January 18, 2012 at 3:27 pm #1972
Threat to oil sector from tough regulations and green policies
By Roland Gribben | Telegraph Mon, Jan 16, 2012 11:46 GMT
Regulatory pressures and ‘green’ policies are threatening the future of Britain’s eight remaining oil refineries and could result in further closures, the industry has warned the Government.
The Petroleum Industry Association (PIA) has told the Energy Department that British regulations are now the toughest in Europe and could impose an extra 1bn a year burden on British refiners and make it more difficult to fund new investment.
Ten refineries have closed in Britain in the last 40 years while both BP and Shell have sold plants because of poor returns and competition from bigger and more sophisticated units in the Far East.
Charles Hendry, energy minister, has already ordered a review of the industry, particularly the risks to security of supply and is studying the latest IPA update on the challenges facing the sector.
Changes in the transport fuel mix and the squeeze on investment have seen the industry struggling to keep pace with the growing demand for diesel fuel and drop in petrol. Diesel demand has jumped more than 40pc since 1998 while surplus petrol is being exported to the US and other countries.
Diesel fuel is being imported from Russia to fill the gap and with investment of 500m needed at each refinery to increase capacity and reduce the reliance on foreign supplies the PIA sees little sign of the trend being reversed.
The PIA is also pointing out that meeting tighter product specifications, particularly reducing sulphur content involving investment of between 300m-700m per refinery, will take several years to plan and build.
New, tighter safety rules, resulting from the disastrous fire at the Buncefield storage depot in Hertfordshire could mean additional capital investment of “hundreds of millions of pounds” over an extended period.
January 18, 2012 at 3:29 pm #4752
Here is news item showing UK has as much risk of refinery closures as US from tough regulations and green policies. Like the US the UK has also closed half its refineries (20 refineries reduced to 10) over the last 40 years.
In the UK only COP Humber refinery has cokers the other 9 refineries are cracking refineries. COP Humber is largest anode and needle coke producer in Europe.
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