By DARA BUTTERFIELD
Chemical giant Ineos has announced plans to invest £640m in shale gas exploration and has recently acquired 729 square miles of fracking exploration licences in central Scotland.
Ineos’ refinery and petrochemicals plant at Grangemouth is currently running at a loss and last year Ineos was thrown into a dispute with Unite union when it threatened to close the refinery potentially costing 1500 jobs. However the company believes that using shale gas as a raw material could transform the economics of the plant.
While Ineos is currently developing a facility to store and process cheap US shale gas, the firm believes that locally sourced shale gas could be the most lucrative option.
Gary Haywood, Chief executive, Ineos Upstream, said:
“We are keen to move quickly to evaluate the potential of this resource, and determine if we can economically produce gas from this area. If we can, it will provide a local source of competitive energy and raw materials to support manufacturing jobs in Scotland.”
Jim Ratcliffe, Chairman, Ineos, said:
“I believe shale gas could revolutionise UK manufacturing and I know Ineos has the resources to make it happen, the skills to extract the gas safely and the vision to realise that everyone must share in the rewards.”
In September the company announced that it would offer 6% of shale gas revenue to local communities and landowners, an amount expected to reach £2.5bn. 4% of the revenue would go to homeowners and landowners directly above the wells and 2% would go to communities living close to the wells.
“This is a game-changer for Britain’s shale gas industry. Giving 6% of revenues to those living above Britain’s shale gas developments means the rewards will be fairly shared. Ineos has also hired some of the world’s leading shale gas experts to make sure the gas can be safely extracted in an environmentally responsible way.”
However, Friends of the Earth Scotland criticised the move as ‘a transparent attempt to bribe communities” and a spokesman for Greenpeace UK characterised Ineos’ investment as ‘giant speculative bets on unproven and risky resources’.
Shale gas has faced heavy criticisms with 26 Scottish community and environmental groups demanding a moratorium on exploration in Scotland over fears of environmental pollution. Indeed last year saw fierce protests against an exploratory well in Sussex.
A spokesperson for Ineos added that:
“Substantial further investment would follow if the company moved to development and production.”
The company has already hired a team of fracking experts from Mitchell Energy, one of the pioneers in the US shale gas industry, despite a recent report from the British Geological Survey suggesting that Scotland’s shale gas resources were ‘modest’ compared to those in England.