Ineos Issues New Call for Fracking
With a new UK government in place, the shale gas industry has quickly come forward to insist that fracking find a place at the top of the national agenda post-Brexit. In former prime minister, David Cameron, and chancellor of the exchequer, George Osborne, the industry had found open ears and arms, but new prime minister, Theresa May, has not yet publicly taken a stance.
Unsurprisingly, olefins and polyolefins giant Ineos, which has recently moved part of its operations back to the UK after choosing to go into Swiss “exile” six years ago, is again at the center of the discussion. In an interview with London-based newspaper The Times, the company’s founder and chairman, Jim Ratcliffe, revived earlier arguments for shale exploitation, which he said could kick-start a manufacturing renaissance in the UK.
Alongside company managers such as John McNally, CEO of Ineos Olefins and Polymers, and Tom Crotty, Director of Corporate Affairs, Ratcliffe has found a powerful ally in Steve Elliot, CEO of the UK Chemical Industries Association (CIA). If there is anything good for the UK to come out of Brexit, Elliot commented recently, it will be the UK’s freedom to create its own energy policy. Independent of the EU, he said, “overcoming resistance to shale gas could be easier.”
In an interview with the Glasgow, Scotland newspaper The Herald, McNally, who runs the mammoth petrochemical complex at Grangemouth, called on the Scottish government to end its moratorium on fracking. This would be a “double win,” he said, as the country would have “lots of natural gas again” and feedstock to supply chemical plants.
McNally also asked rhetorically why Ineos should have to invest £450 million to import and store ethane derived from US shale gas, “when the needed resources lie “a couple of kilometers underneath our feet in Grangemouth.”
Before the Brexit referendum, Crotty had suggested that, with Scotland’s moratorium still in place, the company would focus its fracking resources in England. Here, recently passed rules allow the government to overturn local bans on shale gas exploration.
In an interview with the British newspaper Financial Times this week, the Ineos director said the company aims to accelerate shale gas development in the UK by filing as many as 30 planning applications to drill test wells in the next six months.
British environmentalists who reacted negatively to the renewed fracking initiative and called on Scotland to thwart Ineos’ plans to open the country to drilling have found fresh support in their opposition from the UK Committee on Climate Change, a body that advises the government on keeping greenhouse gas levels within legal limits.
A booming fracking industry would have a negative effect on British climate change targets unless it is tightly controlled, the committee said, setting down three conditions it said must be met to address the risk: Shale gas produced in the UK should displace imports rather than increase overall use; the risk of methane leaks must be rapidly addressed and fracking’s impact on the climate should be neutralized by cutting greenhouse gas emissions in other industries.
Under the 2008 Climate Change Act, the UK is committed to an 80% cut in greenhouse gases by 2050 compared with 1990. At present, natural gas accounts for more than 80% of UK heating and about 30% of electricity generation, reports say. About half the country’s gas supply is imported, mainly through a pipeline from Norway and liquefied natural gas tankers. With North Sea gas production seen as dwindling, shale gas is looking more attractive to some industries, including chemicals.