Ineos secures Scotland’s only fracking licence

GRANGEMOUTH plant owner Ineos has bought the majority share of a shale gas exploration licence for Scotland in a deal thought to be worth tens of millions of pounds – a development it said was the “next step” towards fracking in the country.

Ineos' Grangemouth oil refinery. Picture: TSPL

Ineos has bought a 51 per cent share of the shale section of the Petroleum Exploration and Development Licence, increasing the likelihood of the controversial drilling technique used for extracting oil or natural gas from deep underground coming to Scotland. The other 49 per cent is owned by Dart Energy.

Fracking is credited with transforming the United States’ energy industry in the past decade, as the natural gas sector has collaborated with government to improve extraction methods.

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However, opponents of the technique have claimed that hydraulic fracturing, or fracking, can cause earthquakes, as well as creating the risk of poisoning drinking water. Fracking involves injecting water, sand and chemicals under high pressure into shale rock or coal beds to create cracks. When the pumping stops, the sand keeps the fractures open and the trapped gas escapes and can be collected.

The licence acquired by Ineos covers 329 square kilometres of the Midland Valley of Scotland, which includes the Grangemouth complex and the area around it, where infrastructure is being built to import shale gas ethane. Grangemouth bosses yesterday said Ineos was “making its first move into the shale exploration arena” as the deal was announced with the BG group – the gas and oil exploration arm of the old British Gas.

Ineos, which threatened to close the Grangemouth plant during a bitter industrial dispute last winter, is engaged in a $600 million (about £360m) project to bring shale gas ethane from the US to its petrochemical plants in Scotland and Norway.

No timescale has been given for when fracking might begin in Scotland, but the head of Ineos Upstream, the company’s new oil and gas exploration and production business, stated that it had already recruited specialists from the US.

Ineos Upstream chief executive Gary Haywood said: “We are one of very few businesses that can use shale gas as both a fuel and a petrochemical feedstock. Ineos is well-placed to become a major player in the UK onshore gas production sector.”

Holyrood’s energy committee convenor, Murdo Fraser, welcomed the deal, which he said would protect Scotland’s future energy supplies and create job opportunities.

He said: “I hope this will be a step forward in developing an unconventional gas capacity in Scotland.”

However, Scottish Green co-leader Patrick Harvie called on the SNP government to resist the practice, which he claimed was damaging to the environment.

He said: “We know that the UK government is pro-fracking. The Scottish Government needs to stand up to this as it has the powers to put the brakes on fracking. Exploiting fossil fuels is something we can’t afford to do. The priority should be a shift to renewables.”