This is the new world order, now that maximizing profit is the number one goal, and no one cares a whole lot about details like reliability. We have broken off parts of pieces of big companies, and sold the pieces (with lots of leverage) to much less financially strong companies. I understand that this has also happened to quite a few electric utilities in the United States - another place where we really need reliability. We have created a much more complex system, with less reliable parts, and a greater chance of system failure.

Why did BP sell the Forties oil field?

Production falling.

Why did BP sell Grangemouth refinery?

No oil, no refinery needed.

Why did BP not ensure that they retain operational control over the Forties pipeline system?

Wealth losing proposition from here on out.

Why were banks so keen to lend such large amounts of money to buy assets that world beating companies no longer required?

A Sovereign wealth fund and/or hedge fund/Synthetic Investment
Vehicle to leverage out debt as far as possible into the future
while taking all/as much "real" wealth out ASAP.

Why is the Ineos pension fund under strain?

Because all wealth is being drained into the Queen's Offshore Tax Havens and other Top .01% positions. Pensions are being underfunded across the board.

G7 countries are looking to crush labor across the board.

This is only the start.

Clive Maund almost gets it (MI-6?):

http://www.safehaven.com/article-10087.htm

"As we entered this unique century, the greatest economic and military power in the world, the United States, still basking in the glory of facing down and defeating the Soviet Union, had the choice of getting together with the other nations of the world and arriving at a common and equitable agreement regarding how to apportion and parcel out the world's dwindling fossil fuel energy supplies in the coming decades. Instead of taking this enlightened route it has decided instead to adopt the primitive "me first" approach and has embarked on an old-fashioned campaign of colonial conquest, with a few sycophants in tow such as Britain hoping to get "a piece of the action". This is, of course, very bad news for the planet, not just because of the colonial powers' plans to make off with most of the pie, but because of the vast misuse of resources required to secure a disproportionate share of the pie in the first place, which has involved considerable death and destruction, including a lot of Iraqi civilians and US servicemen."

Complete control of the Mid-East, which the United States and the major oil companies are now close to having achieved, of course confers massive power over the rest of world, in particular over rising economic powers such as China and India and the immense leverage that this will in time afford can be used to steer these countries in whatever direction is desired. The US is believed to be involved in a strategic race against time to corner the bulk of the world's remaining oil reserves, the control of which can then be used to dissuade countries like China from resorting to the wholesale dumping of dollars or US Treasuries, along the lines of "Try it and we'll cut off your oil supply", which one would expect to be couched in more diplomatic language. Because of its gargantuan levels of debt the US is acutely vulnerable now, but with time it plans to tip the scales back in its favor partly by sales of its recently acquired plunder."

Britain, as the 1st officer of the US in its wars of acquisition, will enjoy a privileged place at the table in an increasingly resource starved world. Israel will look on with quiet satisfaction at all of this."

The worker in all of this will be crushed.

There is no polite way to get the attention of the Queen and her minions.

Note that the workers here aren't demanding anything more, they're striking to keep what they have. That's where we are.

TPTB have to start taking away to keep increasing their wealth.

Good luck to us all.

James

PS-"A two day strike over the protection of workers pensions does not seem unreasonable action to take."

Watch law enforcement/military. Whose side they come in on.

Like during Thatcher's Coal Strike, I don't think it'll
be on labor's side.

What should the UK energy policy be?

This action may be a good wakeup call to the UK. I can only hope that the press talks about the UK's energy dependence, and the reality of the situation - continued depletion of the North Sea, and situations like this (hoarding and other supply issues) happening without a strike.

Mini crisis's like this that really have little effect in the grand scheme of things, and allow people to understand the seriousness of the near future's energy issues can be used to the nation's advantage helping advance beneficial reforms. .

Obviously the system shutting down is disruptive, but it's not like the oil and gas had to be poured into the sea - it can and will be sold.

I only hope this doesn't muddle Peak Oil issues with the addition of Labour Unions (on top of Nationalist Oil Companies, rebels, and speculators).

There it is kiddies. The failure of a tightly linked complex dynamical system.

Welcome to Chaos.

I've been waiting for this for decades.

We should throw a party.

• Why did BP sell the Forties oil field?
• Why did BP sell Grangemouth refinery?
• Why did BP not ensure that they retain operational control over the Forties pipeline system?
• Why were banks so keen to lend such large amounts of money to buy assets that world beating companies no longer required?
• Why is the Ineos pension fund under strain?

Your answers to 1, 2, and 3 are the same. Increase short term profits from the cash cow, and make any reliability concerns somebody else's problem, including any investment in backup. If their customers complain claim force majeure and blame Ineos.

The answer to 4 is that the banks made a shitpile of money on their cut of deals like that. And no matter what happens they get to keep the fees.

