Socialist Worker

Oil industry: the hands on the tap

In the wake of the petrol panic, Simon Basketter looks at how restructuring of key industries has hit workers, but also given them more power

Issue No. 2298

The Grangemouth oil and gas refinery—where a strike can cut off petrol supplies to all of Scotland  (Pic: www.flickr.com/photos/tigerweet/flickr.com/tigerweet )

The Grangemouth oil and gas refinery—where a strike can cut off petrol supplies to all of Scotland (Pic: flickr.com/tigerweet)


The prospect of an oil tanker drivers’ strike threw the establishment into a tailspin.

While blustering about preparing for the miners’ strike, the Tories collapsed into “Carry On Up the Forecourt” farce. That they did tells us two important things.

The first is the power that workers have if they withdraw their labour. And the second is how the chaotic organisation of capitalism can strengthen our side’s ability to resist.

For over a decade, the drive in the oil industry has been towards cost cutting and outsourcing. Perhaps not surprisingly for an industry propped up by the motor industry, it has adopted its organising structure.

Techniques introduced across the global car industry in the 1980s are now seen as the basis for the structure of the oil and petrol industry.

Oil companies have used “just in time” methods to pare down their infrastructure. This has got to the point where slight disruptions in one area can affect the whole system.

Tanker drivers work 12 hour shifts, driving a 44 tonne vehicle which holds between 36,000 and 40,000 litres of petroleum.

They are not just delivering petrol—they are warehouses on the road. The oil companies plan on the basis of large amounts of the petrol being in transit at any one time. This means they need to store much less at the garages or the refineries.

It is a way of keeping costs down to keep profits up. The point is to increase the amount of profit the company gets out of each worker at each point in the production and distribution process.

It is about making people work harder and longer. And it is about cutting corners. This is why the tanker drivers have seen their terms and conditions repeatedly attacked.

But it is also why there is simply less fuel at the pumps than there is capacity in the fuel tanks on the road.

Strike

And it’s why a majority of the 2,000 members of the Unite union at seven distribution companies voted to strike. The Unite drivers account for 90 percent of workers supplying Britain’s petrol forecourts.

The “just in time” drive to cut costs has hit their pensions hard. In some cases they have had several different pension providers in ten years.

But it is also why there has been a genuine crisis for British capitalism over the issue. A strike could close up to 7,900 of Britain’s 8,700 petrol stations—and all its airports—within days.

The result of the strike ballot saw the government convene a meeting of its Cobra emergency committee to discuss how it would handle a strike.

That included options to use “a couple of hundred” military personnel to drive delivery tankers. There are reports that RAF drivers are being trained for tanker driving duty.

The actual extent of petrol reserves in Britain is a secret. Britain is the only EU country where this is the case. In France the reserve is about two weeks.

There is probably around 70 days’ stock of fuel in the country. But filling stations operate on around three days’ supply, based on normal sales.

Britain’s fuel delivery system dispenses about 90 million litres of fuel a day. But the capacity of all fuel tanks of all the vehicles on the road is 20 times that capacity.

When just in time production goes wrong, it goes badly wrong. If everyone fills up at the same time the system collapses.

After the Tories created a panic, garages reported selling three days’ worth of petrol in a few hours, so using up the reserve without workers even striking.

It is of course entirely predictable that the Tories then proceeded to lift restrictions on health and safety to increase deliveries.

But it’s not just the garages. Oil refineries are the hubs that provide the fuel. But they are also in crisis.

So the Ineos refinery at Grangemouth is the main supplier of fuel to Scotland and the north of England.

The plant powers the Forties pipeline, which is connected to the oil fields in the North Sea. If Grangemouth shuts down, all oil from the North Sea has to stop. Within days all petrol in Scotland dries up.

Electricians

It is one reason, though not the only one, why electricians beat off attacks on their conditions earlier this year when their strike looked likely to close Grangemouth.

The changes in the oil sector reflect a much broader trend across the whole economy in recent decades.

New technologies have made it possible to do the same jobs with fewer workers. And rather than see profits decline, bosses have cut corners on infrastructure wherever possible too.

This doesn’t always show up straight away—other than increasing the stress on the remaining workers. But it means that the slightest disruption can have a massive impact.

Problems in supermarket distribution chains can result in bare shelves within a few hours.

Hospitals that have cut down on the number of beds they use by passing patients through more quickly face the very real danger of severe shortages if there are major accidents or epidemics.

This restructuring has been driven by the needs of the bosses, and it has been accompanied by attacks on jobs, wages and working conditions. But paradoxically it has made strikes by workers all the more powerful.

It’s one of the clearest contemporary examples we have of Karl Marx’s observation that what capitalism “produces, above all, are its own grave-diggers”—the working class.


When drivers fought before

Tanker drivers have repeatedly shown up the fault lines in Britain’s dependence on oil.

So a memo by Labour prime minister James Callaghan’s private secretary, Ken Stowe, on 15 December 1978 warned that a strike by 8,500 tanker drivers at Esso, Texaco, BP and Shell would bring the country to a grinding halt. The drivers wanted £65 a week, an increase of 25 percent.

Some 9,000 soldiers were to be put on 72-hour standby to break the strike. They were to be used to drive 4,000 requisitioned petrol tankers. Socialist Worker broke the story of the secret plan on its front page.

Tony Benn was the energy secretary. He could mobilise the troops before Christmas so that the operation would be in place for the start of the strike, or delay and risk running out of petrol. But the plan was never implemented.

Within hours of strikes starting the employers caved in and awarded the drivers pay deals of around 15 percent.

In 2008 a four-day strike over pay by tanker drivers supplying Shell petrol stations showed the power that workers have to disrupt the normal running of the system.

Around 640 drivers in the Unite union struck at Hoyer UK and Suckling Transport—the two companies that Shell contracted to transport its petrol. Drivers from other companies refused to cross their picket lines.

Just last Monday drivers walked out at Grangemouth after 11 workers from Scottish Fuels were suspended for refusing to cross a picket line.


Energy in chaos

While the profits of the oil companies soar, the actual state of the industry is a mess. For instance, the Coryton fuel refinery, one of Britain’s largest, is on the verge of closure and is in administration.

Coryton accounts for 20 percent of petrol supplies to London and the south east. BP, which used to own Coryton and is one of its biggest customers, is now lending it cash while moving its operations elsewhere.

Coryton and Lindsey oil refinery in Humberside supply jet fuel to Heathrow Airport. If either stops production, flights stop going from Heathrow within 36 hours.

Other fuels are no less chaotic. In February Britain was four days away from running out of gas supplies.

Confusion and lack of planning has led to chaos. There is currently a push to build power plants. But no capitalist is sure which type to build.

For instance last month Npower and EON announced they would end their joint venture to build nuclear power plants in Britain.

The bosses are unsure where is the best bet to make a profit. The Tories’ determination to leave planning to the market makes this worse. But it also provides us with an opportunity.


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Features
Tue 10 Apr 2012, 18:20 BST
Issue No. 2298
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