G8 Report : SCOTLAND PLC: The Oil and Energy Industry in Scotland 1

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Oil from the North Sea came on-line in 1976, and since then Scotland has become a major centre for the oil and gas industry, with Aberdeen known as the 'energy capital of Europe'. The oil and gas industry in Scotland includes 2,000 companies employing around 100,000 people (6% of the Scottish workforce).2

While in theory this should provide a boost for the Scottish economy, most of the major companies extracting oil and gas in the North Sea are in fact based in London, the USA and Canada, and the Scottish Executive does not directly receive North Sea oil revenue, a major source of contention for Scottish Nationalists. In any event, the UK has one of the most favourable oil industry tax regimes in the world, taking around 40% of the profits from oil companies compared to 66% in the USA and 88% in Norway. In the late 1990s, DfID gave £600,000 to economists from Aberdeen University to advise Russia on the reform of its oil tax regime. These were the same economists who played a key role in lobbying for lower oil taxes in the UK. With DfID funding, they advised Russia to adopt a level of tax almost as low as Britain's.3

Not only are the oil companies failing to provide full benefit to the people of Scotland, smaller Scottish-based oil exploration companies are involved in problematic projects in the developing world, particularly Africa (see above), exacerbating poverty and environmental destruction, the very problems the G8 is supposedly attempting to address.

The North Sea oil fields

The North Sea oil fields around Scotland sit in the area politically known as 'the UK Continental Shelf'. They include the Central fields (oil and gas) which stretch from Edinburgh to Stornoway, the Northern fields, to the east and north east of Shetland, and the Atlantic Frontier, to the west and north of Shetland.

Shell, BP, Total and ExxonMobil own 50% of North Sea oil reserves, although with production in the North Sea having peaked in 1999, they are giving mixed messages as to the future viability of the area. BP sold off the Forties oil field in 2003 to Apache, a medium-sized independent US oil company, and has also announced selling off the Grangemouth refinery – the major oil refinery in Scotland. Shell, however, has just opened a new gas field, Goldeneye, and will continue to drill the high-risk, high-reward waters of the Atlantic Frontier, although it admits that future reserves would come in smaller packages and that recovery would present technical problems. As the oil majors sell off the older, more mature fields, smaller oil companies such as Talisman Energy and Paladin Resources will continue to acquire production blocks.

The UK imports around 50% of its oil, with the main ports for crude tankers being Sullom Voe in Shetlands and Grangemouth on the Firth of Forth near Falkirk.

Oil and gas pipelines

Oil and gas run from the oil fields along pipelines to terminals such as the BP oil terminal in Sullom Voe in Shetland or the Flotta terminal in Orkney. The Forties pipeline system (FPS) is owned by BP and commences at the Forties Charlie platform with landfall at Cruden Bay, near Aberdeen. The pipeline then continues to the processing terminal at Kinneil, adjacent to BP’s Grangemouth complex in central Scotland. Once stabilised, the crude oil, known as Forties blend, is pumped to a storage facility at the village of Dalmeny prior to export via the Hound Point terminal. A proportion of the crude goes to the refinery at Grangemouth for the manufacture of fuels.

The gas terminal at St Fergus near Aberdeen is the largest in the UK, with Shell, ExxonMobil, Total and British Gas all operating from there.

The North Sea has been devastated by almost 45 years of oil exploitation with damage caused not only by disasters (such as the Braer grounding in 1993 – luckily rough weather dispersed much of the oil spill) and oil slicks (which often go unreported) but also by the impact of everyday operations. This includes seismic ships setting off underwater explosions, drill cuttings being dumped on the sea bed, rigs and pipelines being coated in toxic chemicals, and the noise and light pollution of gas flaring. In recent years, Shell and BP have also moved into the pristine deep water of the Atlantic Frontier, host to enormous biodiversity including whales, dolphins and porpoises. The effects of exploration on these poorly understood ecologies could be devastating.