I'm not sure we know positively yet that the fund is under stress.

Why did BP sell?

Because BP knew that

one day, in the not too distant future, [the plant would ] be forced to close owing to a lack of feedstock (think about why BP sold it in the first place). Think about that and your future pension.

Yes, think about the future pensions. The sale was likely fraudulent - intended to dump the future costs. That's the sort of thing all these divestitures are about. Ineos and BP better hope the workers don't get even more uppity. I wonder how far we are from these workers - who will understand they have been cheated with no hope of regaining lost promises - start taking revenge and begin destroying the plants. From when airline workers, auto industry workers - anyone who has been ripped off by the finance industry - start taking revenge. As long as they keep getting their long-promised share they will stay quiet and settle for the two-tier system, but when they lose their privilege, all hell will break loose.

cfm in Gray, ME

By all means do all you can to damage the financial viability and reputation of your employer upon which your livelihood depends but try not to let this spill over into the wider community.

It's this sort of thing which belongs more in the comment section than a TOD article. Opinions and grizzling we can manage ourselves, we come here for facts, bombproof reasoning and reasonable surmise.

If a strike can have effects on the wider community, the strikers have a stronger motivation to do it. If only its money is on the line, a company might wait out the strikers over months; if the wider community is harmed, they'll put pressure on the company to resolve the strike issue quickly.

So we can have a small effect over a long time, or a big effect over a short time. That's the way strikes work.

Several points of reflection come about:

First of all, the present situation is a good example of unbundling schemes going wrong. State Companies (or state dimension private companies) that once had geographic bound monopolies are sliced and diced to private firms. And only when the damage is done someone realizes that the business isn't profitable.

But of course it isn't. It can't be, petrol and diesel are not differentiable products and so these markets like Refining will always tend to profitless perfect concurrency. Electricity also isn't differentiable.

I find every stakeholder in this plot accountable, they all lack the capacity to think and plan in the long term. BP never thought of the dependencies that make the Pipeline run, Ineos was made buying dying businesses, the workers don't understand the North Sea decline, governments just watched the crisis unfold and of course none of this is interesting enough for the media.

It is a much broader failure, it is an extensive social fabric laid down in ways that do not cope with long term change, predicting the short term future by projecting the past.

I believe this is just the first of a succession of similar crisis. This strike will unlike do any good for the pension scheme; it is over, it was something that worked in the past but can't possibly work in the same way in the future. The clash between owner and workers will exacerbate until some retrocession takes place like Grangemouth coming back to BP's hands or even being nationalized.

I don't think tight coupling here is necessarily the only reason for system failures like this, BUT when it is combined with increasing complexity, distributed responsibility, very tight margins of operation, and almost zero buffer/overstock capacity... well, this is what happens in systems.

We have become so optimized, so lean, so JOT/JIT, so zero-inventory that even small perturbations can easily cascade down the chain.

And it doesn't help, if one or several of the value chain actors start rigging the system in zero-sum fashion causing significant losses to other parties.

This can only result in loss of confidence, trust and visibility down the chain. This is utter poison for any multi-component value chain/network.

And it wouldn't be any more 'better' if the system was loosely coupled, because every actor, every component in the chain, is becoming equally tight/zero-inventory/JIT/lean.

It doesn't really help to change one piece of the value chain to another, when all parts 'malfunction' the same way from the overall total system perspective.

There is very little margin for error.

And don't for a minute think it's going to get any better, before it gets worse.

Once the European electricity market de-regulation finally heats up, peculators will come in like vultures 'Enron-style' and try to leverage profits with very little regard to how it affects prices, stability, overall reliability or systemic risk.

But like the Americans say: "Don't hate the player, hate the game."

We get what we deserve :)

One of the first acts of Gordon Brown as Chancellor was an attack on pensions by removing the tax relief despite being warned by officials that he risked long term damage to the UK's occupational pensions industry when he pressed ahead with a £5bn a year cut in tax relief in his first budget in 1997.

This made funding pensions even harder and is one of the major reasons for the decline in final salary pensions in the UK.

• Why did BP sell the Forties oil field?
They calculated that their profits would increase by so doing.

• Why did BP sell Grangemouth refinery?
They calculated that their profits would increase by so doing.

• Why did BP not ensure that they retain operational control over the Forties pipeline system?
They calculated that their profits on balance would not be affected or would increase by so doing.

• Why were banks so keen to lend such large amounts of money to buy assets that world beating companies no longer required?
They calculated that their profits would increase by so doing.

• Why is the Ineos pension fund under strain?
Not very clued up on that one?

