They belch smoke and steam, but Port Talbot loves its furnaces

OUT of the mist and the rain a labyrinth of pipes appears. Massive cooling towers can be seen fleetingly through the swirling cloud. Chimneys belch great clouds of steam which mingle with the sea-fret and envelope the furnaces and distillation towers with their surreal spiral staircases.

Welcome to Port Talbot.

Leaving behind what the PR hand-outs have told you is one of the most efficient steel-producing plants in Europe, you head for the windswept promenade where white waves crash, heavy laden with muddy sand, into the black rocks. Menacingly through the great fog, in the distance, white and orange lights seem to blink where the flare stacks rise from the serpentine coils of the British Petroleum plant at Baglan Bay.

This is, however, an outsider's view. The folk in the pubs and clubs of the little Welsh town tell a different story.

It is not simply about jobs and security, though it is true there is outrage at reports that the Government is to block the development of an energy park which promised 3,000 jobs on the largest single new site in the UK with room for a building of a million square feet - big enough for a car assembly plant.

No, it is about pride and about something else which has died in industrial life in modern Britain. Sitting in the Llandarcy Social Club, Mel Harris, a production technician at the chemical works, tells part of the story. "In this community there's virtually no-one who hasn't cause to be thankful to BP," he begins.

There is nothing of the obsequiousness of the employee about this. His drinking companions are a social worker, a police inspector and a civil servant. They all endorse his view.

The policeman talks approvingly about BP's road safety team, which tours local schools with a car adapted for use by children. The social worker speaks of her work as child safety co-ordinator on a BP-sponsored programme to revitalise the local Sandfields housing estate. The civil servant praises BP's Helping Hand which, among other things, buys football kits for new local clubs and even has its own bouncy castle which it lends to local groups.

If it sounds like good old-fashioned paternalism, that sense is only reinforced when Terry Harvey, the club manager, whose grandfather, mother and father, and son have all worked for the firm, recalls the good old days when, on wet Bonfire Nights, the company would sent employees out with paraffin sheets to set the fires ablaze. "When I was a boy we used to say that everyone round here's got a BP stamp on their bum." All a thing of the past? Adrian Jenkins insists not. He is director of development at Neath Port Talbot Borough Council. "They have been very good industrial neighbours. They're not looked at as a multinational but as a local firm. And it has continued when they started to downsize."

BP shut its crude oil refinery at Llandarcy in 1987. That used oil from the Middle East and the company found the plant was unable to compete with oil from the North Sea. It sparked off a domino effect in the manufacture of secondary oil products which has continued ever since.

The workforce on BP's two sites was more than halved. Around 1,000 jobs were lost by 1991. Another 300 went. Then in 1994 its Baglan Bay site lost a further 350, bringing the workforce down to the present 310.

"BP did not just walk away," says Adrian Jenkins. It spent pounds 40m creating a business park where 70 new companies eventually grew, employing nearly 800 people in everything from laser technology to insurance broking. Then it set up a scheme to offer cheap unsecured loans for small businesses locally. When the last tranche of jobs went it helped its redundant staff to set up their own businesses - not one of which has since failed - and helped all but 10 of the others to find a new job.

"It's part of our corporate philosophy - to be a good neighbour," says BP's new business manager, Ken Allison. "Building a good reputation brings business. When we want to start work in a new area we can convince the local people of our bona fides by showing them how we behave elsewhere." The Llandarcy site is due for complete closure next year and no new investment is planned at Baglan Bay, so it too may close within the next decade. BP's solution was to turn the adjacent land into an "energy park" where businesses would be attracted by electricity at a 30 per cent discount, provided by an updated gas-fired version of its site's power station. A commercial producer would build it with the inducement that surplus power could be sold to the national grid.

The Government seems unimpressed. "If we gave it the go-ahead there would be 15 others in the queue with similar proposals. We'd be sentencing coal to death," said one Whitehall insider. "More than that, if we continued the Tory dash-for-gas policy, in five years we'd be 90 per cent dependent upon gas. And when North Sea oil runs out we'd be at the mercy of people like Turkey and Tajikistan."

All of which puts the Welsh industry minister, Peter Hain, in a difficult position. Many of his constituents work at Baglan. But others have jobs in the rump of the mining industry. "I want to see the energy park go ahead," he says. "We have given them two options. Either they go for a smaller power station which mainly supplies the energy park and doesn't put so much into the national grid. Or they go for a clean coal power station."

They are unimpressed in Port Talbot. Ken Sawyers, chief executive of the local authority, insists a coal-fired station is unacceptable. "The environmental impact would be too great." As to a smaller gas-fired plant, BP insists that it wouldn't produce power cheap enough to induce firms to move. "If the Government won't back our proposal," says Ken Allison, "then they need to think about some other inducement - enterprise zone status or full development area status."

One thing is sure, says Vernon Griffiths, 75, who worked for BP for 39 years, as he rises to leave the club: "We're the relics of the good days. You don't get jobs for life nowadays in any industry. You won't see another firm like them round here again."