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Grangemouth strike: Anglo Disease in action?

by Jerome a Paris Sun Apr 27th, 2008 at 10:03:37 AM EST

Strikes close BP pipeline in Scotland

A pipeline that carries nearly half of Britainís North Sea oil was closed on Sunday as 1,200 workers at the Grangemouth refinery, near Edinburgh, started a two-day strike over pensions. The closure is estimated to cost the UK economy £50m, according to an industry body.

In spite of last-minute industry pleas for government intervention, the trade union Unite refused to supply enough sufficient steam from the refinery to maintain the operation of BPís adjacent Kinneil plant, which processes crude oil coming ashore from 70 North Sea fields.

There is a lot more information in the most recent thread over at The Oil Drum (from which the above image by Euan Mearns is taken), but I'd like to flag just a few points that seem to be typical of our times, and maybe warrant making this a symptom of the Anglo Disease:

  • the strike is about company-provided pensions. With falling or stagnant stockmarkets, market based pension funds, especially those run by corporations on behalf of their workers, are in trouble and need to find ways to reduce their liabilities. Pension contributions are seen as a source of "fat" to be trimmed by corporations at the expense of their workers;

  • in line with that, you can of course read outraged quotes from corporate voices blaming unions for taking the "whole economy hostage." The problem is always unions, and workers, and never management and their decisions to cut "fat";
  • the strike is taking place in a bit of infrastructure that was spun off by BP and sold to a private equity fund while still be, technicaly speaking, part of a coordinated industrial complex that needs to be run as a whole (pipelines, refineries, power generation). Losing power or capacity in one bit can trigger closures in other activities, with knock-on effects. Resilience, and industrial common sense have lost out to short term financial return requirements...
  • amongst knock-on effects are the consequences not so much on oil markets, but on gas markets, in particular the UK one, which has been built on the asusmption that there would be permanent oversupply. Now that it needs to import, and with very little storage capacity, lost production will have immediate impact on natural gas prices. The markets will provide, in the form of demand destruction from industrial users with interruptible contracts, but is that a serious way to run an economy in the long term?
  • finally, it is worth noting that a small local conflict by just a thousand workers will have a global impact, pushing prices of our most precious commodity up worldwide (the run-up in the past few days was already linked to expectations surrounding this strike). This is both a sign of our increased vulnerability to a tight oil supply/demand balance, and possibly a sign of hope that the balance of power between financiers and the rest of the world is finally changing as reality (and in particular physical and human bottlenecks) reasserts itself against the mad rush for short term profit.
Infrastructure matters whether it is transport, basic industry or institutional frameworks. You can only ignore it for so long. Countries that do infrastructure well (and which include people in what is meant by "infrastructure") are likely to do a lot better in the long run.


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as Euan's image suggests, infrastructure is almost always highly political.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Apr 27th, 2008 at 10:04:51 AM EST

in an extended version


In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Apr 27th, 2008 at 03:02:31 PM EST
[ Parent ]
Yes, but this makes an assumption that, confronted with this stark reality, the British Government will have a Damascene conversion and reverse the idiotic privatisation of infrastructure policies of the last 30 years.

I hate to disabuse you, but Gordon Brown is not for turning.

As Andrew Rawnsley wrote in the Observer today about the 10p tax issue

He has never been notorious for his tolerance of contradiction, never famous for being porous to other views when he has made up his mind about something. Mr Brown found it especially hard to accept that he had got this wrong because it collided so completely with his image of himself

and this was when it was obvious. He is not just a convinced Atlanticist with neocon sympathies, he is a complete Freiman-ite Free Market convert with a side order of Straussian/Ayn Rand-ism. He didn't hesistate to nationalise Northern Rock because he was scared of being slagged off by Murdoch, it was against his every intellectual belief.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Sun Apr 27th, 2008 at 11:00:19 AM EST
What you said!
What happened to the Labour Party, anyway? When did it get taken over my Maggie Thatchers more clubbable nephews?  I think we should all rue the day that Tony Blair was born. But that of course is a cheap shot at any single poltician, no matter how loathsome. What broader forces acted to bring these men to power? I suppose the history has been written, but if you know of good source for education of foreigners like myself, I'd be grateful.
by PIGL (stevec@boreal.gmail@com) on Sun Apr 27th, 2008 at 12:17:27 PM EST
[ Parent ]
Oh grief, long story.

I think TBG and Metatone have a better view than I, but maybe I ought to write a diary with my view on causes and timeline and then let battle commence in comments them correct me . At the end of which we might have a proper narrative.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Sun Apr 27th, 2008 at 12:33:21 PM EST
[ Parent ]
Whatever you have time to jot down, even in the way of links, would of great interest, at least to me, Helen.

BTW, what is the Fen Causeway?

by PIGL (stevec@boreal.gmail@com) on Sun Apr 27th, 2008 at 12:52:04 PM EST
[ Parent ]
There are numerous theories.

However the Fens are a low lying marshland in Cambridgeshire/Lincolnshire. So it seems like good advice to keep to the causeway in order to avoid getting wet.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Sun Apr 27th, 2008 at 01:18:06 PM EST
[ Parent ]
The History is written

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Sun Apr 27th, 2008 at 03:57:07 PM EST
[ Parent ]
Reading it now!
by PIGL (stevec@boreal.gmail@com) on Sun Apr 27th, 2008 at 05:20:48 PM EST
[ Parent ]
Yes, but this makes an assumption that, confronted with this stark reality, the British Government will have a Damascene conversion and reverse the idiotic privatisation of infrastructure policies of the last 30 years.