Aberdeen – 'The Granite City'

Aberdeen (pop. 210,000) is home to many oil exploration and production companies as well as to contractors to the oil industry - from geological and oilfield process consultancies through drilling contractors, pipeline laying, support ships, and on to catering and the construction and manufacture of equipment.

Aberdeen has one of the strongest local economies in the UK, mainly due to oil money and very low unemployment levels. However, because of its reliance on the oil industry it would be very vulnerable to a price slump, or to oil companies moving out to more competitive locations. Many of the oil exploration companies based there not only have operations in the North Sea but are active in the emerging markets of West Africa and the Caspian.

Oil companies are generally based around the edge of the city and helicopters regularly ferry oil workers over to the oil rigs from Aberdeen airport, the busiest heliport in the world. R&D companies are also based at the Aberdeen Offshore Technology Park (AOTP).

The UK Offshore Operators Association (UKOOA) is the representative organisation for the UK offshore oil and gas industry. Its members are companies licensed by the Government to explore for and produce oil and gas in UK waters. UKOOA has offices in Aberdeen and London.

Oil companies with offices in Aberdeen include:

  • Total Exploration UK Plc
  • Talisman Energy
  • Abbot Group
  • Amerada Hess
  • AMEC
  • BP Exploration Operating Company Ltd.
  • BP Japan Oil development company
  • Britoil Ltd (BP Subsidiary)
  • ConocoPhilips Petroleum Company Ltd.
  • Kvaerner Oilfield products Ltd.
  • Dana Petroleum Plc
  • Apache North Sea
  • Caledonia Oil and Gas Ltd
  • Shell Expro
  • Venture Production

Those based in Edinburgh include:

  • Paladin Resources
  • Premier Oil (which pulled out of Burma in 2003 for 'financial reasons')
  • BowLeven Plc
  • Cairn Energy Plc
  • Melrose Resources Plc
  • Edinburgh oil and gas Plc

Other oil exploration companies operate in the North Sea, but have offices elsewhere in the UK

Scottish-based oil exploration companies

While the big oil corporations (the 'Western oil majors') have come under a great deal of scrutiny from campaigners, and rightly so because they set the agenda in a competitive environment, many of the smaller oil exploration companies have escaped censure. Many of these smaller companies are based in Scotland or have offices there. Many of these companies also operate in Africa (see section on Oil Exploration in Africa for more details on countries mentioned).

BowLeven Plc (Edinburgh)

BowLeven is an African specialist independent oil and gas company set up by Canadian and Scots oil men and floated on the AIM exchange in December 2004. Brian Souter and Ann Gloag, the brother and sister founders of transport multinational Stagecoach, are the major investors.5 BowLeven has valuable concessions for exploration in Cameroon. Bowleven also has plans to jointly run a gas-fired power plant with the Cameroonian government 'that would replace existing oil-based power stations, and could reduce the cost of electricity to local consumers by as much as three quarters.'

Dana Petroleum Plc (Aberdeen)

A small Aberdeen-based oil and gas exploration company operating in the North Sea, Ghana and Mauritania.

Cairn Energy Plc (Edinburgh)

The most significant player in the Scottish oil industry. It is a fast growing oil and gas exploration company based in Edinburgh and operating in the North Sea and in India, Nepal and Bangladesh. Cairn Energy became the darling of the City in 2004, when it struck oil big time in the Rajastan desert, India and entered the FT100.

The company's Chief Executive, Bill Gammell, was not only a school friend and debating partner of Tony Blair, but also was a childhood friend of George W. Bush. His father, also in the oil business, was a friend of George Bush Sr., and as the founder of Ivory Sime, the Scottish fund managers, backed Bush Snr.'s early oil adventures in the 1950s. When Bush visited Britain in November 2003, Gammell was invited to the reception in Buckingham Palace – so one can make a fairly educated guess that Gammell will be on the guest list for Gleneagles.6

Cairn Energy in South Asia

In India, Cairn Energy has permission to explore and develop the Rajastani desert for oil production until 2020, although now Cairn is disputing whether it has to pay a tax on the production of crude oil to the Indian government. There are some concerns in Rajastan that water, precious to desert communities, may be exploited by Cairn Energy to inject into their wells to boost production of recoverable oil. Cairn, however, says it has also found an underground salt water source and may build a desalination plant to provide fresh water for the locals.

