Petrol Panic grips the nation. A second week of fuel shortages on the forecourts threatens to hobble the economy, or at least erode support for the Tories in their heartlands and overshadow the Conservative Party Conference. Will queues at the petrol pumps in Manchester crowd the prime minister’s show? The Shell stations in Bolton were still dry on Friday 1st October. What will unfold on Monday 4th October at the Essar garage in St Annes, four miles east of the conference center?
There’s no shortage of people being blamed for the crisis – from the HGV drivers to the EU, from the DVLA to Insulate Britain. For as has frequently been reported, there is not a lack of petrol at the refineries and fuel depots, merely a problem with the flow of road tankers distributing it to the pumps. The issue is not with the amount of oil, but the control of the flow of oil. Any crisis such as this is used by politicians and corporations alike to enhance political power or return on capital. Figures in the government endeavour to use the Petrol Panic to improve their status as being able ‘to sort things out’. But what of the corporations in the past two weeks? Have any sought to turn the distress in the petrol queues to their advantage?
It seems likely that Liverpool was the first port through which oil flowed into the bloodstream of Britain. It arrived in wooden barrels in 1860, freighted across the wide Atlantic from the ports of the American eastern seaboard. Since then, crude has been shipped into the muddy waters of the Mersey and its products out across the region – a constant flow of the geologies of elsewhere for a hundred and sixty years.
The key node in this flow has been, and remains, the refinery at Stanlow. When motorists in Liverpool, or walkers in Birkenhead, look south down the Mersey, the horizon is etched out with the chimneys and stacks of the plant. Here is a factory so iconic that it has had two music tracks penned in its name – Stanlow by OMD and Stanlow by Jesu. (The story behind the OMD track Stanlow is explored in Crude Britannia.)
Today the refinery ingests crude from the UK North Sea, the Gulf States, Russia, Nigeria and beyond, processing it into petrol, diesel, aviation fuel, tarmac and feedstock for petrochemical plants. From this vast chemistry set, working day and night without ceasing, fuel is exported, via the Manchester Jet Line to the planes at Manchester Airport. Stanlow also supplies Birmingham, Liverpool and Heathrow airports. A second line, UK Oil Products North pipeline, takes petrol and diesel to depots in the Midlands and Southern England. At the gantries of Stanlow are filled road tankers that supply petrol stations across the North West and Northern Wales. Forecourts as far off as Porthmadog in Gwynedd carry signs saying ‘provided by Stanlow’ underneath the brand name Essar. The refinery supplies petrol stations of all brands – Shell, Morrisons, BP, Jet, Esso and more. Indeed Essar boasts that Stanlow provides approximately 16% of the UK’s road transport fuels.
For Stanlow, after a century in the ownership of Shell, was sold in 2011 to Essar Energy, an Indian multinational based in Mumbai. Shell closed the next door research laboratory at Thornton the following year with 300 staff laid off or relocated. The corporation saw the move as part of a general pulling out of Britain and global refining. Mr Hunter, Supply Contracts and Negotiations Manager at Shell, told a Parliament in 2013: “We exited the UK, and we have exited a number of refineries across the world over the last few years, because we want to reduce our overall exposure to the global refining margin.”
The sale of Stanlow by Shell fitted into a UK wide pattern. In the1980s four major refineries were decommissioned, including BP’s plant on the Isle of Grain (1982). These were followed by further closures, such as at Teeside (2009) and Coryton (2012). Slowly the UK’s oil refining capacity was cut from 18 substantial refineries in 1970 to six in 2021. Consequently, since 2013 the UK has been a net importer of petroleum products, which has raised concerns in Parliament that “the loss of further UK refining capability may pose a risk to security of energy supply as a result of increasing dependence on imports”.
Into this fragile situation bursts the Petrol Panic of September 2021. Rumours of petrol stations running out began to circulate on Friday 24th September. Anxiety spread across the UK, and the North West and North Wales provided a perfect regional exemplar of the national problem. At 7.00 am on the Saturday police were dealing with drivers illegally queuing on the highway as they waited to refuel at Morrison’s in Nantwich, 25 miles from Stanlow. On the same day queues formed outside petrol stations from Llandudno to Liverpool. Two days later retailers from Bangor to Bolton were imposing a £30 fuel limit.
