BP.

The plant converts byproducts from oil and gas into industrially valuable chemicals like ethylene and propylene, as well as polyethylene for plastic bottles and food wrap and polypropylene for pipes and carpeting.

During BP’s reign in Grangemouth was a classic company town. To house employees at subsidized rents, it built rows of semi-attached gray stucco houses that are placed right up to the edges of the plant.

In 2017, Sir Jim Ratcliffe's Ineos announced the acquisition of the Forties Pipeline System from BP. That acquisition reunited North Sea and Grangemouth assets under Ineos ownership.

It is reputedly the UK's second-oldest, supplying refined products to customers in Scotland, northern England and Northern Ireland.

 

Why is it under threat?

Staff were told in November by executives at the Petroineos plant in Grangemouth that Scotland "simply won't be big enough to support a fuels refinery" due to falling demand.

It led to concerns that hundreds of jobs are at risk.

Staff were told that a start has already been made on projects that will see the Petroineos plant transition from a refinery to potentially an imported fuels depot.

Petroineos told the Herald it will remain a refinery until spring 2025 although managers have indicated to staff the transition would take place over the next five years. They say the move will provide "greater operational flexibility and safeguard the site as a national fuel hub for decades to come".