In August 2004, Cairn announced that it would be exploring in the border region between India and Nepal. The World Wildlife Fund (WWF) was concerned that Cairn would be moving into various ecologically sensitive national parks. While Cairn announced that it was relinquishing its rights to explore in designated national parks and wildlife areas, WWF still believes the prospecting could affect jungle corridors of the India-Nepal Tarai Arc Project set aside for migrating wildlife. The foothills of Nepal are also politically unstable.

In early 2004, the Bangladeshi government permitted Cairn Energy and Shell to begin seismic and aerial surveys for oil and gas reserves in the Bangladeshi Sundarbans, one of the world's largest mangrove forests and home to a large percentage of the world's tiger population. The Sundarbans protect the coast from cyclones and tidal surges, and are vital to the food security of thousands. While both companies claim that their activities will not threaten wildlife, such exploration could clearly have a significant impact on this ecologically sensitive and important area.7

See section on 'Its the Oil, Stupid' for more information about multinational oil companies with bases in Scotland and their operations in Africa.

Oil service companies

The oil service industry provides specialist services to the big oil companies from drilling contractors to pipeline construction and facilities management. Most of the actual day to day work in oil extraction and production is outsourced to these oil service companies.

The Abbott Group Plc

The Abbot Group is the UK's largest oilfield service contractor. Its activities are centred around its operating subsidiaries, KCA DEUTAG and Bentec. KCA DEUTAG is an international drilling, well engineering and facilities engineering contractor. In addition to its substantial North Sea platform drilling operations, KCA DEUTAG operates in Nigeria, Angola, Libya, the Caspian, the Middle East and Sakhalin Island (Russian Pacific). Its customers include Total, Chevron, ExxonMobil, BP and Shell.8 Abbot Group is listed on the UK stock exchange and based in Aberdeen.

Aker Kvaerner ASA

Norwegian corporation, Aker Kvaerner ASA provides services related to design, construction, maintenance, modification and operation of large and small industrial facilities. This includes oilfield services. Its involvement in building projects range from the Three Gorges Dam in China to the Birmingham Northern Relief Road.


AMEC is a giant UK-based international project management and services company. As well as providing oilfield services in the North Sea, AMEC, in partnership with US Fluor corporation, has won significant contracts in post-war Iraq for the reconstruction of water, electricity and public works.9 AMEC will be well-known to campaigners for its part in constructing the notorious Baku-Ceyhan pipeline, and also as road builders, dam builders (such as the Yusefeli dam in Turkey through its subsidiary Spie Batignolle), and as major beneficiaries of Private Finance Initiative projects.

AMEC's clients include Shell, BP , Union Carbide, De Beers, DuPont, Novartis, GlaxoSmithKline, AstraZeneca, ExxonMobil, BASF, the US Airforce, UK Ministry of Defence (MoD), Hewlett Packard, Eli Lilley, Aventis, BAA, General Electric, General Mills, the BBC, BT, and various governmental bodies, both in the UK and abroad. See Corporate Watch profile of AMEC for more information.

AMEC Offshore has offices in Aberdeen and AMEC Construction (Scotland) has offices in Edinburgh.

Halliburton Inc. and KBR

Halliburton is the biggest oil services company in the US. It has close links with Vice-President Dick Cheney and has been the target of numerous allegations of corruption. Halliburton has numerous locations in Scotland, including Aberdeen, through Halliburton Energy Services and two subsidiaries, KBR (also called Kellogg Brown Root), an engineering and construction company and Subsea 7, underwater engineering contractors. Aberdeen (Dyce) is KBR's worldwide headquarters. See Corporate Watch profile of Halliburton and 'Arms Industry' section for more information.

