First shipment of fracked shale gas set to arrive in UK
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Version 0 of 1. The first ever shipment of shale gas from the US is set to arrive in Britain less than 24 hours after the Labour party vowed to ban fracking, the method by which the controversial energy source is extracted. Ineos, the petrochemical company founded and chaired by a billionaire, Jim Ratcliffe, will take delivery of a tanker full of ethane at its Grangemouth plant in Scotland on Tuesday, marking the first fruit of a $2bn investment. Fracking is subject to a moratorium imposed by the devolved government in Holyrood. But the Grangemouth plant will receive 27,500 cubic metres of ethane extracted from beneath western Pennsylvania in the US, where shale gas production has boomed. The imports are due to replace dwindling supplies from the UK’s North Sea reserves. The gas has travelled more than 3,500 miles via a “virtual pipeline” of eight tankers to reach Grangemouth, where Ineos has built an import terminal as part of an overhaul costing £450m. The ethane will be fed into “crackers” that convert the gas into ethylene, used in the production of a range of plastic products. “Shale gas can help stop the decline of British manufacturing and today is a first step in that direction,” said Ratcliffe. But consignments such as this one, due to arrive on a giant tanker named the Ineos Insight, will be the only source of shale gas for Grangemouth if the Labour party wins a general election. Speaking at Labour’s annual party conference the shadow energy minister, Barry Gardiner, said the party would ban fracking and focus on low carbon energy sources if it wins the next general election. “Fracking locks us into an energy infrastructure that is based on fossil fuels long after our country needs to have moved to clean energy,” said Gardiner. “So today I am announcing that a future Labour government [would] ban fracking.” Jeremy Corbyn, Labour’s leader, has previously said that fracking is “not compatible” with tackling climate change. Although Ineos has begun importing from the US, where an abundance of shale gas has left the world’s largest economy with more than it needs, it would like to become the leading player if fracking takes off in the UK. Ineos, which slashed its tax bill by moving its headquarters to Switzerland in 2010, was awarded 21 new licences in December, including sites in North Yorkshire, the north-west and east Midlands. The awards increased the area of land over which it holds licences to 1m acres, nearly twice the area of the Yorkshire Dales national park. But Ineos’s ambitions have been curtailed by slow progress in obtaining planning permission, which is necessary before it can exploit the licences. A spokesperson for Ineos said earlier this year that it hoped to have 30 planning applications lodged before the end of the year but the company has since scaled back its plans to five, followed by a further 25 over the next 12 months. Its ambitions have also been constrained by a moratorium on fracking imposed by the Scottish government. The setbacks have made for a chastening climbdown for Ineos, given the confidence with which Ratcliffe announced his intentions in 2014. Ineos promised investment of £640m and bumper payouts for communities and landowners of up to 6% of revenues, which it estimated could amount to £2.5bn. Fracking is a controversial gas extraction technique that involves the injection of water and chemicals at high pressure into shale rocks, forcing gas trapped inside to the surface. Critics of the process say it causes environmental problems including pollution of the water table and it has also been blamed for causing earthquakes. Ineos’s plans became even more controversial after emails emerged that showed the company planned to dump treated wastewater from the process into the sea. Supporters of fracking claim it could help rein in rising energy prices, offer greater energy security in case supplies from abroad are disrupted and provide a low carbon bridge while the UK weans itself off energy produced from coal. They also claim it could support thousands of jobs and deliver financial benefits to communities near the industry’s infrastructure. |