Monday, 21 April 2008

Oil and refineries

In case you missed it in the news, Grangemouth refinery in Scotland is in the process of shutting down in preparation for a 2-day strike by its workers over pensions. They have to shut the whole plant down because it would be unsafe to leave it running with no operators, and it takes a week to close. I guess it will probably take a week or more to restart as well.

The workers seem to have a legitimate case, and the company, Ineos, is making a big fuss, warning about how fuel supplies will run out in Scotland and Northern England. They are being accused of scaremongering.

Of course this is one of those self-fulfilling prophecies, as as soon as shortages are seen to be a risk, anyone with any sense will realise that although there wouldn't be a problem if nobody panicked, the fact is that some people will, therefore it is in your own best interests to stock up with fuel. I know I would (well, in fact I already have, though hopefully the shortages won't make it as far as Rye...).

It'll be interesting to see how it all turns out, I can imagine some frenetic activity between the company, the union and the government in the next few days!

The main thing I hope for is that it will continue to draw attention to the problem of Peak Oil, especially if we get some real shortages. The fact that the refinery normally processes 200,000 barrels of crude oil a day from the North Sea is already having an impact on oil prices, which hit a new record this morning of $117.40. Many people reckon it will hit $120 within a week or two. Expect some higher petrol and diesel prices on the way....

Here's some links:
The news on the refinery
The topic being discussed on The Oil Drum


No comments: