Strike Closes Oil Pipeline Causes Petrol Panic In Britain

Strike closes oil pipeline causes petrol panic in Britain

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2 hours ago

GRANGEMOUTH, Scotland (AFP) — Britain on Sunday shut down a North Sea pipeline which supplies 40 percent of its oil and gas and there was panic-buying of petrol after a strike at a major refinery.

The start of a two-day walkout by around 1,200 workers at the Grangemouth refinery, west of Edinburgh, forced the neighbouring Forties pipeline close down at the same time, operator BP said.

The pipeline brings more than 700,000 barrels of crude oil ashore every day and supplies Britain and international markets. It cannot function without power and steam from Grangemouth.

The two walk-out, organised by trade union Unite, is over a pensions row.

Staff and families held a demonstration Sunday outside the refinery, which could take weeks to get fully up and running again after the strike.

Britain's main opposition Conservative Party warned the strike will hit world oil prices, while the ruling Labour Party is urging calm and says there are enough stocks to last through the strike.

Many motorists, particularly in Scotland and northern England, are rushing to pumps to stock up, despite government reassurances there is enough in reserve to go round.

Some petrol stations have introduced rationing or price hikes while others have run dry.

The Scottish government is shipping around 65,000 tonnes of fuel -- mostly diesel -- in from Europe to bolster supplies during the action. This should be enough to last about 10 days.

Offshore oil industry body Oil and Gas UK has urged politicians to intervene in the dispute, saying the pipeline closure will cost the economy 50 million pounds (63 million euros/100 million dollars) per day in lost production.

But Business Secretary John Hutton said the government had made "every effort" to prevent the action taking place, particularly the closure of the pipeline.

"What the government's responsibility is, is not to take sides in this dispute," he told BBC television.

"I think it's (the strike) not justifiable, I think we're bringing into this parties who are innocent bystanders."

Alan Duncan, the Conservative industry spokesman, warned that the closure would hit world oil prices.

"The interdependence of our North Sea oil production and the refinery...has implications for global oil prices," he told Sky News television.

"So world oil prices have gone up and we're going to see local oil prices and petrol prices going up."

On Friday in London, Brent North Sea crude for June rose two dollars to 116.34 a barrel after earlier crossing the key 117 dollar mark.

Some 70 oil fields feed into the Forties pipeline. Around two-thirds of oil from it is immediately exported.

Professor Alex Kemp, an oil economist at Aberdeen University in Scotland, told the BBC that the pipeline closure would lead to the complete shutdown of production in oil fields.

"Although some platforms may have limited storage space, it will be nothing like on the scale required for production to continue while the pipe is out of action," he said.

It is the first time in more than 70 years that a British refinery has been shut down due to a strike.

The dispute comes at an awkward time for Prime Minister Gordon Brown, ahead of local elections on Thursday in which opinion polls suggest his Labour Party could struggle.