Pumping Out the Profits

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IN ten years time workers may well look back on the Thatcher government and say - 'Whatever happened to all that money from North Sea Oil?"

At first. heralded as the saviour to halt Britain's economic decline, North Sea Oil has simply become a monumental slush fund into which the snouts of the international financiers have been plunged at will in order to pay for the relocation of factories and refineries from "highwage" Britain to the underdeveloped parts of the globe.

For whilst North Sea Oil alone refinery closures has been undergoing a phenomenal boom, making have taken place at Ellesthe UK self sufficient in mere Port (Burmah oil and exporting 60% of production to the USA, of Grain (BP - 1700 down Britain's petro-chemical the road): and just recently refining industry has been ICI, after already closing starving to death from five chemical plants, issued chronic shortages of naphtha and ethane, which giant Wilton refinery on are the basic feedstocks for Teeside (1000 jobs lost). producing chemicals and plastics and that are the Shellhaven site to a derived from crude oil. veritable graveyard, Shell 1979: US petroleum profits were a major scandal in the wake of Carter's "fuel crisis"

ARCO AMOCO Gulf 16* 20 3.8 $393.3 In the last six months (UK) are saying that 2000 jobs may well have to go at the massive Carrington complex in Manchester. 100 jobs gone), the Isle Why is this happening when Britain has more oil than it knows what to do Ray Attwell, a former death warrant for. the leading TGWU member at the AKSO Chemic site in Rochdale summed it up Similarly, after reducing well:

'It's like having massive blood bank packed to the ceiling with reserves, and then having scores of people down the road dying from lack of blood transfusions. But there's a sicker side to the story than this. "Imagine the ambulance drivers who deliver the blood nipping off to the States and flogging the merchandise on the cheap.

This is what is going on in the oil and chemical industry. •'Thatcher is so much of a patriot that the profits from North Sea oil are not even ending up in British gaffers' pockets. No, Thatcher is well in with Reagan and the Yanks are crafty.

War ' 'They are buying 60% of our oil and are storing it as a 'strategic reserve' in dried up wells in the USA in the eventuality of a new war. 'While British workers extract the oil from the North Sea, the American workers are putting it back into the ground again. If that doesn't sum up the absurdity of the system we've got then I don't know what does.' Thatcher's monetarist strategy does not provide an economic framework for the regeneration of British capital. Of course the Tories' project entails the breaking up of the strength of organised labour, but it is not the case that the practical measures. the government have taken have girded UK capital for effective competition against its overseas competitors.

On the contrary. the Noel Hibbert asks: where is all the money from North Sea Oil going to?

$1,145 $595 government have placed their own social class in an increasingly. subordinate position in relation to international capital.

We say this not to lay the groundwork for arguing for the reflation of British capitalism through the autarchic policy of import controls initiated by a Left Labour Government. Just the opposite, in fact, we are making two major strategic points.

Firstly that Thatcher's orientation - even if it did succeed in breaking the back of working class resistence - would stand no chance of reclaiming the old glories for UK capital precisely because its policy strengthens the BonnNew York-Tokyo axis over which UK capital has marginal influence.

And secondly, we are maintaining that only a workers' government.committed to a policy of a fundamental transformation of class forces in society and linked to an internationalist perspective could stand any chance of reversing Britain's historic, economic and social decline: propelled as such a government would or himater, une Tories' be, by a mass mobilisation of human resources.

handling of the North Sea oil and petro-chemical industries is a classic example of them giving primacy to toreign capital. Indeed the cancer of "privatisation" has now spread well beyond the arena of Tory councils selling council houses - right into Britain's economic heartlands.

Consider the following:

*By deliberately forcing down the value of the pound against the dollar, and recognising that all oil is traded in US greenback dollars, Thatcher's Surrey based businessmen have been forced to pay higher sterling prices for oil. This is a major factor that has made it more profitable for the hosses to export North Sea crude rather than seek to refine it in the UK.

*Ri denationalising the Britch 4 cheat ON Corpor$247.1 $366.2 $612.2 ation (BNOC) the Tories have opened up the UK's colossal oil and gas reserves not 'to the laws of the market" but to the massed formations of bank- had the desired result. ing consortiums emanating from the leading capitalist metropolises, who will doubtless gobble up the ownership and control of the oil reserves to further stabilise the rexisting division of capital in the West.

