UK shale gas setbacks due to election, vital for economy – INEOS
Interview article by Jonathan
LONDON (ICIS)–Recent setbacks for the shale gas industry in the UK are likely to be linked to the general election, a director at the Switzerland-headquartered chemical major INEOS said on Tuesday.
The company is confident that a shale gas sector will eventually develop in the country, and would guarantee cheaper energy for the country, according to INEOS director Tom Crotty.
Crotty said the uncertain situation for the shale gas industry at present had been one of the factors behind the company getting involved in advocating for the safety and potential economic returns of the sector.
He was speaking shortly after the company announced the acquisition yet more several shale gas licences in the UK.
Just months before a forecast-to-be tight general election, politicians have not wanted to be in the spotlight awarding licences for a practice to which the public opinion is opposed to, according to most polls, an opposition which rises in areas where the wells could be located.
The INEOS director also said he “suspected it [the UK’s May general election] has a lot to do” with recent political setbacks the industry has had to face, such the moratorium imposed by the Scottish parliament or the refusal of energy firm Cuadrilla’s application to explore for shale gas in northern England.
“The moratorium in Scotland has no timescale,” Crotty said. “The Government wants to see proper consultation taking place; we are supportive of that and we are launching our Scottish consultation programme next week, to try and persuade people that this technology is absolutely safe and will have big economic benefits,” he added.
The company’s main petrochemicals site in the UK, located in Grangemouth, Scotland, could greatly benefit from local shale gas extraction but its feedstock is guaranteed for the next two decades thanks to deals signed in Norway and in the US, said Crotty.
“The site is running well. Construction of the [ethane] tank is going well, and we’ll actually be bringing the first gas from Norway in the third quarter, and from the US in mid-2016. At that point, Grangemouth will be in a strong position ,” said Crotty.
The public consultation INEOS will hold in Scotland over the next week will be the test for the company’s proposal to share the benefits of shale gas extraction. Crotty said some members of the UK parliament have shown warmed to the concept of shale gas exploration thanks to the idea.
“The current situation [of shale gas] needs companies like ours to explain people the economic imperative of shale gas, that is our challenge now. The UK has got a major energy issue and unless it faces to that and does something about it, the economy is going to suffer, especially the chemical industry,” said Crotty.
Moreover, he said that despite falling gas prices, Europe values “remain ridiculously high” compared to the US, something local shale gas extraction would alleviate to an extent.
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