A few things:

• Instead of sourcing apples from our indigenous orchards, we source them from halfway around the world.
• Instead of delivering milk bottles to homes, then returning, and refilling as we used to, we now use plastic ones which are then discarded into landfill.
• In the 1970s, drinks manufactures (Coke, Fanta, Lucozade, 7Up etc) offered refunds on their bottles so that kids like me scavenged them all off the beach and returned to the shops for extra pocket money. They were then returned to the bottler for refilling. Now these are plastic and when used are buried in landfill.
• Instead of pubs returning their empties for refill to the bottlers as of old, they're smashed up, melted down and remade into identical bottles and then filled and sent to the pubs.
• Instead of appliances which can be repaired, it's cheaper to bury said item in landfill and buy a new one.
• Instead of replacing a car headlamp bulb you now replace the entire sealed unit headlamp. The old headlamp assembly being buried in landfill.
• The Hoverspeed Dover-Calais hovercraft was not withdrawn from service because it was losing money, but because it was not making enough profit.

It seems Euan, that you are trying to answer these questions using good old common sense which in our insane world is unlikely to give you the answers you seek. Much business activity flies in the face of any reason, unless you look at profit maximisation and that will answer pretty much all your questions IMHO.

"Of course we cannot blame the main stream media for their ignorance."

Why not, Euan? Discovering and disseminating vital truths is what they purport -- and fail so chronically -- to do. But then, despite all their self-congratulatory blether, that's not what they're really here to do, so no surprises that they don't do it. Not to go on at length about this, can I just recommend for those who want an unparalleled (IMO) insight into media function in Western 'democracies' study in depth of Herman and Chomsky's 'Manufacturing Consent'; twenty years old, and as sharply pertinent as ever to the real world behind the Permanent Bullsith Blizzard. If you haven't already, get your ideas straight about what media in Western 'democracies' are really for.

I too come to TOD for the density of facts and professionally-competent insight. It seems to me to be one of the best places on the net for that. Because I can't match the excellent technical skills and knowledge of many contributors, I'm content -- indeed obliged -- just to read silently and keep my lip buttoned, mostly.

But it does seem to me that low political savvy is more patchy at TOD, sometimes. One of the background understandings that still appears a little light amongst seasoned TODers is the crucial real position of the US in all this.

As mentioned again in this comment thread, the attempt by USukisoz, with a few smaller hangers-on, to grab decisive control of the Caspian-Hormuz sweetoil corridor, and so to grab the world by the balls, seems well enough understood by TODers. (What awake grown-up who's paying attention doesn't understand that?) But the chance of the malign axis actually pulling off its huge crime against humanity 'successfully' -- from the viewpoint of the criminals in charge -- still seems to me to be greatly over-estimated. My guestimate, for what it's worth, is that the aggressions in SW Asia are failing, will fail totally, and in the process will precipitate the US into its turn to go down the black hole that swallowed the SU. (They were always going to do that, both of them. I don't believe any other outcome was ever likely. It's just that the SU went first, and -- as history may well show -- had a much lighter landing than the US)

Here in the execrable fake 'democracy' of Britain we suffer successive governments of breathtaking incompetence in anything except faithful service to their true masters, who I suppose can be described in a few words as the deeply-criminal, special-interest-minority WealthPowerStatus-mafias whom we silly commoners allow to control such a disproportionate share of wealth in the world. Because of this, our public services and our public properties have been looted, vandalised, smashed into thievable bits, and largely sold -- or more nearly, given at silly token prices -- by successive gangs of expendable pocket-politicians of one wing or other of the single bigbiz party to their real WPS-mafia owners. (Always without anything remotely like popular mandate, natch) And still, whilst we geese watch confusedly, these gangsters continue to suck out and salt away the last dregs of loot that they can get out out of our commonwealths before widespread collapse changes the game drastically.

The all-important perception-managing hacks of the corporate media, who keep us common shlubs (and themselves, mostly) confused, distracted and supremely ill-informed, are a key part of this mafia racket.

I haven't been a red revolutionary since my distant teens (to much blood, anguish and destruction for too little real result). But soberly, I suspect that nothing less is going to alter this lamentable situation, here and globally, and give us some chance of weathering the synergising crises of the global perfect storm. But for any kind of revolution, whether violent or velvet, it's necessary for enough people to wake up from the continuous sleepwalking state in which the Pampered Twenty Percent of the world's humans live currently. TODers know that a very rude awakening is imminent now, as bread, circuses and continuous bauble-dreaming all evaporate. So, any chance of a TOD-vote about when widespread civil disturbances, including the recent sleepwalkers of the over-rich countries, will begin? Who of us a year ago would have voted confidently for widespread, government-panicking food-riots in the Spring of '08?

Who is to blame?

The British government, for bloody-minded refusal to shoulder their responsibility for strategic thinking.

To put a name on it : the emetic Tony Bleeeeagh.