*By refusing to build the gas gathering pipeline, and hence make the UK Scotland. self-sufficient in gas, the monetarists have made the economy even more dependent on overseas purchases. It is estimated that the UK economy lost £500 million last year because of the refusal to pipe North Sea gas ashore.

And even more absurd- the UK ly, there is substantial evidence that multinationals may well pipe the gas ted, and the off elsewhere.

Significantly, the reasons for ICI, the UK's largest manufacturer, closing the Wilton plant on Teesside, is a direct product of the government's connivance with overseas multinationals (in this case Shell and Esso) in refusing to build the gas pipeline. unionised plants abroad The latter would have been ICI's only mass source of cheap Ethane, a necessary feedstock for GRENGLEN ru MN/DEi S ra) day this will all he von randehildren's and you 200% 175% 150%| demand for oil-based pro125% ducts. Demand for petrom100% chemical commodities fell by 10% between 1973 and 75%* 1980 whilst petrol consumption increased. Last 50% year, consumption was 25% 3 £13.4 million barrels a day, and though no great expansion of demand is expected in Europe, the industrialisChange ation drives predicted for from 1978 the Third World during the latter eighties certainly offer the prospect of recovery.

These developments have also been compounded by changes in the pattern of demand for oil products away from the heavier end of the barrel (fuel and gas) towards the chemical production, but lighter crude oil (e.g. North the fact that Shell and Esso Sea oil) that is, ironically, spent money "persuading"

the staple diet of most UK the government not to build refineries. Such events the pipeline eventually though, have not stopped Britain moving into fourth Now ICI will be squeezed position in the world oil out of its last remaining producers' league. domestic markets, with a consequent escalation in redundancies. Needless Cheaper to say, Shell and Esso have their own private gas pipeline from the Brent Field Moreover, UK based that thatne into Essos price international companies like Shell Chemicals are new Mossmorran plant in selling the same commodities cheaper abroad ICI's only serious than in the UK. Take chance competition automotive diesel products, would have came from the they sell as follows: Gas Gathering Pipeline. West Germany - £144 B patri tie to one core: per metric tonne. supported Esso and Shell's core per metric tonne. Netherlands £149 DONCV. thu accelerauna United Kingdom -the outflow of capital from per metric tonne.

Instead of being sold In 1980 nearly 50% of considerably cheaper here, North Sea oil was expor- this oil is extracted from UK fields then moved to Arough Uk relinernes put Europe for refining then re-imported to Britain at nas fallen from 57% in 1977 to pre-fixed prices. With the 49% last year and to full support of the governpaltry 45% in the first six ment of course! months of 1982. Thus Similarly, gas and oil is instead of creating jobs in also being • sold cheaper UK refineries, the bosses overseas too. have redirected North Sea West Germany - £149 cruce mo 'low cost' non- per metric tonne.

Netherlands £152 dmittedly the recessi per metric tonne:

as combined with the UK - £171 per price increases of 1973 tonne. and 1978 to depress the The Tories would main(40C PAIÚc* 4Y KAL DANGE NUCLEAR CAR MASTE and your at-great-grandchildren's...

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Socialist Organiser no.91 July 1 1983 Pare 13 'Well, they told us they'd do more drilling afte assemble at the cheapest Close then why does the U companies are also conscious company), whom are Tormer oncia complex? gence Agency and sending cost of £760 million on Tommy Hart AKSO prices went up' tain that 'unit costs of production' cheaper abroad than in the ÜK therefore "capital will phe place mich the lowest with cue lowest vages. But this argument is not strictly true. Indeed if the Tories were right goliath AMOCO la cost from there to reurope A similar argument was used by Shell when stating a £44.4 million loss for their Manchester refinery, with a possible 2,000 jobs jeopardy. interesting ly, this company mention that they have just begun construction new North Sea oilfield, and that they estimate it will take only 1.8 years for the company to recoup its original outlay.