Staff at KBR in Scotland are also concerned over attempts to push through draconian alterations to their contracts.10 American union leaders have called KBR '...one of the most anti-union, anti-worker corporations in the world.'11

Halliburton's operations overseas mark it out as a particularly ruthless and amoral company, building pipelines across Burma and Azerbaijan and having just won (December 2004) the contract to build the BP Tangguh pipeline in the politically unstable region of Papua, Indonesia.12

The John Wood Group

The John Wood Group is a major international energy services company, employing more than 13,000 people and operating in 34 countries. Chief Executive for many years was one of Scotland's richest men and Vice Chancellor of Robert Gordon University, Sir Ian Wood. He is now executive chairman. His family still owns 45% of the company's holdings, one of the largest in Scotland. The company's contracts include working off-shore for Chervron in Angola, being contracted by AMEC to provide commissioning services for Shell's platforms in offshore Nigeria, working for Marathon in Equatorial Guinea and providing engineering services for BP on the Tangguh pipeline in Indonesia.13 JW. Holdings is also a major player in the fishing industry.

The Craig Group

The Craig Group is another major international energy services company based in Scotland and developed out of the family fishing fleet. Craig Energy Services operate in South and West Africa and the Caspian region. Craig Group Catering Services is one of the major providers of catering and janitorial services to the Scottish oil industry offshore and onshore.

The Weir Group Plc

According to a report by the Royal Bank of Scotland, Weir is Scotland's 20th largest company14. Weir describes itself as 'operating as a global family...We work together to create engineering solutions, which help our customers deliver processes vital to society'.

In 2003 Weir won a 'reconstruction' contract in Iraq, working on the country's oilfields as a subcontractor for Halliburton. Peter Syme, Weir's managing director of engineering services, said, 'There is a lot of potential for us in the power market because a lot of the equipment that Iraq bought to operate its plants was made by us. We'd be upgrading our own infrastructure.'15

When it first accepted the contract, Weir complimented the British government for its role in helping secure it. Mark Selway, Weir's Chief Executive, said:

I don't often praise the government, but thanks to the efforts of [DTI secretary] Patricia Hewitt we got the right introductions. A couple of months ago we had our guys in Washington DC talking to Halliburton and other companies about this work, and the government put forward our name at the very highest levels. We hope to see more outcomes like this contract.16

Weir was also one of 11 UK firms – including Aggreko and Mowlem – which picked up around 18 subcontracts for the US engineering firm Bechtel, which holds the main £430m deal to rebuild Iraq’s infrastructure.17

Weir is also one of the companies under investigation for financing Saddam Hussein's regime through manipulation of the 'oil for food' programme. The regime is thought to have taken over £11.5 billion in kickbacks between 1991 and 2003. Weir is unable to account for £4.3 million.18

Weir is also hopeful that the nuclear industry is taking off again, following a contract win for a controversial new reactor in Finland.19 Weir Strachan & Henshaw (based in Bristol) were bidding to supply the AREVA/Siemens nuclear power plant project (OL3) with some of the handling equipment.20 Finland is the only country in the western world with a concrete project of building a new nuclear power plant.

The Weir Group owns 24.5% of Devonport Management Ltd. DML runs the privatised dockyard at Devonport, where Britain's Trident submarines - which carry weapons of mass destruction - are maintained. It also has 'facilities' at Faslane Naval Base. The rest of DML is owned by old favourites Halliburton (51%, through subsidiary Kellogg Brown & Root) and Balfour Beatty (24.5%).21

In a 2001 report Christian Aid stated that 'The government of Sudan is clearing huge tracts of southern Sudan to make way for oil production. Troops are terrorising civilians, burning homes and attacking villages from the air in a war for oil'.22 The report goes on to criticise foreign oil companies for their involvement in the conflict through the construction of a new pipeline, for which Weir Pumps provided the pumping stations. According to a former Sudanese governor, who had just managed to escape with his life, 'Without British technology, that oil cannot come out of the ground and it cannot be pumped through the pipe-line. Supporting the oil industry is supporting war... People will fight back because this is their land, More death, more killing, more suffering to the civilian population.'23

Weir Pumps has offices in Glasgow and Manchester.

