Global petro-chemicals giant INEOS – which operates the Grangemouth refinery – is to mount a legal challenge to the ‘fracking ban’ on onshore oil and gas exploration imposed by the minority SNP-led Scot-Govt.
This ‘administrative’ (ie not legislative) ban was imposed on a ‘temporary’ basis in January 2015 and made ‘permanent’ in October 2017.
An independent scientific report commissioned by the Scottish Government subsequently concluded that shale gas could be produced safely
The Scottish Energy Minister Paul Wheelhouse claimed that a ‘leading-question’ Scot-Govt public consultation showed ‘overwhelming’ opposition to onshore oil and gas exploration.
But the survey was polluted with thousands of pro-forma statements organised by environmental lobby groups, many of which parroted Friends of the Earth Scotland claims which the Advertising Standards Authority had banned for being serious misleading.
INEOS will argue that the ‘ban’ – which is in effect a Scot-Govt ministerial diktat – is unlawful and is seeking a judicial review of the Scottish Government’s “effective ban” on onshore unconventional oil and gas development in Scotland.
The application will be heard at the Court of Session, the supreme civil court in Scotland. INEOS expects a decision on whether there is a case to be heard within a couple of months.
Tom Pickering, Operations Director at INEOS Shale, said: “The decision in October was a major blow to Scottish science and its engineering industry, as well as being financially costly to INEOS, other businesses and indeed the nation as a whole.
“We have serious concerns about the legitimacy of the ban and have therefore applied to the Court to ask that it review the competency of the decision to introduce it.”
INEOS Shale also announced that with its co-venture partner Reach it has lodged a petition for judicial review of the recent decision by the Scottish Government to “effectively ban” onshore unconventional oil and gas extraction in Scotland by introducing a new planning policy of “no support.”
INEOS believes that there were very serious errors within the decision-making process, including a failure to adhere to proper statutory process and a misuse of Ministerial power.
The ‘fracking ban’ in October brought to an end a two-year wait during which the Scottish oil and gas industry was left in limbo.
With an official ban on shale and all other forms of unconventional oil and gas extraction, Scotland will miss out on the numerous economic and employment benefits that will be enjoyed by England, including an estimated 3,100 Scottish jobs.
The decision also closed the door on hopes for the estimated £1 billion to be received by local communities as a result of a healthy shale industry.
The decision also raises an important strategic question about how Scotland does business. The 2015 moratorium was announced at a time when INEOS and other shale gas operators in Scotland, in reliance on what was then a supportive national and local planning policy position, had invested millions over the best part of a decade in acquiring licences and obtaining planning permissions to construct drilling sites in discrete, safe locations.
Such investment has been rendered worthless as a consequence of the ban, even in areas where no fracking was proposed. This despite the panel of scientific experts appointed by the Scottish Government concluding that shale development is capable of being managed safely.
Tom Pickering added: “Natural gas keeps the power on and homes warm in Scotland as with the rest of the UK, and shale has the potential not only to meet these needs but also to have a positive impact on the economy and energy security.
“INEOS, Reach and other operators have invested significantly in unconventional development over the years, against a supportive regulatory and planning backdrop.
“If Scotland wants to continue to be considered as a serious place to do business, then it cannot simply remove the policy support that attracted that investment in the first place without proper procedures being followed and without the offer of appropriate financial compensation. In the light of these failings, INEOS has been left with no option other than to raise this legal challenge.”
INEOS has obtained petroleum exploration licences from the Brit-Govt Energy department around its Grangemouth petro-chems refinery site.
The company is unable to get enough ‘natural’ gas from the North Sea to feed its refinery and now imports two super-tankers of liquid shale gas a month from the USA to Grangemouth. The Scot-Govt is unable to ban shipments of imported shale gas.
Supporters of fracking say it could offset the decline in North Sea oil reserves and boost the Scottish economy.
Britain is estimated to have substantial amounts of shale gas trapped in underground rocks but despite support from the central government in London, progress has been slow as environmentalists and local communities lobby against fracking.
Scottish Energy Minister Paul Wheelhouse, MSP, declined to comment.
* Cuadrilla was yesterday given the go-ahead to explore for onshore oil near at Balcombe, West Sussex.
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