BY NEIL EISBERG | 21 DECEMBER 2023
The UK’s lack of a coherent energy policy and disincentives to investment by the Government ‘are leading to totally uncompetitive energy prices and a growing reliance on imported gas, according to Ineos Director Tom Crotty, President of the UK Chemical Industries Association (CIA).
Speaking at the CIA Annual Dinner, Crotty asked: ‘Why are we in the UK stuck with a complete lack of energy policy? How irresponsible is that? The rest of the world is encouraging local oil and gas production. While we destroy ours through high North Sea taxes and disincentives, making us totally reliant on overseas supplies and losing billions in potential revenue.’
Ineos operates the Forties Pipeline system in the North Sea, and Crotty cited the system as an example of this decline. ‘ The Forties Pipeline system moves 40% of the UK’s oil from the North Sea through Grangemouth where it is processed for distribution throughout the UK, he highlighted. ‘Oil flows through the system have declined by a dramatic 40%, meaning that the country is becoming ever more reliant on imported oil and gas.
‘It puts UK consumers at the mercy of foreign producers and causes massive volatility in prices, pushing yet more people into fuel poverty.
‘To give you a feel for the impact of this, if you look at yesterday’s (15 November 2023) energy prices, UK gas was priced at $14.6/mmBtu, while the US was at $3.1/mmBtu – that’s a five times multiple. Electricity was $111/MWh in the UK but only $20 in the US, that’s a 5.5 times multiple. On top of that, we have a carbon price at $79/t,’ Crotty emphasised.
Shortly after this event, Petroineos, jointly owned by Ineos and China’s state-owned PetroChina, announced the closure, possibly by Spring 2025, of its Grangemouth oil refinery – one of only six refineries in the UK and the only one in Scotland, supplying two-thirds of the petrol and diesel. The plan is to convert it into a fuel import terminal.
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