Ineos to Miss This Year’s Fracking Target
Ineos will submit five planning applications for shale gas exploration to the British government before the end of this year, falling far short of its originally announced target. It has 30 drilling licenses across the UK, but has scheduled the first fracking trials for the East Midlands area of England. The Swiss-based group’s ambitions of drilling in Scotland’s central belt, where its Grangemouth complex is located, have been frustrated by the national government’s moratorium, and executives have repeatedly pressed for a decision sooner rather than later. The message thus far has gone unheard, but this could be a moot point, as Ineos’ ambitions of drilling “tens of core wells” during 2016, as director Tom Crotty had suggested earlier, may have been overly ambitious.
While no detailed information has been given as to why exploration activities have been held up, Tom Pickering, operations director of Ineos Shale, commenting on the reduced number of planning applications, said the group is still in the process of surveying potential fracking sites and consulting with local communities. However, he said there has been “no downsizing” of its ambition to carry out exploration. Around 55% of the people attending the community information events have been seen to be in favor of fracking, he told the UK press.
Two years ago, Ineos said it planned to invest up to $1bn in UK shale gas exploration over the coming four to five years. In an effort overcome local opposition, it pledged to hand 6% of the investment back to affected landowners and local councils. Chairman Jim Ratcliffe’s ambitions were given an additional push by then-UK Prime Minister David Cameron, who changed the rules to allow the government in London to overturn anti-fracking decisions by local councils.
Despite Brexit overshadowing much of the new government’s agenda, in early August current Prime Minister Theresa May proposed that money set aside to compensate areas where shale gas will be extracted be paid directly to residents.
A final decision is to be made at the end of the year. Ineos is preparing to land its first shipments of ethane from US shale fields for Grangemouth on Sept. 27. "Our commitment to shale and the economics of extraction remain as strong as ever and we look forward to kick-starting British manufacturing with this new competitive fuel source," Pickering said.