Industry

Reaction to Ineos announcement

The chemicals company Ineos, which runs the Grangemouth petrochemicals plant and refinery in the Firth of Forth, announced plans today to invest up to £640m in shale gas exploration. The investment is dependent on Ineos being successful in its recent applications for oil and gas drilling licences. Chairman Jim Ratcliffe said he wanted Ineos to become the biggest company in the British shale gas industry.Here’s our round-up of reaction from politcs and the environmental movement.  Reports of the announcements at FT, BBC, Energy Voice

Political reaction

Matthew Hancock, Energy minister

“Shale gas has potential to strengthen energy security, secure jobs & reduce carbon emissions, so I welcome Ineos news” (tweet)

Mr Hancock told Energy Voice

“It is good news that Ineos want to invest in extracting UK shale gas. Ineos is a major company with serious intent and the confidence to make the most of this domestic energy supply.

“Extracting domestic shale gas has the potential to create jobs, make us less reliant on imports from abroad and help us tackle climate change, all within one of the most robust regulatory regimes in the world.”

Tom Greatrex, Shadow Energy Minister

“Shale gas extraction cannot go ahead unless we have a system of robust environmental regulation and comprehensive inspection. But David Cameron’s government have repeatedly sidelined genuine and legitimate environmental concerns to justify their desire to present shale gas as a silver bullet for all of our energy challenges.”

“Early this month the Tories and Lib Dems voted against Labour amendments which would close loopholes in the existing environmental regulation for shale gas in the Houser of Lords – we will table similar amendments to ensure robust regulation in the House of Commons. Our proposals to ensure monitoring of methane in the groundwater, compulsory Environmental Impact Assessments and a statutory twelve-month monitoring period were all rejected by Government. As INEOS’ investment brings the UK closer to commercial scale extraction of shale gas, the Government can no longer afford to ignore these much-needed reforms to the regulatory framework.

“While 8 out of 10 homes still rely on gas for heating, shale gas may have a role to play in displacing some of the gas we currently import and improving our energy security – it is not about increasing how much gas we use, but where we get it from.”

Scottish Government spokesperson

“The Scottish Government believes that we should proceed cautiously and take an evidence-based approach to unconventional oil and gas extraction, including ensuring strong environmental protection and making sure that the views of communities are taken into account.

“As has been recognised by environmental NGOs, our approach is in stark contrast to the approach of the UK Government.

“In particular the Scottish Government has strongly opposed the UK Government’s plans to grant automatic drilling access rights under homes no matter the views of householders.
“In June our revised planning framework made further regulations including a buffer zone and additional risk assessment.

“There are no planning applications for projects that propose the use of hydraulic fracturing (fracking) techniques in Scotland at this time.

“We strongly endorse the appropriate and robust regulation of drilling techniques such as fracking associated with the extraction of shale gas.”

“Proposals for coalbed methane or shale gas production in Scotland will be studied closely with each proposal considered through the normal planning process and the appropriate regulatory regimes including SEPA’s updated guidance on the regulation of shale gas and coalbed methane published in December 2012.

“We have also recently tightened planning policy on this issue including bringing in buffer zones. It is also vital that potential operators engage with local communities and the key regulators.” (Energy Voice)

Murdo Fraser, Scottish Conservative energy spokesman

“Shale gas is a huge opportunity for Scotland and it is good to see that Ineos is intent on maximising its potential. Ineos has recognised that the future of Grangemouth is dependent on cheap shale imports or, if possible, a domestic supply. On our doorstep we have a source of energy that has the potential to increase our energy independence, create jobs, reduce carbon emissions and lower fuel poverty.” (Energy Voice)

Patrick Harvie, Green Party MSP

“Climate science tells us we already have access to far more fossil fuel than we can safely burn, so the public is quite justified in opposing these risky new techniques for extracting more gas.

“We should be looking to use our existing hydrocarbon supplies carefully and within limits, rather than chasing after more, as well as investing in clean technology that delivers long-term jobs and a safe environment.

“If Ineos think they can easily frack the Forth Valley they’ve got another thing coming. This is a highly populated area, and we’ve already seen serious opposition mobilised in local communities where coal bed methane drilling has been proposed. Anyone thinking of fracking in Scotland’s central belt will face a similar wave of protest.” (Energy Voice)

Caroline Lucas Green Party MP

“It won’t have escaped the public that the INEOS investment announced for shale gas exploration is roughly the same size as the UK’s entire contribution to the Green Climate Fund, also publicised today.

“The Green Climate Fund was set up to help developing countries cope with the devastating impacts of climate change that many are already facing. The Energy Secretary is right to emphasise the need to help poorer countries develop using clean renewable technologies.”

“But it’s incoherent and irresponsible for the Government, at the same time, to be doing everything it can to build a new dirty fracking industry here in the UK. Ministers know that the vast majority of existing fossil fuels must stay in the ground, if we are to avoid the worst impacts of climate change.

“The Government’s pro-fracking policies, such as weakening the planning system and offering huge tax breaks to companies who want to drill for shale gas, completely undermine the Government’s claim to be playing its part in tackling climate change.

“This comes as new analysis suggests that solar power could be cheaper than gas in as little as four years’ time, yet Ministers are slashing support for large scale solar, despite the fact solar is the most popular energy technology.

Reaction from environmental groups

Richard Dixon, director of Friends of the Earth Scotland

“The Scottish Government introduced tough planning rules for any unconventional gas application earlier this year. While a number of Petroleum Exploration and Development Licenses granting exclusive rights to exploit unconventional gas exist in Scotland, no operator has the required permits from environmental regulator SEPA to allow them to undertake hydraulic fracturing.

“Unlike its UK counterparts the Scottish Government have taken a cautious approach to unconventional gas and fracking, introducing a tougher planning regime and opposing plans to remove peoples’ rights to object to fracking under their homes.

“Scotland does not need unconventional gas to meet our energy needs, and extracting and burning it will jeopardise our climate targets and expose local people to unacceptable health risks. In a country that produces 7 times more hydrocarbons than we consume, and acknowledges the urgency of climate change, it would be utterly irresponsible to open up a new frontier of fossil fuels. We urge the Scottish Government to make it clear that the fracking industry has no place in Scotland by banning all unconventional gas activity once and for all.”

Simon Clydesdale, energy campaigner at Greenpeace UK

“Investment is essential to transform our energy system, but not giant speculative bets on unproven and risky resources. Ineos have jumped on a spin-powered bandwagon which is going nowhere,” he said in a statement.

“Independent academics recently called out government ministers over the ludicrous levels of hype around shale gas, saying ‘shale gas has been completely oversold’. It seems that Ineos have based their business plan on breathless PR brochures rather than scientific reports.” (Varied, including BusinessGreen.com)

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