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Ineos has made no secret of its interest in shale gas
Chemicals giant Ineos has announced plans to invest up to £640m in shale gas exploration in the UK.
The company plans to use the gas as a raw material for its chemicals plants, including Grangemouth in Stirlingshire.
Grangemouth is currently running at a loss, but Ineos believes shale gas will transform the economics of the plant.
Shale gas extraction is promoted as an important potential energy source, but has sparked opposition from environmental groups.
Shale gas is extracted through a technique known as fracking, or hydraulic fracturing, in which water and chemicals are pumped into shale rock at high pressure.
Numerous anti-fracking groups have formed and protests have been staged at several sites over fears of earthquakes, water pollution and environmental damage.
Ineos is currently building Europe’s largest shale gas import facility to feed its petrochemicals plant at Grangemouth – but it wants to produce home-grown shale gas as well.
In recent months it has been buying up rights to explore across hundreds of square miles of the Midland Valley around the Stirlingshire site.
Ineos is also thought to have applied for further licences as part of the government’s ongoing onshore licensing round.
The company outlined plans on Thursday to invest hundreds of millions pounds in UK exploration.
“I believe shale gas could revolutionise UK manufacturing and I know Ineos has the resources to make it happen, the skills to extract the gas safely and the vision to realise that everyone must share in the rewards,” said Ineos boss Jim Ratcliffe.
The firm added that “substantial further investment would follow if the company moved to development and production”.
BBC industry correspondent John Moylan said the move will be seen as a significant vote of confidence in the sector, and will position Ineos as one of the major players in the emerging industry.
But, he added, it will also put Ineos in the sights of protesters who believe shale gas and fracking are dangerous and harmful to the environment.
A spokesman for Greenpeace UK characterised Ineos’ investment as “giant speculative bets on unproven and risky resources”.
“It seems that Ineos have based their business plan on breathless PR brochures rather than scientific reports,” he added.
Shale gas sites in UK.
Earlier this year, Ineos announced plans to hand over up to £2.5bn of shale gas revenues to communities close to its wells.
The company has bought the licence for shale gas exploration and development across a 329sq km area around its Grangemouth power plant.
It will give away 6% of revenues to local homeowners and landowners.
However, Friends of the Earth Scotland criticised the move as “a transparent attempt to bribe communities”.
The British Geological Survey has estimated there are “modest” shale gas and oil resources in the area.
Fracking is used extensively in the US where it has revolutionised the energy industry.
The Scottish government has called for devolved powers on fracking after the UK government decided to press ahead with plans to let companies drill at depths of 300m below private land without consent.
Analysis: John Moylan, BBC Industries Correspondent
This sounds like a huge investment by Ineos.
But any firm wanting to bring shale gas from the exploration stage through to full production will have to spend hundreds of millions of pounds.
An industry report earlier this year suggested that a single shale gas production site with 10 wells might cost as much as £350m. So firms intending to have multiple gas production sites will have to spend eye-watering sums.
But the timing of this announcement is key. The government is currently assessing applications made by operators for new onshore licences to explore for shale gas.
Firms have to demonstrate that they have the cash and know-how to exploit a license area. If this has been a competitive license round – and there’s a suggestion that this is the case – then firms like Ineos will have to lobby hard to ensure they get the areas that they want.
There could be more announcements like this from other industry players in the weeks and months ahead.
- Ministers’ shale gas ‘hype’ attacked
- Fracking regulations ‘too strict’
- Fund proposed for shale gas revenues
Recent changes to the law, enabling companies to frack beneath landowners’ properties without their permission, have fuelled resistance to fracking in Britain, says author and activist.
Naomi Klein speaking to Owen Jones about her most recent book This Changes Everything: Capitalism vs the Climate at a Guardian Live event. Photograph: Guardian talks
Adam Vaughan reporting,
Ministers’ rewriting of the law to allow fracking to happen beneath people’s homes without their permission flouts basic democratic rights, according to Naomi Klein.
The author and activist said that the UK government’s changes to trespass laws, to speed up the ability for shale gas companies to frack beneath landowners’ property, was energising resistance to fracking in Britain.
“What is animating the anti-fracking movement? Yes, it’s water. It’s also a defence of democracy. The fact the government is colluding with energy companies to force the right to frack underneath people’s homes without their permission flies in the face of the most common-sense definition of democracy and self-definition,” she told an audience at a Guardian event in London on Monday.
