Industry comments on INEOS’ shale gas investment

Posted on 21 Nov 2014 by Jonny Williamson

Industry responds to the news that INEOS, one of the world’s largest chemical firms, is planning to invest £640m in UK onshore shale gas exploration and appraisal.

Richard Warren, senior climate and environment adviser, EEF
Richard Warren, senior climate and environment adviser, EEF

Ineos’ announced intention to invest heavily in shale gas production is tremendously promising news for the nascent shale gas industry in this country and the wider knock on impacts it could have for the UK.

“The biggest winner by far will be the chemicals industry itself, which is currently significantly challenged by US competitors with access to vastly cheaper feedstocks. A viable shale gas industry in this country may prove vital for the long term future of the UK chemicals industry.

“Beyond this, the development of a UK shale gas industry will require a significant manufacturing supply chain for the provision of steel, cement, and specialised drilling equipment; this supply chain will only develop in the UK if manufacturers can have confidence in the future of UK shale has production and develop a robust business case on it. This announcement will certainly help in this regard,” Richard Warren, EEF’s senior climate and environment adviser

Nigel Jackson, chief executive, Mineral Products Association
Nigel Jackson, chief executive, Mineral Products Association

Nigel Jackson, chief executive of Mineral Products Association (MPA): “Mineral products producers, particularly the more energy intensive sectors such as cement and lime, would welcome cheaper, more secure and sustainable sources of supply.

“Shale oil and gas resources are in the exploration phase and there is a long way to go before we can be sure that what looks promising will convert into economically recoverable reserves. It is likely to take many years before we can be clearer as to the real potential, as sites navigate their way through the planning and permitting system and we see the reaction of local communities.

“We support anything that will accelerate the process, but shale gas is just like any other form of mineral development and lead times are typically between five and 15 years from site identification to production.”

“The responsible development of a shale gas industry is a big opportunity for UK plc’s industrial competitiveness. We want to see unconventional gas developed responsibly to increase energy availability for the UK’s foundation industries like chemicals and steel and we hope that a robust UK supply chain can be created so that the full value of this new industry is captured here in the UK,” Tata Steel in Europe

Dr Laura Cohen, chief executive, British Ceramic Confederation
Dr Laura Cohen, chief executive, British Ceramic Confederation

Dr Laura Cohen, chief executive of British Ceramic Confederation: “BCC supports the environmentally responsible extraction of shale gas. We know gas will be needed for high temperature industrial processes and domestic heating until affordable alternatives are available.

“If gas or electricity is lost in an unplanned manner in many industrial processes, including our sector, there can be major safety issues, as well as damage to factories. Gas is also needed to back up wind and solar electricity generation.

“Even in the medium term, we believe UK shale gas production won’t reduce prices or security to the extent seen in America because of both the UK geology and interconnection to the continent. To improve energy security significantly, extra UK gas storage is necessary, combined with a public service obligation.”

“Glass manufacturers and glass users make significant contributions to the UK economy and produce a unique, versatile product that can be recycled indefinitely.

“Glass manufacture is a high temperature process which is totally reliant upon a secure and uninterrupted supply of energy to the melting furnaces. Increased and diversified indigenous energy supply is beneficial to the UK.

“Within this context, the glass industry supports the responsible exploration and production of shale gas in the UK subject to the following; the extraction of shale gas must be governed by suitably stringent environmental, health and safety precautions and compliance must be demonstrated; the use of shale gas must benefit the UK; the local communities that agree to accommodate extraction should also benefit from involvement; the tax taken from shale gas should in-part be used to support the development in low carbon generation; and the benefits of shale gas should be viewed as a logical step to a low-carbon economy and a step towards a more sustainable future,” British Glass Manufacturer’s Confederation