The threat of economic seizure across the North West and North Wales due to a constraint of the flow of oil echoes the national Farmers for Action refinery blockade of 2000, which began at Stanlow on Friday 8th September. Then, as now, the issue was not that there was not enough fuel in the UK for the oil to keep flowing, but who controlled that flow. In 2000 the lorry drivers were protesting against petroleum tax which looked set to push petrol over £4.00 a gallon.
Shell, at that time the owner of Stanlow, knew well the experience of truck drivers blockading the refinery, for – as with other corporations such as BP – they had gone through truckers blockades at their plants in France over the previous month. The oil companies could see that it was in their interests not to demand that the police clear protestors at their gates. Indeed all of the companies – whatever the size of the protests outside their gates, however aggressive or meek, however much pressure to supply – came out with a remarkably uniform response: “We are concerned for the safety of our drivers.” At the time there were nine refineries, rather than the six we have today.
After four days of blockades and mounting panic across Britain, on Tuesday 12th September Tony Blair personally contacted oil company chief executives, ordering them to restart supplies, which they didn’t. The following day, the prime minister called company executives into No 10, this time pleading with them. After the Wednesday meeting, the companies’ made a public statement but action was far weaker than Blair had demanded. However on that Wednesday morning Farmers for Action ceased their blockade at Stanlow, and protests across the UK soon followed suit. Finally supplies were restarted under police escort on the morning of Thursday 14th September.
The damage to the government had been done. Alistair Campbell diaries on the events noted: “TB said at one point that if this was Thatcher and the miners, the police would waste no time wading in. We were just pussyfooting with small groups of people threatening to bring the country to a standstill” and “We weren’t far off a crisis in the basic infrastructure of the nation.” Campbell reflected: “The word crisis is the most overused in the media lexicon. In 10 years with Tony Blair, I think I witnessed five full blown crises – Iraq, Kosovo, September 11, fuel protests and foot and mouth disease.” His point illustrates the fragility of the system. In just four days a disruption of the oil flow can create an event that passes Campbell’s test of a ‘political crisis’. A similar event took place this September 2021, illustrating once again our dependence on the constancy of fuel provision.
After the blockades of 2000, Greg Muttitt and myself wrote a piece in The Guardian exploring why the oil companies had been so reluctant to push for the blockades to be broken. Our conclusion was that it suited the corporations to have the government reminded of just how vital the industry is for political stability. And that they used this reminder to pressure the Blair government to accede on tax issues that concerned them. In particular to defend the terms of the Petroleum Revenue Tax on North Sea offshore oil fields that had been granted by Chancellor Nigel Lawson back in 1993. They used it to maintain the status quo that made the UK’s North Sea the world’s second cheapest oil-producing region after Ireland.
On the 26th September, in the midst of the Petrol Panic of 2021, The Times revealed, that a dispute between Essar and the HM Revenue and Customs on an outstanding VAT bill of £223 million threatened to close Stanlow. Here was an issue that had been rumbling in the background for at least a year.
It seems that the Petrol Panic emphasised just how strategically vital Stanlow is to the government, and in the midst of it Essar was pressuring the UK Government to give it more favourable taxation terms. Two days later Reuters reported that HMRC had ‘thrown Essar a lifeline’ allowing the company to extend a deadline of tax repayment.
Twenty-one years after observing how BP and Shell had utilised the blockades to make their case with the government over tax issues, it appears that Essar may have been using a similar playbook.
There is the Panic … and then there’s the question of who can use the panic to their own ends. Who can squeeze the flow of oil into the bloodstream in order to generate profit on capital or political power.
Thanks to Rob Noyes, Terry Macalister, Greg Muttitt, Ben Lennon, Gavin Bridge & the Fraying Ties? team.