A consultation over the summer on the trespass law found that 99% of the 40,000 people who responded objected to the changes. But government officials said they would go ahead with the law change, as “no issues have been identified that would mean that our overall policy approach is not the best available solution.”
Naomi Klein discusses her most provocative book yet, This Changes Everything: Capitalism vs the Climate.
Klein, whose new book addresses how capitalism is holding back efforts to tackle climate change quickly enough, said that shale gas and oil companies were being met by a global movement whose growth was incredible.
“The movement against fracking has been heroic. We are starting to see the kind of resistance where people have those stakes you’re talking about,” she told the event’s chair, Guardian columnist Owen Jones. “People get involved in fighting fracking not because of climate change but because they’re worried about their water. Water is what unites so many of these movements, whether it’s against tar sands, pipelines or fracking, coal mining, it’s water and love of place.”
Klein highlighted the series of climate marches around the world in September, which saw more than a reported 400,000 people out in New York and tens of thousands in cities including London, Paris and Melbourne, as a cause for hope. “I was tremendously gratified by what just happened in New York.”
She said it was not just the scale of the march in New York that had impressed her but the diversity, made up of local communities who had been hit by superstorm Sandy, indigenous people fighting tar sands developments, anti-fracking campaigners and what she described as the first time the Labor movement was out in force, calling for job creation in response to climate change.
“To me, it was not just the size of it, this march had a quality to it that I’d never seen at a mass environmental demonstration,” she said, adding to applause: “I think we need to be very clear about this – the only way you can win against forces with a huge amount to lose is to build a movement of people, many more people, with a huge amount to gain.”
The author also argued that rallying around action on climate change would be one of the most powerful ways to tackle austerity, by creating a case for investment in low carbon infrastructure from public money and taking energy ownership away from the ‘Big Six’ energy companies who she said had failed the UK. “This is our chance to liberate ourselves from the brutalising logic of austerity,” she said.
“Climate is the big tent we’ve been waiting for, and why wouldn’t it be, the atmosphere is the biggest tent of all, we’re all under it and we need to start acting like it.”
Ministers reject 40,000 objections to allow fracking below homes without owners’ permission.
by Damian Carrington.
Prime minister David Cameron during a guided tour of the IGas shale drilling plant near Gainsborough, Lincolnshire. Photograph: Lindsey Parnaby/PA
Fracking will take place below Britons’ homes without their permission after ministers rejected 40,000 objections to controversial changes to trespass laws.
The UK government argued that the current ability for people to block shale gas development under their property would lead to significant delays and that the legal process by which companies can force fracking plans through was costly, time-consuming and disproportionate.
There were a total of 40,647 responses to a consultation on the move to give oil and gas companies underground access without needing to seek landowners’ permission, with 99% opposing the legal changes. Setting aside the 28,821 responses submitted via two NGO campaigns, 92% of the remaining responses objected to the proposals.
The government response to the consultation, published online on the eve of the parliamentary vote on military strikes against Islamic militants in Iraq, concluded: “Having carefully considered the consultation responses, we believe that the proposed policy remains the right approach to underground access and that no issues have been identified that would mean that our overall policy approach is not the best available solution.”
New laws will now be passed giving automatic access for gas and oil development below 300m and a notification and compensation scheme will be run by the industry on a voluntary basis.
Should fracking trespass laws be changed?
“It is essential that we make the most of home-sourced energy and start exploring the natural energy supplies beneath our feet. As the cleanest fossil fuel shale gas provides a bridge to a much greener future,” said a statement from the Department of Energy and Climate Change. “By removing barriers to deep underground drilling access, we are speeding up oil and gas and deep geothermal energy exploration. ”
The Conservative energy minister, Matt Hancock, said: “These new rules will help Britain to explore the great potential of our national shale gas and geothermal resources, as we work towards a greener future – and open up thousands of new jobs in doing so.”
“This is an important day for the future of energy supply in the UK,” said Ken Cronin, chief executive of the industry’s trade body, UK Onshore Oil and Gas (UKOOG). “Landowners on the surface will not notice this underground activity [usually a mile deep] and it will have no impact on their day-to-day lives.”
But Green Party MP Caroline Lucas said: “This sham consultation exposes the government’s disregard for the growing public concern about the major environmental and health risks of fracking. The decision to deny people the right to say no to fracking under their own homes is outrageous. It shows that ministers are putting the greed of oil and gas companies above the public interest in tackling climate change.”