Employment in the oil industry

Working in the oil industry is a precarious business, not just with the effects of climate change and the 'maturing' (i.e. 'running out') of the North Sea oil fields, but also with companies cutting jobs, casualising labour and very real health and safety issues. Besides, with the rapid advance of technology, there are now several unmanned rigs in the North Sea. There are several specialist oil and gas personnel companies based in Aberdeen including Aquatic Engineering and Construction Ltd; OPS Group; Genesis Oil and Gas; Oil Exec.

Casualisation and downsizing in the oil industry

'We believe cuts will have a massive impact on health and safety and that its only a matter of time before someone pays with their life.' John Wall, Amicus Scottish National Secretary24

80% of the North Sea workforce is employed by outsourced contractors rather than directly by the oil companies.25 'Flexibility' is desirable to the companies as it allows them to change the number of employees in line with the booms and busts of the oil industry, and to keep costs down by forcing contractors to compete for their business. Outsourcing is also unhelpful in terms of safety, as with a transient workforce it is hard to maintain training, trust and cohesion, and outsourcing blurs the responsibility for accidents between operators and contractors.

Despite its ongoing safety failures in Scotland and the North Sea (see below), BP continues to cut jobs. In 2001, BP cut the workforce at Grangemouth refinery by 40% (from 2500 to 1500) on top of the staff cuts it had made over the previous three years. Four months later BP Exploration cut 500 jobs from its Aberdeen HQ, from offshore and onshore facilities, and restructured its contractor base.

Health and Safety in Scottish oil industry

Despite Britain's strict health and safety legislation, and a critical media and political culture, Grangemouth refinery and the offshore oil installations have had a litany of disasters.

On New Year's Day 2005, an electrician working for the John Wood Group died of gas poisoning on a Shell-owned North Sea oil rig.26 In September 2003, two other workers also died of gas poisoning on the same rig. According to Jake Molloy of the Offshore Oilworkers' Liaison Committee (OILC), 'Shell has more or less confirmed that there were shortcomings. Management controls and risk management controls were left wanting.'27

Mounting accident figures on North Sea platforms have alarmed trade unions and led to questions about Britain's dependency on ageing oil and gas equipment where investment levels have fallen. A confidential report by the Health and Safety Executive seen by the Guardian in December 2004 gave a frightening picture of broken safety equipment, ill-trained workers and badly-maintained systems on another Shell oil rig.28

Piper Alpha - 6th July 1988

'Despite one of the worst disasters in British history and the death of 167 men, the company that owned Piper Alpha - Occidental Petroleum (Caledonia) Ltd - and its senior directors have not been brought to justice and prosecuted for any offences relating to the death of the workers.' Gavin Cleland, corporate manslaughter campaigner29

On the 6 July 1988 there was an escape of flammable gas on the oil rig Piper Alpha in the North Sea, about 100 miles off the East coast of Scotland. The gas ignited, sparking a series of explosions on the ill-maintained and overloaded oil platform, tearing it apart and sending flames over 100 metres into the air. 167 oil workers lost their lives. The Cullen Report into the tragedy - the world's worst-ever offshore oil disaster – took two years to produce and found severe shortfalls in the safety procedures of Piper Alpha's owners, Occidental Oil. However, the company was never prosecuted. The campaign for justice continued until the death of Gavin Cleland, father of one of the oil workers who died on the Piper Alpha, in 2004. Cleland lobbied the Scottish, European and Westminster parliaments to secure a prosecution and to have the crime of corporate manslaughter entered on the statute books. Occidental no longer operates in the North Sea.