I read the piece as saying that the policies of the Anglo disease have these kind of ill effects, not as saying that anybody in power would recognise that fact any time soon and do anything to change course.

That is:

Countries that do infrastructure well (and which include people in what is meant by "infrastructure") are likely to do a lot better in the long run.
... says nothing to suggest that the UK or the US will change course in order to be amongst the countries that do infrastructure well.

Countries have in the past held onto failed economic ideologies and have thereby driven their economies into the ground.

So the fact that the current US and UK approach to the economy is one that is doomed to fail in an environment of rising energy costs and ever-increasing importance of energy and material efficiency is not a prediction about whether the US and/or the UK will change course ...

... its only an observation that they should.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun Apr 27th, 2008 at 12:21:16 PM EST
[ Parent ]
Yes. I should have made that as clear as you did, but lacked the elegance.

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Sun Apr 27th, 2008 at 12:30:59 PM EST
[ Parent ]
Well, not much to say re the "Anglo Disease" and Grangemouth except to agree that you won't be seeing the billionaire owner of Ineos pilloried anywhere for fucking up the oil market.

What I shall miss - for a few nights anyway - are the fantastic views we get of Grangemouth, which is only a couple of miles away as the crow flies.

Firstly, driving to the shop for a beer or whatever when the clouds are down, there is an infernal orange glow, and flickering flames above the intervening hill.

Then I know exactly how Mordor must have looked from a distance to the good guys.

Secondly, from the viewing point at the West Lothian golf course Grangemouth can look uncannily like the dystopian future Los Angeles in the incomparable opening credits of "Blade Runner".

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sun Apr 27th, 2008 at 01:22:43 PM EST
I'm sorry, but Grangemouth sounds like a symptom of the Anglo disease. Perhaps it is related to Thrush or perhaps to foot and mouth?

It would seem that there is a great deal of "foot in mouth" going around in British politics these days. Is there something about the water at 10 Downing Street which makes those who occupy the dwelling suddenly turn stupid?

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Sun Apr 27th, 2008 at 02:20:34 PM EST
Sounds about right!

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Apr 27th, 2008 at 03:06:08 PM EST
[ Parent ]
There is interestingly little coverage on what the oilworkers are actually striking about, just the repercussions of their strike. This plays into the owners who wish to make sure that the strike/industrial action = unions playing havoc equation stays strong. This is heightened by the statement on Ineos's website:

Union Statement Shows Strike is About Pensions For Non Existent Workers

Which makes it look like the unions are stopping a third of the UK's oil production over, literally, nothing.

Of course, to portray future workers as 'non-existent' is a misrepresentation, the unions simply wish to see the current - affordable - pension scheme not closed to future members. But there was also a second issue at stake, that of 'reducing the value of the pension to current staff' (from Unite's website). Both of these issues are what the strikers were balloted on, and resolved by 97% to strike against.

However, Ineos during 'negotiations' suspended all changes to current members' pensions, leaving only the future members as an issue. Of course, this has allowed them to portray the strike action as harming the UK economy without any benefit to anybody currently in existence.

As Jerome pointed out, the real problem is not the closure of the Grangemouth refinery itself, but that it is part of a larger piece of infrastructure: the Forties pipeline, and the Kinneil plant. A private company has thoughtlessly been handed a key piece of national infrastructure, and can now use its 'national importance' as a way of framing a dispute against the unions. A lot of their press releases 'plead' with the union not to spread the dispute and punish unconnected parties, but when they own such an important asset, such a knockon effect is unavoidable at some point.

Member of the Anti-Fabulousness League since 1987.

by Ephemera on Sun Apr 27th, 2008 at 03:50:22 PM EST
A private company has thoughtlessly been handed a key piece of national infrastructure, and can now use its 'national importance' as a way of framing a dispute against the unions.

bingo, just like northern rock and bear stearns.

the crude, cruel lines of power politics emerge....

get big enough and you too can be 'too important to have to play by the same rules the plebs have to'.

splendid port, my man!

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Mon Apr 28th, 2008 at 07:07:40 AM EST
[ Parent ]
If the loss of these workers' labour for two days will (allegedly) cost the economy £50m, then how much would it cost to provide them with decent pensions over the course of a forty year working life?
by Sassafras on Sun Apr 27th, 2008 at 04:27:32 PM EST
Who got the retarded idea that companies should give people pensions? Pensions are supposed to be either tax financed or reliant on the savings of the individual, or both.

Sure, we have pensions from companies too as a part of out pension system, but IIRC they are dependent on wage and shunted into special funds which the company can't touch. Of course, they can lower the pension from work done going forward, but can't touch the stuff which is already in the funds, given as a compensation of past work.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Sun Apr 27th, 2008 at 04:38:33 PM EST
[ Parent ]
Who got the retarded idea that companies should give people pensions?  

Pensions are part of the compensation to workers for--you know--working.  

The company could have paid higher wages, but chose to promise to pay pensions instead.  When companies reneg on pensions, they are stealing, literally.  Unfortunately the courts do not mind.  

The Fates are kind.

by Gaianne on Sun Apr 27th, 2008 at 09:02:23 PM EST
[ Parent ]
They are only stealing if they take back pensions that have been promised for work already done. This is what I am saying. Creating a system where companies are put in a situation where they can/have to do that is insane.

Cutting future pensions from work being done in the future is not stealing, it's cutting wages. The same thing as raising nominal wages less than inflation.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Mon Apr 28th, 2008 at 05:29:04 PM EST
[ Parent ]


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