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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 20 June 2025
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Displaying 1071 contributions

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Economy and Fair Work Committee

Petroineos Grangemouth

Meeting date: 13 December 2023

Neil Gray

There are a number of elements to that. We have been doing a lot of work through the Grangemouth future industry board to look at opportunities for the Grangemouth site to ensure that there is continued industrial activity. We recognise that one aspect—the refinery—is approaching 100 years old and is not competitive on the international stage with other refineries around the world, as was set out by your previous panel. We have been engaging with the board on that work.

We also know that those affected are highly skilled workers. We do not know the final quantum of potential job losses, because we are still working with assumptions around what may be lost and what may be retained through an import terminal. However, we know that they are highly skilled workers and that they will be much in demand across the energy sector. Through the just transition plan, I am keen to ensure that there is as much opportunity as possible to retain them in Scotland.

The other element that Mr Smyth spoke about is how the joint venture can retain those workers for as long as the refinery is operational. The First Minister and I both posed that question to Mr Hardie and his colleagues when we met a couple of weeks ago. I believe that significant investment is being made to retain staff, recognising that this is an uncertain time for them. We have impressed on the company the importance of ensuring that it looks after and retains the workforce. It is in its interests to do so, to ensure that it has a viable workforce to continue the processes that are in place at the refinery.

Economy and Fair Work Committee

Petroineos Grangemouth

Meeting date: 13 December 2023

Neil Gray

I did not hear that part of the discussion, but I am happy to take that away and speak to the joint venture about its assumptions then come back to the committee with more detail.

Economy and Fair Work Committee

Petroineos Grangemouth

Meeting date: 13 December 2023

Neil Gray

That is absolutely my understanding. That was one of the first questions that I had, because I wanted to be confident about that. As I understand it, even with an import terminal, hydrocarbons will continue to be produced and there will continue to be elements of flaring, whereby substantial carbon can be captured from the refinery or the move to an import terminal. The wider Grangemouth site has significant carbon emissions that can be captured. I know from discussions with the joint venture, but also from discussions that I had with the cluster a couple of weeks ago in Aberdeen that Grangemouth is absolutely central to their plans.

Economy and Fair Work Committee

Petroineos Grangemouth

Meeting date: 13 December 2023

Neil Gray

I would have to go back to look at minutes of previous discussions.

We have been aware for a long time that the future of the refinery was at risk—as I said, there have been previous interventions. That is why we have been engaging heavily with it to ensure that there is a just transition and investment in the import terminal that ensures energy security for Scotland and other parts of the UK. Again, the joint venture is making an important investment so that, when a decision is eventually taken on the refinery, we have continued industrial capacity and energy security at the Grangemouth site and for the fuels that are needed for Scotland’s transport sector.

Economy and Fair Work Committee

Petroineos Grangemouth

Meeting date: 13 December 2023

Neil Gray

My understanding is that that is because of the high sulphur content of North Sea oil.

I absolutely appreciate your point. I agree that the situation going forward, to a lesser or greater degree, involves us offshoring our carbon footprint rather than taking responsibility for it. However, that is the situation that we face right now, because only about 30 per cent of North Sea oil is refined at Grangemouth for the industrial reasons that have been well set out.

Economy and Fair Work Committee

Petroineos Grangemouth

Meeting date: 13 December 2023

Neil Gray

There are two elements to Murdo Fraser’s question. First, what he said about where customers will be able to source their fuel from is incorrect, because the transition to an import terminal means that they will still be able to source their fuel from Grangemouth.

Secondly, it is the UK Government that has responsibility for energy security. I believe that a UK minister will be before the committee in the new year to answer such questions. However, I have received assurances from the joint venture and from UK ministers that contingency plans are in place for Grangemouth in relation to the situation now and in the future, and that the transitional arrangements that have been announced for the import terminal are all about ensuring energy security.

Economy and Fair Work Committee

Petroineos Grangemouth

Meeting date: 13 December 2023

Neil Gray

No. I do not believe that that will be the case, because our transition to green energy sources and the continued operations at Grangemouth mean that there will be job opportunities in the energy sector for people in Scotland in the future. There will be a need to utilise our highly skilled people and technical expertise—particularly in the subsea elements, but also in the refinery elements—to ensure that our green industrial revolution can continue. Therefore, with respect, I do not accept the premise of Mr Fraser’s question. There will still be huge opportunities for people in Scotland to work in the energy sector for many decades to come, whether that is in the oil and gas sector or the green energy sector.

Economy and Fair Work Committee

Petroineos Grangemouth

Meeting date: 13 December 2023

Neil Gray

I would point to the work that has been done on the just transition plan and on the green industrial strategy, which will be published early in the new year. That should give certainty to people who currently work in traditional energy sectors, such as the oil and gas sector, that there will be job opportunities as a result of the many diverse projects that we hope to secure in order to have a strong manufacturing industrial supply chain that feeds green energy opportunities. Those might be in pumped hydro storage, in floating offshore or onshore wind, in the marine energy sector or in hydrogen production and utilisation.

There will be many opportunities for people with high skill levels, such as those who work at Grangemouth, to transition and take up other jobs, so that we retain them in Scotland. That is a critical factor in the work that we are doing, and it is our ambition to retain as many of those workers as possible in Scotland.

Economy and Fair Work Committee

Petroineos Grangemouth

Meeting date: 13 December 2023

Neil Gray

We are already seeing some of that transition in action. I was in Aberdeen a couple of weeks ago when I opened the new Scottish and Southern Electricity Networks offices, and I believe that a third of the SSEN workforce has already transitioned from the oil and gas sector. For the benefit of Mr Fraser’s confidence, I note that that transition is already happening.

Economy and Fair Work Committee

Petroineos Grangemouth

Meeting date: 13 December 2023

Neil Gray

Again, the regulation of the transportation of hydrogen thereafter is still to be confirmed by the UK Government. The joint venture and Ineos will need to explain this in more detail, but my understanding is that the offtake is there, and that is making the commercial decision for the decarbonisation of the production that Grangemouth is utilising.

Mr Whittle’s previous question was about jobs and retaining as many people in the oil and gas sector as possible. I also share the ambition to retain as many people in the energy sector in particular but in other opportunities in Scotland. We want to see a just transition for that highly skilled and valued workforce. I do not deny that there are competing opportunities around the world. I want to ensure that, through our work, particularly in relation to the supply chain for the offshore wind sector and the green industrial strategy that we are developing, we can show a line of sight for people to have a strong energy-related career in the green industries here in Scotland.

Susie, did you want to come in on that point?