INEOS pledges £375 million ‘transformational community payback’ packages in its Scottish shale gas plans


Shale gas workers
Shale gas workers

The Swiss-based global petro-chemicals refiner that operates the Grangemouth plant has launched a 12 month information campaign about its plans to develop a 21st-century shale gas mining industry in Scotland which could see local communities receiving ‘transformational’ payments of up to £375 million if its  plans are approved.

INEOS owns and operates the Grangemouth refinery and last month also acquired the petroleum exploration licences for a large block of land across Scotland’s Central Belt, stretching from the eastern fringes of Greater Glasgow, up to Stirling town and shire, and down and across into West Lothian.

The company considers a modern shale gas industry – in an area which was first mined for shale 150 years ago – could ‘transform’ the Scottish economy by producing the raw material feedstock that supplies swathes of everyday plastics and polymers used in clothing, packaging, transport – such as ‘plastic’ body panels for modern cars, planes and trains).

Gary Haywood, Chief Executive, INEOS Upstream; commented: “Our business needs ethane and methane gas as feedstock. And without gas, there would be no manufacturing industry in the UK.

“So the opportunity to building an industrial powerhouse for the 21st century around Grangemouth with Scottish shale gas is an opportunity that Scotland should not be passing up.”

INEOS stressed that it is pressing ahead with plans to import supertanker-loads of shale gas from the USA over the next 15 years – which will provide security and continuity of supply until 2030 – following a near-50% collapse in gas supplies from the North Sea over the past five years.

While the Scottish Government earlier this year announced a temporary moratorium on fracking – the process of shale gas mining – Scotland’s Energy Minister Fergus Ewing also announced that he wanted to see an ‘evidence-based debate’ on the issue.

According to last year’s British Geological Survey study, Scotland is home to substantial shale gas deposits.

The INEOS information programme will explain how shale gas extraction actually works, the issues involved and the benefits to both the country and the local communities. A series of films called “The Fracking Facts” will be screened to support the presentations.

The “town hall” meetings will begin in the areas where INEOS already has shale gas licences and will then roll out across the whole of Scotland’s Shale Belt. The first of 15 local information meetings – at which member of the public will have the opportunity ask questions about the INEOS plans – have been scheduled as follows:

  • 16 April: Denny High School
  • 21 April: Alloa Town Hall
  • 22 April: Falkirk High School
  • 23 April: Kilsyth Academy
  • 30 April: Cumbernauld

Haywood –  who was formerly the Commercial Director for BP Grangemouth – said: “The Scottish government wants the public to be fully informed about shale gas production – and we are determined to help.

“We are launching Scotland’s biggest shale gas information programme to make sure that local communities get the chance to hear the facts rather than the myths about shale gas.”

During these meetings, a series of up to 10 short films called “The Fracking Facts” will be screened to explain issues of possible public concern surrounding shale gas extraction.

The meetings are intended to show exactly how INEOS intends to deal with these issues and to also explain INEOS’ plan to voluntarily donate 6% of shale gas revenues to the local community – typically amounting to £375 million per community.

This would be apportioned with 4% (£250 million) going to landowners and 2% (£125 million) for local communities – which would also enjoy additional benefits in the form of business rates paid by INEOS.

Jim Ratcliffe, INEOS Founder and Group Chief Executive, commented: “Overall, we’re looking to ‘give away’ up to £2.5 billion in the next 15 years to our local communities <should our shale gas mining plans proceed> – which will have ‘transformational’ economic impacts in these communities.”

Onshore – and offshore – mineral rights (oil, gas, coal) were nationalised by the British government in the 1930s. The Department for Energy (DECC) issues exploration licences to operators (such as Shell, BP, etc) and the mineral wealth they recover is then taxed by the UK Treasury.

In the same way that householders do not ‘own’ the airspace above their property (above a certain minimum height) householders/ landowners do not ‘own’ the mineral rights below their land/property. INEOS now holds shale gas exploration licences issued by DECC and any gas it recovers will be taxed by the Treasury – once local planning permission is granted.

Tom Pickering, INEOS Upstream Director, commented: “We know the importance of talking to the community about shale gas extraction. We believe shale gas could revolutionise manufacturing in Scotland, creating tens of thousands of new jobs.

“We also believe INEOS has the skills to safely extract it from the ground and that our plan to share the revenue with the local community is a good one.”

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