The hapless Golden Brown (reminds me of the Stranglers song : never a frown, Gordon Brown) turns out to be nothing but a talentless understudy. I once hoped for better things from him.

The failure of the remnants of the North Sea bonanza is something of a sideshow. As a sunset industry, I don't think it's such a big deal to have privatized it. It is not an ongoing strategic asset like, say, the railways or the water industry.

The failure to take any steps, or even plan coherently, for the UK's energy security and trade balance are the big picture. If they manage to bring enough nuclear electricity on line quickly enough, then collapse can be avoided. Even then, one assumes that the trade balance will suffer, since the profits will largely be shipped back to France (EDF and associates). This is logical enough : the UK no longer controls the nuclear technology they need.

Just as the UK's "independent nuclear deterrent" depends on Uncle Sam, the UK's "energy independence" will be in French hands. Count on future UK governments being strikingly more pro-European.

My rational mind knows that there is almost certainly no connection between this and the 5-hour power cut I experienced in my Edinburgh tenement block last night (it was much too localised), but boy did it freak me out. How's that for a coincidence - the first major power outage I've ever experienced in 15 years of living in Edinburgh, and it's on the day they shut down the Forties pipeline. What are the odds?

Is this a taste of the future?

This from the Scottish Daily Record.

Crisis Threat To 100 Construction Jobs

More than 100 construction workers face the dole after the fuel crisis brought their projects to a halt.

The drivers for Glasgow based AB2000 were grounded at the new wind farm at Fenwick Moor, Ayrshire, on Thursday after contractors Morrison were unable to find more diesel.

...Ted Reilly, of AB2000, said: "We have 70-odd vehicles stuck there because we are hiring men and vehicles to a contractor which can't supply diesel. That situation can't go on any longer. Our fear is that we might have to pay men off soon because these people can't get their act together."

A wind-farm construction project brought to a standstill because of a lack of fossil fuel. I hope the powers that be are taking note...

This is just the beginning.

As energy prices rise and the economy falters, anyone with any influence will attempt to engineer pay rises etc in order to maintain their standard of living.

A refinery here, a teachers strike there ... on top of a meta-stable energy-deficient system ... could well lead to all sorts of complex failures.

At the very best, those with control of the oil, gas, water or other key systems will be Kings Of The Castle. Those without influence will be hungry, cold and maybe unemployed.

At the worst, we might see earlier than expected infrastructure failures caused by multiple interacting selfish (?) and short sighted actions.

As oil and natural gas decline we will need to husband all aspects of our infrastructure in order to avoid sliding into The Abyss.

Sadly I anticipate many further petty strikes, together with copper cable thefts and other scavenging by the new poor, to bring our infrastructure to an ignominious halt, possibly quite rapidly.

This Grangemouth affair has been an eye-opener for me: I now realise that I cannot trust The System to be there for me & my family 'forever'. One day the lights will NOT come on when I flick the switch. One day the petrol station will be out of fuel ... and will stay out of fuel for days or even weeks.

I hate to sound like a nutty US survivalist .. but it does suddenly seem wise to install solar electricity, stockpile some fuel and maybe buy a generator as a matter of (almost) urgency.

Its hard to put into words, so forgive me if I make a mess of it, but I think the situation is as follows:

The only thing that has perceived value is money or activities that make money. Suppose a community has a farm that is loosing money but never the less, for the time being at least, the farm feeds the community. The community has a local bank that is making money. The the bank pulls the plug and the farmer decides he can go on no longer and sells his land to a local devloper who is able build houses on the land. The farmer has made a quick fortune and paid of his debts to the bank, and does not care that he no longer produces food. The developer will make a fortune building houses, the food will come from "some one else", the community now has a profitable bank and a profitable constuction site and is relieved of its loss making food supply. The irony is Food has no value if it can't be produced at a profit! The same goes for oil supply and infrastructure of the uk. If the farmer had any sense he would have sold while he was still making a profit and let the next person suffer the loss.
I suspect Ratcliffe has no liabilities. The money the banks has chosen to lend him will be from our pension funds etc. The loosers are the workers who built the infrastructure in the first place. The only way to have avoided such a mass asset stripping exercise would be for the workers to own the company shares and have hung on to them. I suspect most workers would sooner sell shares for a quick lump sum as did most who got shares when the building societies were turned into banks

The problem; human greed and complete inability to see further than our next meal (especially politicians). We are all guilty to some extent (wanting more "highly vauable" money for "less valuable" hard work).

Sorry I'm a doomer!

Say the pipeline was restarted. there were half a dozen articles on the shutdown. Should there not be an article about the restart ?

Of course it is visible in terms of the price drop per barrel of oil

http://www.bloomberg.com/apps/news?pid=20601086&sid=aRoaiNYSN6kY&refer=l...