Simon Clydesdale, from Greenpeace, said: “The roar of opposition to this arrogant policy is deafening, yet ministers are determined to blithely ignore what the overwhelming majority of the British public thinks and wants. There will be a hefty political price to pay for this massive sell-out to the narrow interests of the shale lobby.”
Friends of the Earth’s Jane Thomas said: “This government seems hell-bent on fracking irrespective of widespread opposition. You’d think with a general election approaching politicians would listen to public opinion and get behind the popular energy solutions of cutting waste and backing renewables.”
The changes to the trespass laws were also criticised by Scotland’s energy minister Fergus Ewing: “UK government proposals to remove the right of Scottish householders to object to drilling under their homes, without so much as debate in the Scottish parliament, flies in the face of Scotland’s cautious, considered and evidence based approach on this issue. It is also fundamentally an issue affecting land ownership rights.”
In January, another controversial pro-fracking legal change was passed in the face of overwhelming public opposition. The change, which ditched the requirement to notify homes individually of future shale gas operations, was criticised by a Lords committee as having been rushed through without proper parliamentary scrutiny.
Fracking companies will still need to obtain regulatory permissions, such as planning and environmental permits.
Earlier in September, the planning committee of the South Downs National Park Authority voted unanimously to reject an application by Celtique Energie to undertake exploratory drilling as a precursor to fracking at Fernhurst in West Sussex.
By Neela BanerjeeTanker trucks for hauling water and fracking fluids line up near a natural gas flare in Williston, N.D. Fracking has touched off a nationwide oil and gas boom, and with it, worries about public health and the environment. (Charles Rex Arbogast / AP)
Energy companies are fracking for oil and gas at far shallower depths than widely believed, sometimes through underground sources of drinking water, according to research released Tuesday by Stanford University scientists.
Though researchers cautioned their study of hydraulic fracturing, or fracking, employed at two Wyoming geological formations showed no direct evidence of water-supply contamination, their work is certain to roil the public health debate over the risks of the controversial oil and gas production process.
Fracking involves high-pressure injection of millions of gallons of water mixed with sand and chemicals to crack geological formations and tap previously unreachable oil and gas reserves. Fracking fluids contain a host of chemicals, including known carcinogens and neurotoxins.
Fears about possible water contamination and air pollution have fed resistance in communities around the country, threatening to slow the oil and gas boom made possible by fracking.
Fracking into underground drinking water sources is not prohibited by the 2005 Energy Policy Act, which exempted the practice from key provisions of the Safe Drinking Water Act. But the industry has long held that it does not hydraulically fracture into underground sources of drinking water because oil and gas deposits sit far deeper than aquifers.
The study, however, found that energy companies used acid stimulation, a production method, and hydraulic fracturing in the Wind River and Fort Union geological formations that make up the Pavillion gas field and that contain both natural gas and sources of drinking water.
“Thousands of gallons of diesel fuel and millions of gallons of fluids containing numerous inorganic and organic additives were injected directly into these two formations during hundreds of stimulation events,” concluded Dominic DiGiulio and Robert Jackson of Stanford’s School of Earth Sciences in a presentation Tuesday at the American Chemical Society conference in San Francisco.
The scientists cautioned that their research, which is ongoing and has yet to be peer-reviewed, “does not say that drinking water has been contaminated by hydraulic fracturing.”
Rather, they point out that there is no way of knowing the effects of fracking into groundwater resources because regulators have not assessed the scope and impact of the activity.
“The extent and consequences of these activities are poorly documented, hindering assessments of potential resource damage and human exposure,” DiGiulio wrote.
Underground sources of drinking water, or USDWs, are a category of aquifers under the Safe Drinking Water Act that could provide water for human consumption.
“If the water isn’t being used now, it doesn’t mean it can’t be used in the future,” said DiGiulio, a Stanford research associate who recently retired from the Environmental Protection Agency. “That was the intent of identifying underground sources of drinking water: to safeguard them.”
The EPA documented in 2004 that fracking into drinking water sources had occurred when companies extracted natural gas from coal seams. But industry officials have long denied that the current oil and gas boom has resulted in fracking into drinking water sources because the hydrocarbon deposits are located in deeper geological formations.
“Thankfully, the formations where hydraulic fracturing actually is occurring…are isolated from USDWs by multiple layers and often billions of tons of impenetrable rock,” said Steve Everley, a spokesman for Energy in Depth, an industry group.
