Ineos's press releases page is a pretty sorry piece of work. If you listen to their statements on TV news they are portraying themselves as conciliatory and willing to move. A quick glance at the press releases they have issued in the dispute thus far shows that they're big on talking up the consequences of the dispute:

* "Strike action threatens safety at Grangemouth site"
* "Union action at Grangemouth threatens investment and Jobs"
* "Unite union rush to strike could mean no fuel in Scotland for at least a month"

It's clear that the company are using stories about fuel scarity to put pressure on the workers. Newspapers have happily obliged.


Who Are INEOS?
=============

Ineos are a petrochemicals company that bought the Grangemouth plant from BP's Innovene in 2005. Their principal interest in Grangemouth appears to be in Ethylene, a petrol byproduct used to make plastics, etc. They are not a fuel company but they appear to have a close relationship with BP. In January they bought another of their old petrochemical facilities, in Hull.

INEOS are a group of private companies across all different chemical groups, ultimately owned by one man, reclusive billionaire Jim Ratcliffe. You can read about him and his £2.3 billion fortune at number 25 in this year's Sunday Times Rich List.

It seems to be true that the Ethylene production facility at Grangemouth needs investment. One of the "crackers" failed unexpectedly on June 7, 2006 for around 3 weeks. The next year they announced that scheduled maintenance would over-run by 3 months. This downtime affects not only the production of ethylene, but all of the "downstream" products that it is used to make.


INEOS' Hidden Agenda
=================

Investment at Grangemouth must happen for the plant to remain safe. The two units that have been failing process up to 725,000 tonnes of explosive ethylene per year. The company is obliged to keep these up to scratch. The price of petrochemicals will rise further in the future; they are linked to oil prices and high-quality crude (i.e. not your heavy tar-sand stuff) is required to make the chemical.

The price of ethylene will continue to rise along with oil, and companies will pay the extra, as it is essential to many much-used products. It seems unlikely that INEOS would close Grangemouth, unless they wanted to further restrict supply (and raise the price) of the commodity. Its position at the end of the Forties pipeline means that it will be there at least as long as North Sea Oil: you refine oil to make petrol and byproducts.

The threat to close Grangemouth has been made well before this dispute. Two years ago another Ineos company handed unions an ultimatum: abandon the National Agreement for the Engineering and Construction Industry (NAECI), or we stop investing in the UK.

The credit crunch hurt Ineos's ability to raise the cash they must invest, so like so many other companies they are going after their pension obligations.

Attacks on the union seem to have taken them slightly aback and have included a threat of being sued for defamation. As oil supplies continue to dwindle, companies like Ineos will become more and more powerful. It seems strange that the government is happy for such control to rest in the hands of one man. It's perhaps less strange that they are happy to sit back and let an assertive union take the flak for a dispute apparently orchestrated and planned in advance by a company with its hands on the country's energy supply.


Footnotes
========
Ineos press releases:
 http://www.ineos.com/new_pre.php

This story has been put together using chemical industry reports / news-stories that aren't freely available / easily linkable online. One is below.

Ineos: modify agreement or we invest outside the UKHilde Ovrebekk, Simon Robinson. ICIS Chemical Business. London: Jul 10-16, 2006. Vol. 1, Iss. 27; pg. 10

Abstract (Summary)

Ineos Chlor's chief executive, Chris Tane, says the Ineos group wants to reach a new agreement with UK unions over working conditions and productivity. If this does not happen by the end of the year, it will stop investing in the UK. Ineos has the National Agreement for the Engineering and Construction Industry (NAECI) in its sights. Ineos says productivity from the firms it employs in the UK is up to 50% lower than contractors in the US, but has been unable to elaborate on this comparison.