Royal Dutch Shell, the second largest oil conglomerate in the world, have a reputation : for doubledealing and trickery. In 1975 they approached the EEC and Labour Chancellor Denis Healey, with a proposition: "Why not give some of the UK oilfields to the EEC in exchange for cuts in Britain's contribution to the Community budget and changes in the Common Agricultural Policy?"

They also proposed closing eight refineries, two of them in the UK, and it was only after a massive campaign of opposition by petro-chemical workers, particularly TGWU and ASTMS members with the late intervention of then The Stock Exchange gets nergy Minister Benn that th le "project" was scupper1. Their scheme of course as simple - rip the guts ut of the UK petroremicals sector and relocoun e uI t! afE ArMATTITOT PARAAM free 70te.

The oil giants also have a close relationship with the CIA: 'Chemical Weekly" (2/2/81) stated "Chemical hiring specialists some of the US State Departuned Central Intellithem abroad on 'fact finding' missions". Dow Chemicals, a. US multinational, had its fingers in the moves initiated in Chile in 1973 by assassinate President Allende.

Labour Party member and TGWU senior steward Chemie. punctured company's strategy: the profits (above), while we ge "If you starve any organism of its basic nutrients then obviously it is going to put in an under par performance. In reality, there are a lot of con-men and fat profiteers in New York and Bonn benefiting from our misfortune.

•Furthermore, the government and the multinationals cannot use the Steel or British Leyland, for justifying mass redun chemical industry.", petro- dancies in the Indeed the industry is extremely profitable. Government figures for 1980 show that profits, interest and dividends on North Sea oil which were due to go abroad amounted to £2.3 billion. This was equivalent to the same amount as the government"s entire tax return from North Sea oil.

Moreover, government revenues from North Sea oil in current prices in 1981-82 are now expected to be £6,430 million, more than £500 million more than expected. Even more, the contribution of oil and gas reserves to the country's Gross National Product is expected to increase by leaps and bounds over the next few years from £13¾ billion this year, to £14½ billion next year, £17½ billion in 1984 and £20 billion in 1985.

Only a child would therefore believe the statements of the big oil producers that "falling profit margins" necessitate massive redundancies. In 1980 the 'seven sisters" -Exxon, Royal Dutch Shell, Mobil, BP, Texaco, Chevron and Gulf - were able the other by-products (below) to mass a combined net profit of $23.3 billion on a total turnover of almost $450 billion. This compares with combined earnings of $21.9 billion in 1979, which was regarded by economists as a bumper year.

These figures reduce to nonsense any notion that ine majur un cumpanes mnina nil ramnanioc are undergoing "severe financial difficulties" Though the rate of increase in profitability may have declined during the early 1980s nobody can deny that these multi-organisations wield astronomical capital resources.

The success they have achieved so far in closing oil terminals and refineries across Europe and the UK has flowed from complacency among the workforce and lapse shop floor organisation among the workforce induced by the "years of plenty" in the 1950s and 1960s when oil was sold for peanuts and petro-chemicals workers were part of the wage earning elite. now shan vual Petri begi imm of tl afool rank amol reve: haen into takir.

delej met May selve indu strut boss SiI the I OMERBLOCK. 'And then you get up on this owever the signs are there that radical Dro in tho air Bes are d VLAD o-chemical workers are nning to recognise the ense strategic power can wield in the lary energy industry he future. Moves are t to set up a national and file movement ng oil workers that can rse the massive norrhaging of profits bankers' coffers now ig place. national conference of gates from Shell plants in Manchester on 26 and committed themes to a campaign of strial action and ggle: against the es' closure plans. gnificantly, workers at Manchester site of Shell COMPANIES RICE BOLE OIL TAX INCREASES PROPOSED voted by an overwhelming majorities at a number of made mastingo on 10 Inne maso mitclugo vu du umir to mandate the stewards to initiate industrial action if the company were to proceed with redundancies.

The stewards at Shell have also taken the bull by the horns by calling • a national conference of delegates from all UK petrol chemical establishments to take place in the next six weeks, that will set about building a national movement to throw back the employers' offensive.

The struggle to build a viable shop floor organisation and political leadership in the plants to roll back the plans of the megaprofiteers is now beginning in earnest.

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