Industry officials had not seen the Stanford research.
DiGiulio and Jackson plotted the depths of fracked wells, as well as domestic drinking water wells in the Pavillion area. They found that companies used acid stimulation and hydraulic fracturing at depths of the deepest water wells near the Pavillion gas field, at 700 to 750 feet, far shallower than fracking was previously thought to occur in the area.
“It’s true that fracking often occurs miles below the surface,” said Jackson, professor of environment and energy at Stanford. “People don’t realize, though, that it’s sometimes happening less than a thousand feet underground in sources of drinking water.”
Companies say that fracking has never contaminated drinking water. The EPA launched three investigations over the last six years into possible drinking water contamination by oil and gas activity in Dimock, Pa.; Parker County, Texas; and Pavillion, Wyo. After initially finding evidence of contamination at the three sites, the EPA shelved the investigations amid allegations by environmentalists and local residents that the regulator succumbed to political pressure.
Jackson said the Stanford study’s findings underscore the need for better monitoring of fracking at shallower depths. “You can’t test the consequences of an activity if you don’t know how common it is,” he said. “We think that any fracking within a thousand feet of the surface should be more clearly documented and face greater scrutiny.”
The Stanford study focuses on Pavillion, in part because of DiGiulio’s familiarity with the area when he served as an EPA researcher in the latter stages of the Pavillion water study. Industry and the state of Wyoming questioned the EPA’s methodology after its 2011 draft report found the presence of chemicals associated with gas production in residents’ well water. In June 2013, the EPA turned over the study to Wyoming regulators, whose work is being funded by EnCana, the company accused of polluting the water in Pavillion.
The EPA study looked at whether chemicals migrated upward from fracked geological zones into people’s well water. The Stanford research does not explore the possibility of migration, focusing instead on the injection of fracking chemicals directly into geological formations that contain groundwater.
The EPA does not keep track of whether underground sources of drinking water have been hydraulically fractured as part of oil and gas development, said Alisha Johnson, a spokeswoman. “EPA does not maintain a database of all the wells being hydraulically fractured across the country,” she said in an email.
In their presentation, DiGiulio and Jackson noted that the EPA considers the Wind River formation and the Fort Union stratum below it to be underground sources of drinking water. The conventional image of tight geological formations where fracking occurs is that they are monolithic stretches of rock. But the scientists say the geology of the two formations is mostly sandstone of varying permeability and water.
“People think these formations are impermeable, and so they wonder, ‘Why are you worrying about water?’” DiGiulio said. “But it is an extremely heterogeneous environment, with areas of low and high permeability mixed together and with many lenses conducting water.”
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Matthew Hancock called for cuts to wind power subsidies while Liz Truss claimed renewable power was damaging the economy.
Britain’s new minister for energy, business and enterprise, Matthew Hancock, at 10 Downing Street. Photograph: Suzanne Plunkett/Reuters
The new set of Conservative environment and energy ministers announced on Tuesday bring a track record of opposing renewable energy, having fought against wind and solar farms, enthusiastically backed fracking and argued that green subsidies damage the economy.
New energy minister, Matthew Hancock, signed a letter to David Cameron in 2012 demanding that subsidies for onshore windfarms were slashed. “I support renewable energy but we need to do it in a way that gives the most value for money and that does not destroy our natural environment,” he said at the time.
Hancock, who takes over from Michael Fallon, also opposed new turbines in his Suffolk constituency, arguing: “The visual and other impact of the proposed turbines is completely unacceptable in this attractive rural corner of Suffolk.”
New environment secretary and former Shell employee, Liz Truss, dismissed clean renewable energy as “extremely expensive” and said it was damaging the economy during an appearance on BBC Question Time last October.
“We do need to look at the green taxes because at the moment they are incentivising particular forms of energy that are extremely expensive,” she said. “I would like to see the rolling back of green taxes because it is wrong that we are implementing green taxes faster than other countries. We may be potentially exporting jobs out of the country as our energy is so expensive.”
In 2009, as deputy director of the free-market thinktank Reform, Truss said energy infrastructure in Britain was being damaged by politicians’ obsession with green technology: “Vast amounts of taxpayers’ money are being spent subsidising uneconomic activity,” she said. Research from the London School of Economics recently concluded that green policies were not harming economic growth. (more…)