This week petrochemical maker Ineos Group received the UK’s first shipment of shale gas from the US. The tanker, which contains ethane, docked at Grangemouth in Scotland and is part of the group’s $2bn investment to create a virtual pipeline across the Atlantic.
New arrivals, old debates
Reporting on the arrival of the tanker, which carried 27,500 cubic metres of ethane, Bloomberg’s
Anna Shiryaevskaya wrote: “The arrival of US shale gas comes as Britain debates its own stance on hydraulic fracturing, or fracking, a technology already shunned by most nations in mainland Europe.”
She added that while the Conservative Government this week renewed its promise to support shale gas and reduce dependency on importing, “the practice drew criticism from the opposition Labour Party as well as from the Green Party".
Ineos have stated that the ethane will be used in the group’s Grangemouth gas cracker as both fuel and feedstock, the report continued.
A domestic market
Writing for the International Business Times
, Gaurav Sharma reported Ineos CEO Jim Ratcliffe’s statement on the shipment. Ratcliffe claimed that the town had been on its knees before the project arrived and that similar investments would save the UK’s manufacturing sector.
“Were it not for this project, the refinery would have closed a long time ago. Today is nothing short of the beginning of a renaissance,” he said. “Furthermore, the development can help reverse the decline in UK manufacturing. We have the lowest levels of manufacturing to GDP ratio of any developed economy, with manufacturing accounting for less than 10% of GDP. Shale imported from the US and as well as domestic moves towards shale exploration could reverse that decline.” Ratcliffe’s company currently holds 30 shale exploration licences in the UK.
The Conservative Secretary of State for Scotland, David Mundell, also praised the job creation in Grangemouth: “This is a significant day for Scotland and the UK. The [Westminster] Government has been proud to support the project via our Infrastructure Loan Guarantee to the tune of £230m.”
International Business Times article
Old guard unsettled
Meanwhile, Sky News
reported calls for improved investment in the North Sea oil and Gas industry, citing the annual Economic Report
by Oil & Gas UK, which shows the fallout from the collapse in world’s oil prices. The report says that “the resulting scalebacks in investment by oil and gas firms would see supply chain revenues decline 31% over two years by the end of 2016, with the bulk of the loss this year”.
Oil & Gas UK's CEO Deirdre Michie is quoted: “The UKCS (UK Continental Shelf) is in urgent need of fresh investment to boost exploration and drive activity, particularly for the supply chain. Exploration has fallen to record lows and little new investment has been approved in 2016, and 2017 looks no better. Increased asset trading is one area that could free up new investment by facilitating the trading of late-life assets.”
Michie went on to call on the Treasury to create a more competitive tax regime and to permit tax breaks to be transferred when assets are sold on. However, the Government said it already offered tax breaks worth £2.3bn.
Sky News article
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