Whitegate oil refinery seen as ‘a milking cow’
A government memo on Whitegate recorded that in 1982 the then minister for transport John Wilson had to amend CHC’s proposed harbour dues because they “bore too heavily on the oil trade”.
It claimed new proposals submitted by the CHC a year later would see 90% of its revenue come from the oil trade.
John Bruton, the minister for industry and energy, was also forced to seek “a more realistic and balanced approach” from the commissioners with regard to levies from the oil trade in Cork Harbour.
Nevertheless, the Irish Refining Company, which owned Whitegate, was forced to complain to the minister for transport Jim Mitchell after the CHC proposed to increase its rates by up to 42% on the refinery again in 1984 following a 17% hike the year before.
Whitegate’s manager, JD Fennelly, described the CHC’s attitude to Whitegate as “inequitable, unnecessary, excessive, and inappropriate at this time”.
The Government believed the potential of an oil discovery off the coast of Waterford could aid the long-term development potential of the refinery.
Other papers show the previous administration under Charles Haughey was actively considering the State’s takeover of the privately owned refinery for strategic security of Ireland’s oil supply from 1981 after Whitegate had been operationally closed by its owners.
It was estimated the cost imposed on taxpayers by the normal operation of the refinery in 1981 would have amounted to up to £18m and would be “even more burdensome” in the years ahead due to inflationary pressures.
However, an analysis found the purchase of Whitegate by the State would not confer any significant strategic advantages, while the costs to the exchequer would be high.
Similar benefits could be obtained at less cost by increasing the level of strategic amounts of oil to be stocked in Ireland, it concluded.
Another problem which represented “the biggest commercial risk” was the possibility that oil companies would not purchase refined oil from Whitegate or the EEC would object to such an arrangement.
In Nov 1981, then industry and energy minister Albert Reynolds recommended the Government should buy Whitegate for £8m, even though it would cost £20m more to refine oil at the Cork facility than at more modern refineries.
However, a memo to the taoiseach, Charles Haughey, warned the Government did not have sufficient information to take on such heavy financial commitments.
“The balance of economic considerations, including strategic security of supply considerations, strongly militate against purchase,” it noted.
However, the sale went ahead and Whitegate, built in 1959, passed into state ownership in Sept 1982.
State papers show Bruton sought government approval in Nov 1983 to keep the refinery operating pending clarification of the commercial potential of an oil discovery by Gulf Oil off the Waterford coast.
A group established in early 1983 to review Whitegate’s operations found its economic losses in the first six months under state control were “unacceptably high”.
A majority of the group’s members recommended closure of the refinery if such losses were to continue into the future.
A court challenge by oil companies against legislation obliging them to take a certain quantity of supplies from Whitegate further complicated the issue.
Bruton recommended the Government should agree that Whitegate be kept operational at a minimum cost until the potential of the Gulf discovery became clear over the following two years.
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