Submissions invited on British refinery industry decline

19 April 2013
By Edd Gent
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The Energy and Climate Change Committee has invited submissions on the implications of refinery closures in the UK

The Energy and Climate Change Committee has invited submissions on the implications of refinery closures in the UK

MPs will examine the decline of Britain's refining industry and its potential implications on the security of energy supplies.

High costs, foreign competition and declining margins have led in recent years to a dramatic consolidation in Europe's refining industry, which today counts around 130 plants and just seven refineries remain in Britain after Coryton in Essex closed last year.

The Energy and Climate Change Committee has invited short submissions of evidence from industry players and observers about the potential energy security implications of refinery closures, to identify witnesses for a future oral evidence session.

The call for feedback comes as Murco has been unable to find a buyer for its Milford Haven plant in Wales, which some industry observers say is likely to face closure.

It also follows the first meeting of the Forum for EU Refining last Friday to discuss the situation in the industry, which covered topics including competitive pressure now felt from Russia and US unconventional energy.

The Petit Couronne refinery in northern France was the latest European refinery to shut down after a court rejected two takeover offers for the 84-year-old 162,000 barrels per day plant on Tuesday.

The questions the committee would like submissions on are:

1. What are the factors that have lead to closures of UK refineries? Why is production increasing overseas?

2. What impact (if any) has UK and EU regulation had on the UK refining industry?

3. What part will refined oil products play in the UK’s energy requirements and transport in particular to 2030 and beyond?  What mix of products is likely to be required and how well does this match with current UK refining capacity?

4. What is considered to be the right balance between oil products refined locally and imports and what are the current and future scenarios?

5. What are the factors, both domestic and international, that will determine the future viability of the UK refining industry?

6. What impact would the closure of UK refineries have on (a) energy supply security (b) environmental objectives and (c) the price of petroleum products in the UK?

7. What would be an appropriate baseline level of refining capacity in order for the UK to remain broadly self-reliant in an emergency?

8. What steps could the UK Government take to maintain an appropriate baseline level of refining capacity?

9. What is the significance and potential future impact of the changing ownership of UK refineries in recent years?

The deadline for responses to the UK parliamentary investigation is May 20, while the next meeting of the Forum for EU refining is in the autumn of 2013.

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