FPS EXPO 2019
The UK supply chain
WITH THE IMPORTANCE OF A ROBUST UK SUPPLY CHAIN VITAL FOR THOSE SUPPLYING FUEL, THE FPS EXPO SEMINAR ON THIS
TOPIC ATTRACTED A GOOD-SIZED AUDIENCE
On the panel were James Spencer, Portland
Fuel, Peter Davidson, Tank Storage Association
and Stephen Marcos Jones, UKPIA.
Whilst the UK’s six refineries and 300
terminals are supported by an excellent
network supplied by rail, road, pipeline and
coastal vessels, they have HSE scrutiny and a
plethora of legislation to contend with.
A high cost / low margin business, fuel
distribution relies on substantial product
throughput for its survival; the industry still
generates £36 billion per annum accounting
for 5% of government’s total tax receipts.
Like many other heavy industries, fuel
production and its distribution make a vital
contribution to several local economies with its
inland terminals well-positioned to serve local
markets.
More and more dependent on imports, the
UK is increasingly short on indigenous diesel
and kerosene.
The fact that a third of the UK’s fuel
reserves are held outside the UK and tied into
EU rules is a concern to James Spencer who
asked – what happens if we need to move
this storage to the UK – will we actually get
planning permission?
“There will need to be a transition from
traditional fossil fuels to newer grades and
there will be a fragmentation of the supply
chain but there will also be opportunities,” said
James who views the present pathway as King
18 Fuel Oil News | July 2019
Canutesque.
“To some degree the industry has a PR
crisis – there are still long-term careers to be
had and it remains an exciting place to work.
I’ve been in this industry for 25 years and this
is the most exciting time ever – there are big
opportunities – the majors are reinventing
themselves as energy companies and even
smaller guys are taking advantage too.
Ageing assets
With recent years being difficult for those
needing to make financial decisions,
investments have been postponed as private
equity groups have held back.
“Our ageing assets need investment to
allow us to expand,” said Peter Davidson who
sees ‘unintended consequences’ if the industry
is not properly consulted by government.
Should import terminals lose
hydrocarbons, the need to import and store
other products for chemical and agricultural
purposes will remain – but at what point will
viability be in question?
“2050 is not that far away – we can
produce and store different liquid fuels for
diesel, kerosene and petrol but if this is to be
achieved, we must plan for lots more tanks
now.
“We need to shake-up our image and think
of ourselves as a downstream energy provider
switching the current infrastructure to low
carbon alternatives,” added Peter who regards
Brexit as a huge distraction from far more
important matters.
Feeling the government is going down the
electrification route too fast, Stephen Marcos
Jones is adamant that the industry needs ‘a
seat at the government’s decarbonisation
table’.
“Having demonstrated over many years
that our sector copes with constant change,
we are far more innovative than many others.
Calling for more support from government and
the need for an EU deal, Stephen said:
“If we leave without a deal, we fall out of
the REACH system which could create supply
chain disruption and administrative burdens.”
Are you concerned about potential
issues in the fuel supply chain?
Fuel Oil News always welcomes
your views –
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