INEOS is now the biggest player in the UK shale gas industry. fast work for a company that only started exploring its options in 2014
INEOS has been granted permission by the UK Government to explore huge swathes of England for shale gas.
The announcement by the Department of Energy and Climate Change means INEOS now has licences to explore one million acres of potential shale gas reserves.
“We are now the biggest player in the UK shale gas industry and are clearly seen as a safe pair of hands,” said Gary Haywood, CEO of INEOS Shale.
Britain is currently one of the most expensive places in the world to make petrochemicals.
But INEOS believes an indigenous shale gas industry has the power to revolutionise manufacturing in Britain, give the UK energy security for the first time in many years, and create thousands of jobs.
“We have seen at first-hand what it has done for the US economy,” said Gary. “Shale gas is a once-in-a-lifetime opportunity that the UK cannot afford to miss. North Sea oil created great wealth for the UK and shale gas can do the same.”
Most of the 21 licences – awarded to INEOS this month (December) – are in places with either a mining or industrial heritage. Areas include land close to its plants in Runcorn, Hull and Newton Aycliffe.
“We are delighted that the UK Government is determined to move forward with this exciting new industry,” said INEOS Chairman Jim Ratcliffe.
INEOS Shale is INEOS’ on shore oil and gas exploration and production business. The business made its first move into the shale exploration arena in August 2014 when it bought a share of a Petroleum Exploration and Development Licence from Dart Energy.
Since then it has grown rapidly. In March 2015 it struck a deal with IGas, which gave it access to almost a quarter of a million acres of potential shale gas reserves in Scotland. That was quickly followed by Government approval to explore parts of the East Midlands for shale.
But it’s the latest announcement – the awarding of a further 21 licences – which has delighted the INEOS team.
“To be awarded so many licences supports our belief that we are the right company to extract shale gas in the UK,” said Gary. “Shale gas is not about short-term speculation for us. It is about securing our manufacturing base which provides thousands of jobs in regional economies many in the North of England and Scotland.”
INEOS’ decision, though, to pursue shale gas exploration in the UK has, unsurprisingly, set it on a collision course with environmentalists and protest groups.
Opponents of fracking claim it is dangerous and disruptive, triggers earthquakes, contaminates drinking water and the air we breathe.
Supporters say – done properly – it is safe, provides countries with a valuable domestic resource, creates jobs, underpins manufacturing and will help to cut carbon emissions by displacing coal, which emits twice as much CO2 compared to gas.
Earlier this year (2015) INEOS met local residents, as part of a concerted effort to explain the facts around shale gas development, and answer any questions posed by people in the Scottish local communities living or working in one of our licence areas.
“There will always be a hard core of opponents who are philosophically opposed to fossil fuel development, despite shale gas having only half the carbon footprint of coal,” said Gary. “However, many local residents fear shale development for more local reasons – and these are the people INEOS wants to address, to reassure them of the impacts of shale development. We believe that most people are open-minded about shale development, but want more information.”
He added: “Reassuring people that the industry can operate responsibly, without long-term damage to the environment or their way of life is critical. It is also vitally important to make the case for why shale gas development is beneficial for communities, and for the country.”
INEOS has committed to fully consult all local communities and will share 6% of revenues with homeowners, landowners and communities close to its shale gas wells*
“We have the vision to realise that communities must share in the rewards for it to be successfully developed,” said Jim.
Working exclusively with INEOS in Europe are the world-leading pioneers who led the development of the first commercial shale play in the US, the Barnett Shale.
Petroleum engineer Nick Steinsberger and geologists Kent Bowker and Dan Steward have more than 20 years of industry experience.
“They have drilled thousands of shale wells without encountering any major issues and are advising INEOS on how best to safely access Britain’s vast reserves,” said Gary.
And unlike many exploration companies, INEOS can use shale gas as both a feedstock and a power source. That means shale gas could also help to underpin the competitiveness of INEOS’ manufacturing sites across the UK for years to come.
*4% to homeowners and landowners directly above wells and 2% to the wider communities.