The Offshore Industry Liaison Committee (OILC) and workers' rights

After the Piper Alpha disaster, offshore oil workers spontaneously came out on strike calling for better health and safety conditions, and for the oil companies to maintain existing agreements for health and safety. This ultimately led to the formation of the Offshore Industry Liaison Committee (OILC) in 1989. That same year, OILC issued a call to all offshore workers to take 24 hour strike action on 6th July, and it was proposed that the stoppage become an annual event in memory of the Piper Alpha disaster and all oil workers who have lost their lives in the North Sea.30

The foundation of the OILC was controversial in itself. Its very existence proved a threat to the extremely anti-union oil industry, and it also proved a threat to the established unions who perceived an implicit criticism of their failure to make oil rigs a safe place to work. It was not invited to join the Trades Union Congress when it became an official trade union in 1992. While OILC's main campaign is for health and safety, it is naturally concerned about workforce casualisation and down-sizing. It also takes an internationalist stance, working with campaigners against the Baku-Ceyhan pipeline project, and supporting Colombian oilworkers targeted by the Colombian military. OILC is based in Aberdeen.

The major UK oil companies, in the meantime, have continued to erode workers' rights. Between 1993 and 1995, BP switched all its staff onto 'single staff' status, meaning that unions can only negotiate on health and safety issues; pay and conditions are up to individuals to resolve themselves without support. This was achieved by a series of financial inducements and psychological pressure. At Shell Expro there has never been any collective bargaining except on grievances and disciplinary procedures. At Grangemouth, BP ceased to recognise unions in 1995 after a ballot, in which bullying and bargaining led to BP workers accepting a £1,500 lump sum and 6% wage rise in return for abandoning collective bargaining.31

The situation for oil workers in developing countries is far worse. Speaking outside the BP AGM (April 2004) which she was not allowed to attend, Mirvari Gahramanli, Chair of the Committee for Protection of Oil Workers' Rights in Azerbaijan, explained how workers have been sacked for complaining about their working conditions. She called on BP to 'treat Azeri workers in the same way they treat British and American workers.'

A note on working with oil workers

Oil workers don't have a great reputation. One source described life on oil rigs as 'builder culture gone mad'. The work may be better paid then equivalent onshore work (unskilled deck crew starting at £18k, up to £25k for skilled work) but working offshore is dangerous and requires long hours: 12-14 hours a day, 7 days a week stuck on an oil rig for weeks at a time (generally two weeks on and two weeks off). This working pattern is also disruptive to family life.

Oil workers may well be ready to speak about how globalisation has affected them through the profit-over-safety attitudes of the oil companies and the increasing casualisation and downsizing of labour. They may well also be ready to show solidarity with oil workers who are being shafted worldwide from Iraq to Azerbaijan. It is probably safe to assume that oil workers will be less willing to speak up on climate change as any serious action on this would spell the end of their jobs.

In the USA, the Just Transition movement has developed to argue that workers must be intimately involved in the process of transition away from environmentally damaging activities and that the polluting industry must contribute to a fund to support employees who lose their jobs as well as help them retrain in new areas. A number of unions in the USA and Canada are now calling for strong action on climate change based on the principle of Just Transition.32

Scotland's oil refineries

There are 12 refineries in the UK – including Grangemouth (which supplies 90% of Scotland's fuel) and Nynas in Scotland, which makes naptha and bitumen and is owned by Swedish company, AB Nynas Petroleum (based in Dundee). The Nynas refinery, formerly owned by Tarmac, imports crude oil from South America via Dundee, refining it into a number of different products such as bitumen for road building, bunker fuel and diesel oil.33

Grangemouth (pop. 20,000) is a small town on the River Forth. It has had an oil refinery since 1924 which is currently owned by BP. In November 2004, however, BP announced plans to sell off the refinery, possibly to an American company, although BP will keep control of the Forties oil pipeline. Locals fear that BP is running down its investment in the refinery in the run up to the sale, and that they will have even less transparency and accountability if the refinery is sold to a foreign buyer.34

