A UK minister has ruled out using “record revenue” from the oil and gas industry to save Scotland’s only refinery – saying energy security is not viewed through a “separatist lens”.
Energy minister Graham Stuart was grilled by MSPs on why public support was not being considered to help keep Grangemouth open.
He was asked if he would be “as relaxed” if it was England which was going to be left without capacity to refine oil.
It was announced in November that Scotland’s only oil refinery, located just outside Falkirk, would close putting hundreds of jobs at risk - with owners Petroineos blaming shrinking profit margins.
It is the only operating crude oil refinery in Scotland, and one of only six remaining in the UK.
READ MORE: Alba urge Scottish and UK governments to help save Grangemouth
Appearing before Holyrood’s Economy and Fair Work Committee, Stuart said it would not be a “sensible use of British taxpayers’ money” to provide support to help the refinery continue to operate.
However Alba MSP Ash Regan said figures for 2022/23 had shown the revenue from Scotland’s oil and gas activity was a “record amount” at £10.6bn and that it has been reported an investment of around £80 million would be required to make Grangemouth profitable.
She asked: “So does the UK Government not understand that in this context Scotland and the people of Scotland would reasonably expect a share of the revenues coming from oil and gas to be invested back into Scotland’s infrastructure?”
Stuart (above) replied: “Of course the oil and gas industry is in Scotland but it is part of one United Kingdom, of course it comes in tax receipts to the Government and has allowed the Government to subsidise Scottish and every other households energy bills over the last few years.”
He went on: “We have one of the highest tax rates on oil and gas in the world which is why it is expected to bring in £30billion over the next five years in tax revenues, which of course would all be put at risk by those who refuse to allow new investment, new licences and manage the decline of the North Sea, putting at risk tens of thousands of jobs in the North East of Scotland and 200,000 jobs across the UK.
“So it is absolutely right we need a joined up, rational policy which optimises both energy security and the welfare of our peoples.”
READ MORE: 'Naval-gazing': Grangemouth industry board slammed over inactivity
Regan went on: “You talk about one United Kingdom but it is Scotland that produces the oil and gas for the UK and it is Scotland that will be left with no refinery.
“Can the minister say they would be so relaxed about this if the boot was on the other foot and it was England that was having no capacity to refine oil?”
Stuart responded: “We make an assessment on, we are the United Kingdom Government, we look at the numbers and assess the security for the whole of the United Kingdom.
“That’s how we look at it, we don’t look at it through some separatist lens, we try and look at it where we treat everybody as having equal value and we work together.
“And it is that Union that of course has been the great strength of this nation for such a long time, a Union which I am confident will continue for many years to come.”
Meanwhile SNP MSP Gordon Macdonald highlighted concerns that further loss to the UK’s refining capability could post a risk to energy security as a result of having to rely more on imports.
He said an estimated £40million needed to continue refining operations at Grangemouth was a “drop in the ocean”, compared to around £300billion from oil profits which has gone to the UK Treasury since the 1970s
The UK Energy Secretary responded said: “If Petroineos can’t see the commercial sense of investing in a refinery which they themselves have been unable to make profitable over a substantial period, and which they say is inherently inefficient, I do not think that would be a sensible use of British taxpayers’ money.
"Especially as our estimate is the change from being a refinery to being an import terminal does not fundamentally affect the energy security of the UK or indeed Scotland.”
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