Disputed energy supply ready to dock

First shipment of shale gas due in Grangemouth


A container ship will make the first delivery of US shale gas into the UK today when a tanker docks in Grangemouth.

Ineos, the petrochemical company, will take 27,500 cubic meters of ethane extracted from Pennsylvania, one of the hotspots for shale gas production.

The company says it has to import the gas as supplies of gas from the North Sea are rapidly dwindling and it is forbidden from drilling for the gas onshore in Scotland through the process known as fracking.

The gas has therefore made a 3,500 mile journey via a “virtual pipeline” of eight tankers into the terminal at Grangemouth where the company has invested £450 million to feed it into “crackers” that convert the gas into ethylene, used to produce many household plastic products.

Ineos says that without the gas the process becomes unviable and 10,000 jobs would be at risk, including 1,300 at Grangemouth.

Controversy continues to surround the industry and protestors are expected to greet the ship.

Onshore fracking is subject to a moratorium imposed by the Scottish government and speaking at Labour’s annual party conference the shadow energy minister, Barry Gardiner, said the party would ban fracking and focus on low carbon energy sources if it wins the next general election.

Meanwhile, Switzerland based Ineos continues to prepare for a change of policy. It was awarded 21 licences in December, including sites in North Yorkshire, the north-west and east Midlands.

Ports in Norway, Portugal, and Spain have received shale gas shipments this year following the lifting of a ban on the export of US oil and gas, but the arrival of the Ineos Insight vessel will be the first to the UK.

Jim Ratcliffe, Ineos founder and chairman, said: “This is a hugely important day for Ineos and the UK. Shale gas can help stop the decline of British manufacturing.”

The company’s supporters say fracking would offer a cheaper alternative supply of energy and create a new industry offering thousands of job opportunities.

The Scottish government has commissioned independent research into unconventional oil and gas to considerthe environmental, health and economic impacts which will inform its “evidence-led approach” to the issue.

A report is due later this year, with the public consultation taking place during winter.

Mary Church, head of campaigns at Friends of the Earth Scotland, said: “It is completely unacceptable to attempt to prop up Ineos’s petrochemicals plants on the back of human suffering and environmental destruction across the Atlantic.

“The fact that Scottish public money is tied up in this project is disgraceful.”

Chris Lewis, Energy Advisory Partner, EY, said: “Securing the UK’s future energy supply requires exploring different options and their viability. Producing gas at home can reduce the UK’s reliance on imports and help bring energy bills down.

“We should not hamstring ourselves by dismissing the development of shale gas in the UK without first fully exploring how it can work and the potential economic prize on offer. 

“We need to address the concerns of local communities and build a domestic industry that can provide local employment and ensure the process is safe and minimises local disruption. 

“Countries such as Norway have established models that have allowed local economies to prosper from gas extraction. We should be properly considering all of the evidence and looking to build on that best practice.”

 > Mike Tholen, of trade body Oil & Gas UK, says 100,000 jobs have been lost directly and indirectly in the North Sea industry in the past two years.
However, there has been a 10% rise in production and the industry was confident of “turning the corner.”

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