Next to the refinery is the Grangemouth petrochemical works, from which runs a 240km UK ethylene pipeline carrying chemicals to Wilton on Teesside in NE England. Grangemouth is surrounded by major chemical plants which have developed as the town has become one of the major chemical producing areas in Britain. Companies include Avicia, Biomar Ltd, Dalkia Utilities, Polimari Europa UK Ltd, Ross Chemical and Storage Company Ltd, Firmin Coates Ltd, Rohm and Hass (Scotland) Ltd, Calor, Macgas and Syngenta. In the list of Scotland's top ten biggest polluters, Grangemouth is represented four times, by three BP companies, and by Avicia Ltd, the old ICI plant, which came second in the list Scotland's top polluters.35

In 2000, fuel protesters blockaded the oil refinery for three days with BP immediately suspending all but emergency deliveries. BP claimed it was holding back its tanker drivers for 'worker safety', but considering how much BP usually cares about its staff at Grangemouth (see below), it is likely that BP made a political decision to collude with the protesters; putting pressure on the UK government not to even consider raising the fuel tax.

Health and safety record at BP's Grangemouth refinery

In 1990, two explosions within 10 days at Grangemouth killed three workers. In 1998, 55 workers at the refinery were exposed to dangerous asbestos dust for two days. In July 2000, evacuation alarms failed to go off when explosive gas leaked around the plant and two days later caused a serious fire. It took seven hours to bring the blaze under control – two on site fire engines broke down on the way to the fire highlighting serious failure in the safety system. The fire was the seventh safety incident in the space of a year. One contractor said, 'The workmen don't have any confidence in the safety of this site'. Several workers required trauma counselling, so dangerous were the conditions they had to work in.36

In January 2002 the group was fined £1 million for breaching safety laws at Grangemouth. This was the largest fine ever of its kind in Scotland. Analysts at Credit Suisse First Boston and local MPs lay the blame on BP's slashing of its workforce at the plant.37 BP claims to have improved conditions at the plant since.38

Fence line communities

'Discharge from BP's petro-chemical complex last year included carcinogenic benzene and related compounds so there must be serious health implications for the people of the Forth Valley'39 Dennis Canavan, Falkirk West MSP

The Grangemouth refinery and the surrounding plants and factories create a fantastical landscape at night, rather like the Blackpool illuminations, and the stories from fence line communities living within the glow of Grangemouth are shocking. There is constant noise and light from gas flaring at night, black smoke and fallout, high levels of asthma and fear of a major explosion. Incredibly, there has been no ongoing independent monitoring of the effects of the refinery on the health of those living nearby.

There are clearly pros and the cons for the local population of the refinery in Grangemouth. The refinery and associated businesses provide jobs, although with recently there have been massive job cuts and R&D graduates have been favoured over locals. The conditions also prevent other businesses moving in and have turned the nearby fertile agricultural land into marsh and bog. Most locals commute to Falkirk, Glasgow or Edinburgh for work. There are other social justice issues for fence-line communities in Grangemouth, with the poorest people being housed in council housing right next to the refinery. With a public road running through the refinery, many locals are also afraid that the plant is a very serious security risk. There is stronger feeling down the road in Bo'ness, a town that only suffers the pollution and has none of the employment benefits.

'Sustainable' energy in Scotland

Scottish Hydro Electric

The UK currently generates about 1.8 per cent of its electricity from large-scale hydroelectric schemes - most of which are found in the Highlands. Scottish Hydro Electric, which claims to be the UK’s largest supplier of renewable energy, is owned by the Scottish and Southern Energy Group. The company is currently building smaller scale hydro electricity plants in Scotland, as all potential sites for larger schemes have already been developed.

ScottishPower and Hydroelectric dams

Glasgow based ScottishPower is a multinational energy giant providing gas, electricity and water to millions of households in the UK. Through its US subsidiary, PacifiCorp, it supplies around 1.5 million households in the USA.

