Fracking: Ineos to invest £640m in UK shale gas exploration
Move seen as a 'significant vote of confidence' in new sector but likely to anger anti-fracking activists
Chemicals giant Ineos is expected to announce plans today to invest £640m in exploring and producing shale gas in Scotland – a move seen as a "significant vote of confidence" in the emerging sector.
The company wants to use the gas to supply its chemical plants, including Grangemouth in Stirlingshire, which supplies about 70 per cent of the fuel sold in Scotland's filling stations.
Ineos, run by British businessman Jim Ratcliffe, with headquarters in Switzerland, hopes to transform the economics of Grangemouth, which is currently running at a loss.
BBC industry correspondent John Moylan says the move will be seen as a significant vote of confidence in the sector and positions Ineos as one of the major players in the emerging industry.
However, it could also put Ineos in the firing line of protesters, who believe the fracking process needed to extract shale gas is dangerous and harmful to the environment.
Fluids are forced at high pressure into shale rock underground to release the natural gas trapped inside. Anti-fracking groups staged protests against an exploratory well near the Sussex town of Balcombe last year, raising concerns about the huge amount of water used, the risk of earth tremors and potentially carcinogenic chemicals polluting groundwater.
Ineos has said that shale gas is an opportunity the European Union "cannot afford to turn down" if it wants to compete with America, where access to shale gas has slashed energy prices and "fuelled its industrial revival".
The company has already announced plans to pay six per cent of its fracking revenues to homeowners living above its operations in the UK. It said the giveaway is likely to be worth around £2.5bn over 10 to 15 years, but critics condemned the proposal as "more bribes and bulldozers".
Earlier this week, British artist David Hockney lent his support to fracking, arguing that the British need for energy outweighed the negative impact of the process.
Fracking: what you need to know
What is fracking?
The process involves drilling down into the earth and injecting shale rock with a high-pressure mixture of water, sand and chemicals to release the gas inside. The word "fracking" is short for hydraulic fracturing. Estimates suggested there could be as much as 1,300tn cubic feet of shale gas lying under 11 counties in central and northern England. This would equate to more than 500 years of gas supply for the UK. However, no fracking is currently taking place and drilling firms must apply for a licence if they wish to carry out the process in the future.
Why is it so controversial?
Environmental campaigners have raised concerns about the huge amounts of water needed to carry out fracking and are worried that the process can cause small earth tremors, such as the two small earthquakes of 1.5 and 2.2 magnitude that hit the Blackpool area in 2011. Another concern is that potentially carcinogenic chemicals used may escape and contaminate groundwater around the fracking site. Campaigners believe the government should invest in renewable energy rather than continuing to rely on fossil fuels. The industry says the small number of pollution incidents seen in the United States, where fracking is used extensively, is down to bad practice, rather than an inherently risky technique. The potential use of fracking in the UK has led to protests around the country.
How is the government promoting fracking?
In January David Cameron pledged to allow English local authorities to take all the business rates collected from shale gas schemes – rather than the usual 50 per cent. The government says these projects will support 74,000 jobs and reduce energy bills, but Greenpeace described it as "a naked attempt by the government to bribe hard-pressed councils into accepting fracking in their area".
Fracking: ministers tighten rules as bidding process opens
Energy companies are being invited today to bid for fracking licences in the UK, as ministers clarify the rules on where the controversial drilling can take place.
The government is due to unveil new planning guidance, making it harder to drill in national parks and areas of outstanding natural beauty.
Firms will be asked to submit a "particularly comprehensive and detailed" environmental statement with their applications if they want to frack on or near protected countryside. These applications will be refused in all but "exceptional circumstances and in the public interest".
The Guardian says the competition for licences is likely to attract "significant interest from energy companies keen to explore Britain's new-found shale reserves, particularly in the Bowland basin of the north-west, a central belt of Scotland and the Weald in the south-east".
With more than half of Britain open to fracking, the move is expected to face controversy. Since experts confirmed the scale of the UK's shale resources, campaigners have been protesting in areas such as Blackpool and Balcombe about the impact of fracking on the landscape, drinking water and environment.
Green Party MP Caroline Lucas, who was arrested for protesting in Balcombe last year, is among those disappointed that there is no outright ban on fracking in protected areas.
"Many campaigners have campaigned for decades to get national park status, and they are given for a reason. The idea that they could be offered up to the fracking firms is a scandal," she said.
But Matthew Hancock, the newly appointed Tory energy minister, told the Sunday Times that fracking has to be fast-tracked to give Britain greater energy security and protect it from Russian aggression. He warned that tensions with Russia following the downing of flight MH17 meant Britain should seek to become energy self-sufficient.
Fracking: PM to offer £800k payouts to soothe opponents
Fracking compensation is to be increased as a new report reveals that southern England is likely to be sitting on several billion barrels of oil.
The report, by the British Geological Survey (BGS), is likely to confirm substantial reserves in areas such as Kent, Sussex, Surrey and Hampshire.
Prime Minister David Cameron is due to announce a compensation package later today for those affected. Communities will reportedly be offered average payouts of £800,000, on top of a one-off payment of £100,000 and a one per cent share of profits, reports The Times.
The BGS has already suggested there could be enough shale gas in the north of England to supply Britain for 40 years. However, it remains to be seen whether extracting the reserves is economically viable.
Ministers claim the process could bring down energy bills and create thousands of jobs, but environmental activists are bitterly opposed to the technique. Opponents say the process can cause small earthquakes and pollute water supplies.
The government is preparing to introduce changes to the trespass laws that would make it easier to begin fracking while tax breaks have already been put forward. Energy companies have been reluctant to begin drilling in Britain until the government amends the legislation.
The legal changes would mean fracking companies have the right of automatic access below 300m underground, far deeper than those granted to gas or electricity companies.
In its editorial today, the Daily Telegraph says fracking has "the potential to boost Britain's economy dramatically". But it says that in order to endorse drilling "individuals and communities need to see the material benefits".
Business Secretary Vince Cable told Sky News that people involved in the fracking debate appeared to be "over-reacting in both directions". He said fracking is neither a "miracle round the corner" nor a reason to be "terrified" that it is going to pollute and compromise the environment.
Fracking: Total invests £30m in controversial shale sector
FRENCH energy giant Total has today announced plans to invest in Britain's shale gas sector, a deal believed to be worth £30m.
The company has bought a 40 per cent stake in two exploration licences in the Gainsborough Trough, a geological basin in Lincolnshire, east England and will help fund the site's exploration programme. But environmental campaigners have attacked the plans, accusing the UK government of ignoring the risks of fracking, the process used to extract gas from shale rock beneath the ground.
What is the significance of the Total investment?
It is the first major oil company to invest in Britain's fledgling shale sector, says the Financial Times, and the deal will be seen as "a big vote of confidence" for the industry, which is being heavily promoted by a government keen to replicate the success of the US shale boom on British soil.
Will the Total deal spark more protests?
Hundreds of protesters turned out at a fracking site in Barton Mass, Greater Manchester, yesterday. But their efforts seem unlikely to halt the tide of interest among corporations and the government, says The Guardian. Other energy giants seem likely to follow in the footsteps of Total, says the newspaper, with whispers that Chevron, Conoco and Shell could soon follow.