US shale gas cheaper to develop than in the UK
By Elisabeth O’Leary and Karolin Schaps
EDINBURGH/LONDON, Sept 22 (Reuters) – The first shipment of gas fracked from U.S. shale will arrive in Britain next week, upping pressure on Scotland to reassess its opposition to fracking.
Chemicals giant Ineos will be importing ethane, obtained from rocks fractured at high pressure, in a foretaste of larger deliveries of liquefied natural gas (LNG) from shale set to reach Europe in 2018.
The shipment of ethane, used to make plastics, anti-freeze and detergents, will arrive in Scotland’s Firth of Forth on Tuesday, accompanied by a lone Scots piper at sunrise, the company said.
The Zurich-headquartered group is against a Scottish moratorium on fracking. It is Britain’s biggest shale gas company in terms of acreage and it has promised to share six percent of future shale gas revenue with local residents.
Chairman Jim Ratcliffe, one of Britain’s wealthiest men, argues he is offering the potential from shale fracking to create tens of thousands of jobs, putting pressure on the Scottish government grappling with an economy expected to be weakened by Britain’s decision to leave the EU.
“Shale gas can help stop the decline of British manufacturing and this is a first step in that direction,” he said in a statement.
While the British government backs shale gas extraction, Scotland, under its devolved powers, imposed a moratorium on fracking in early 2015. It said more research was needed before a final decision.
Environmentalists say fracking damages the climate, arguing that chemicals used contaminate groundwater, and the process distracts industry from focusing on renewable sources of energy.
Public opposition to fracking, particularly amongst those who support the devolved Scottish government, is higher than elsewhere in Britain, surveys show. And Scotland’s parliament recently voted to ban it outright, with the ruling Scottish National Party abstaining.
But Scotland’s economy is highly dependent on oil as many of its workers are employed in Britain’s North Sea oil basin and its fiscal deficit has ballooned as the oil price has declined, jobs have been lost and tax revenues have plummeted.
“Shale gas is much cheaper to develop in the U.S. than in the UK and our indigenous shale is still stuck with many political and environmental hurdles to overcome,” said Richard Sarsfield-Hall, director at Poyry Energy Consulting.
Ineos has access to more than 1 million acres of land across England and Scotland containing shale gas deposits but has yet to apply for a planning permit.
(Reporting by Elisabeth O’Leary in Edinburgh and Karolin Schaps in London; Editing by Stephen Addison)