You have probably heard of the Nationwide Grid, the community of pylons and electrical energy infrastructure making certain the nation is provided with energy. You are in all probability conscious that there’s a comparable nationwide community of fuel pipelines sending methane into thousands and thousands of our boilers.
However far fewer individuals, even among the many infrastructure cognoscenti, are even faintly accustomed to the UK Ethylene Pipeline System. But this pipeline community, obscure because it is perhaps, is without doubt one of the crucial elements of Britain’s industrial infrastructure. And it is also a helpful clue to assist clarify why the federal government has simply introduced it is spending greater than £120m to bail out the chemical plant at Grangemouth in Scotland.
Ethylene is a kind of precursor chemical substances important for the manufacture of all types of on a regular basis merchandise. React it with terephthalic acid and you find yourself with polyester. Mix it with chlorine and you find yourself with PVC. And once you polymerise ethylene itself you find yourself with polyethylene – an important plastic on the earth.
Why Grangemouth issues
Ethylene is, in brief, a really large deal. Therefore, why, a few years in the past, a pipeline was constructed to make sure Britain’s numerous chemical crops would have a dependable provide of the stuff. The pipes linked the important thing nodes in Britain’s chemical substances infrastructure: the crops within the north of Cheshire, which derived chemical substances from salt, the huge Wilton petrochemical plant in Teesside and, up in Scotland, an important level within the community – Grangemouth.
The refinery would suck in oil and fuel from the North Sea and switch it into ethane, which it might then “crack”, an energy-hungry course of that entails heating it as much as phenomenally excessive temperatures. A few of that ethylene can be used on web site, however giant volumes would even be despatched down the pipeline. It could be pumped all the way down to Runcorn, the place the previous ICI chlor-alkali plant, now owned by INEOS, would use it to make PVC. It could be despatched to Wilton, the place it might be became polyethylene and polyester.
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That is the primary necessary factor to understand about this community – it’s important for the operation of an entire collection of crops, a lot of them run by totally totally different corporations.
The second key factor to notice is that, after the closure of the cracker at Wilton (now owned by Saudi firm Sabic) and the ExxonMobil plant at Mossmorran in Fife, Grangemouth is the final plant standing. Whereas the refinery not makes use of North Sea oil and fuel, as an alternative delivery in ethane from the US, it nonetheless makes its personal ethylene.
So when INEOS started consulting on plans to shut that ethylene cracker, officers down south in Westminster started to panic. The issue wasn’t simply the five hundred or so jobs which may have been misplaced in Grangemouth. It was the domino impact that will feed all through the sector. Impulsively, all these crops on the different ends of the pipeline can be affected too. In follow, the closure may need eventuated in additional than a thousand job losses – perhaps extra.
What’s occurring now?
All of which helps clarify the information in the present day – that the Division for Enterprise and Commerce is placing greater than £120m of taxpayer cash into the location. The bailout (it is exhausting to see it as something however) will not be the primary. The federal government has additionally put a whole bunch of thousands and thousands of kilos of taxpayer cash into British Metal, which it quasi-nationalised earlier this 12 months, to not point out additional money into Tata Metal at Port Talbot and mortgage ensures to assist Jaguar Land Rover after it confronted an unprecedented cyber assault.
Work floor to a halt at JLR’s Wolverhampton manufacturing unit after a cyber assault. Pic: PA
However whereas this package deal will undoubtedly present Christmas cheer right here in Grangemouth in the present day, the federal government is left going through two distinct issues.
Reactive somewhat than strategic
The primary is that for all that the chancellor and enterprise secretary (who’re themselves planning to go to Grangemouth in the present day) are eager to pitch this newest transfer as a coherent a part of their industrial technique, it is exhausting to not see it as one thing else. Removed from showing strategic, as an alternative they appear reactive. To the extent that they’ve a coherent industrial technique, it principally appears to contain forking out public cash when a given plant is near closure. In the event that they weren’t already, Britain’s industrialists will in the present day be questioning to themselves: what wouldn’t it take to get ourselves a few of this cash in future?
The disaster continues
The second concern is that the Grangemouth bailout may be very unlikely to finish the disaster spreading throughout Britain’s chemical substances sector. A collection of crops – some outstanding, others much less so – have closed up to now few years. The chemical substances sector – as soon as some of the necessary within the financial system – has seen its financial output drop by greater than 20% up to now three years alone.
This isn’t only a UK-specific story. One thing comparable is going on throughout a lot of Europe. However for a lot of chemical substances corporations, it merely would not add as much as make investments and construct within the UK any extra – a product in a part of laws and in a part of excessive power prices. Briefly, this story is not over but. There will probably be extra twists and turns to return.
