The Courier & Advertiser (Fife Edition)
‘Hugely important day’:
Scotland welcomes its first US gas shipment
INEOS chairman Jim Ratcliffe was delighted as the first shipment of US shale gas arrived in Grangemouth. Picture: SWNS.com.
INEOS welcomed its first shipment of US shale gas to Grangemouth yesterday in what chairman Jim Ratcliffe described as “a hugely important day” for his company and the UK.
He said the $2 billion investment will safeguard the future of Scotland’s biggest industrial site and the 10,000 jobs that depend on it for the next 20 years.
The massive Dragon-class INEOS Insight brought 27,500 cubic metres of ethane to the Forth from shale fields in Pennsylvania where it had been produced by the controversial technique of fracking
High winds prevented the 180-metre long vessel from docking and discharging its cargo and the operation has been rescheduled for high tide today.
Despite the glitch, the mood of INEOS was one of confidence and relief that their “virtual pipeline” of low-cost ethane from the US to Europe had been opened.
Mr Ratcliffe did admit to some disappointment that no Scottish Government minister had chosen to attend the historic occasion.
Holyrood has imposed a moratorium on fracking until it has examined its potential environmental, health and economic impacts to inform its “evidence-led approach” to the issue.
The UK Government is backing the practice of injecting water, sand and chemicals into the rock at high pressure to produce shale gas. Scottish Secretary David Mundell was at Grangemouth yesterday.
INEOS intends to eventually use eight Dragon class tankers to ship US shale gas to Europe, as it replaces the reducing gas extracted from the North Sea.
Mr Ratcliffe said: “We are excited about the kickstart shale gas can give to UK manufacturing.”
He said the “hugely ambitious project” which had taken five years was a world first and he was incredibly proud of everyone who had been involved it in.
Ethane, when converted to ethylene by cracking, is a vital ingredient in the petrochemical industry and has many applications in the manufacturing sector.
With supplies from conventional extraction reduced and a block on shale gas production by fracking, INEOS has turned to the United States.
Safely produced low cost shale gas has been a huge boost for the viability of its manufacturing industry, he stated, with the cost of the vital fuel being cut by as much as 75%.
INEOS said British industry now has the chance to benefit from US shale gas economics which did so much to revitalise manufacturing in that country.
“Production costs in the US have been lowered so much that investment has increased and prosperity has risen,” Mr Ratcliffe stated. “The UK now has that same opportunity.
“Manufacturing in the UK now accounts for about 10% of the country’s GDP when it used to account for 25% which is the same as Germany’s,” he continued.
“We need to stimulate our manufacturing sector for the sake of our economy and low cost shale gas can do that. Without a bigger manufacturing sector we have to rely on our service sector but that is too fragile a basis for building a strong economy.
“With lower cost shale gas we can boost manufacturing and transform the former industrialised areas of the UK like Grangemouth and parts of northern England which have gone into decline.”
The INEOS chairman described Grangemouth as “the heartbeat of the Scottish economy” and had the potential to trigger a revival of the country’s fortunes with government support.
Asked about the SNP Government’s position on fracking, he said: “I understand their sensitivity but I do hope common sense prevails.
“There is a vocal minority who are objecting to fracking but we have conducted our own consultation with communities and have found a silent majority who are in favour of it.
“People here, just like in the United States, see it as a way to revive their communities, boost industry and provide jobs and prosperity.”
Mr Ratcliffe accepted that fracking in the North Sea may not be economically viable, but he added: “Let us at least be allowed to do the exploration.”
It is hard not to be impressed by the scale of the project undertaken by INEOS – and attracted by the potential economic benefits.
It is a monumental vote of confidence in a site eloquently described by company chairman Jim Ratcliffe as “the heartbeat of the Scottish economy.”
That beating heart can grow stronger for the country’s benefit if shale gas can be viably harvested nearer home – like in the Forth Estuary and off the Fife coast.
The Scottish Government is uneasy about that possibility owing to strongly expressed concerns about the potential harm fracking may cause to the environment.
Fracking did leave scars on the landscape in parts of the United States and Australia but there is evidence that the industry learned lessons from these episodes.
It has certainly been productively developed in the United States where it has fuelled a revival of the manufacturing industry - a vital wheel in any nation’s economic machine.
Mr Ratcliffe understood the sensitivity of the issue for the Scottish Government and accepted the environmental path is one on which it should tread warily.
But, he argued, should it not at least take a few steps on the path by allowing exploratory tests at sites to see if Scotland has reserves of shale gas that are, in his word, “producible.”
The Scottish Government’s moratorium does not make that possible, and the Labour and Green Parties are even more opposed.
Is that the correct approach? INEOS certainly doesn’t think so and more people are coming round to that view.
One interesting contribution to the debate came from the GMB Union.
Its regional secretary Gary Smith stated: “Hundreds of millions have been invested in Grangemouth. Tens of thousands of jobs depend on the site – calling for imported fracked gas to be stopped is campaigning for mass unemployment in central Scotland.”
Is that not a reason to at least have trials to see if Scotland can have its own shale gas industry?