PacifiCorp owns and operates dams on the Klamath river in California and Oregon. These dams have had a serious detrimental impact on the environment and livelihoods of the people living along the riverbanks. The dams have degraded the water quality and caused a serious decline in salmon numbers in what was once America's third greatest salmon river. Over a million salmon used to return annually, now that figure is more like 100,000 and two salmon species have become extinct. The livelihoods and culture of native people living alongside the Klamath river are dependent on the annual return of the salmon. Representatives from affected groups attended ScottishPower's AGM in 2004 and received some commitments from PacifiCorp and ScotishPower, but things might not have moved on by next year. See www.friendsoftheriver.org for more information.40

Nuclear Power

Scotland has three nuclear power stations. Chapelcross in Dumfries and Galloway - now being decommissioned - exports power to England. Two others - Hunterston B in Ayrshire and Torness in East Lothian - meet 50% of Scotland's electricity demand. Dounreay, Scotland's notorious power plant, is currently being decommissioned, and was highly criticised for its safety culture. Meanwhile, the Labour Party is planning to publish a White Paper that would pave the way for the construction of several new nuclear power stations if it wins the General Election.

Wind Farms

Britain has by far the greatest wind resource in Europe and the potential to generate substantial energy from wind turbines combined with other renewable forms of energy – solar, wave and biomass.

There is a strong anti-wind farm lobby in Scotland. While much of this is NIMBY-ism (not in my glen!), it's clear that the Scottish Executive and corporations have been pretty thoughtless in siting wind turbines in areas of outstanding natural beauty and ecological importance, and this has led to their unpopularity. It has led to the crazy situation of environmentalists campaigning against wind turbines. For example, AMEC and British Energy have announced plans to build the world's biggest onshore wind farm, which could supply 20% of Scotland's electricity needs, on the Isle of Lewis Peatlands, which are protected under the EU habitats directive and home to many rare birds including golden eagles, merlins, divers and wading birds.41 Many locals have also asked why these two big multinational companies should own the wind farm, rather than the local community. There is a precedent for this, as the Isle of Gigha, which is owned by a community trust, owns its own wind farm, which started running in December 2004.

The Scottish Executive has also funded Talisman Energy and ScottishPower £3m to build a windfarm, despite the fact that Talisman Energy is currently embroiled in a £2bn court action for its role in human rights abuses in Africa.

The oil industry in Scottish Universities

'Our engineers, geologists, economists, environmental lawyers and sociologists have played their part in the growth of Aberdeen as an international oil centre.'

Professor Maxwell Irvine, Former Principal of Aberdeen University4

Few universities have handed themselves over so completely to the oil and gas industry as Aberdeen. Its Oil and Gas Centre was founded in 1995 with support from BP. Many academic positions are funded by the oil and gas industry including the Shell Chair of Production Geoscience; the BP Arco lecturer in Petrophysics and the ExxonMobil lecturer in Structural Geology.

In Edinburgh, Heriot-Watt University has an Institute of Petroleum Engineering with teaching and research tailored to the needs of the petroleum industry. At Dundee University, policy and legal areas of the oil and gas industry are the focus of the Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP).

This 'capture' of Scottish universities represents problems for efforts to reduce climate change by replacing fossil fuels with renewables - public funding for oil and gas research mainly comes out of the same pots as funding for renewables research, so more research in the (big, rich, mature) oil industry means less for the (small, relatively poor, developing) renewables. This hidden subsidy also serves to maintain oil industry competitiveness as compared to renewables and ties the thinking and strategy of universities to the interests of the oil companies.


  1. Rising Tide, Beyond Oil: The oil curse and solutions for an oil-free future, October 2004, www.carbonweb.org/documents/beyond_oil.pdf, last viewed 10.03.05; Platform et al, Some Common Concerns: Imagining BP's Azerbaijan Turkey Georgia pipelines system, October 2002, available to download at www.baku.org.uk/some_common_concerns.htm, last viewed 10.03.05; Corporate Watch, 'The Oil and Gas industry – A Guide for UK activists', 1998, www.corporatewatch.org.uk/publications/oil_gas.html, last viewed 10.03.05
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  34. Pers.comm. Anonymous source
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  40. Friends of the River website, S. Craig Tucker, 'Scottish Power makes Commitment to Tribes, FOR, and PCFFA',

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