Swiss chemicals giant Ineos has announced it plans to invest $1bn in shale gas exploration in Britain, citing the UK government’s enthusiasm to use the new technology.
The investment, which will come if Ineos wins a shale gas license, would be used to conduct explorations across the UK, according to the company’s chairman, Jim Ratcliffe.
“I want Ineos to be the biggest player in the UK shale gas industry. I believe shale gas could revolutionize UK manufacturing and I know Ineos has the resources to make it happen,” he told a press conference in London.
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The British government have been keen to explore different areas of energy production, and have touted shale gas to be one of the dominant energy sources in the future.
Last year, Chancellor George Osborne announced tax breaks as large as 30 percent to the fracking industry, as a bid to start a “shale gas revolution”, despite warnings that the activities could increase carbon and toxic emissions.
AFP Photo/Mircea Restea
The Department for Energy and Climate Change (DECC) is currently assessing applications from energy companies who wish to explore the capabilities of shale gas, with licenses expected to be awarded early next year.
The CEO of Ineos Upstream, Gary Haywood, told Reuters that “hundreds of wells” would be drilled if Ineos won its contract, and that less than $10 million had been invested in UK shale so far.
The majority of the wells would be drilled in Scotland and northern England, although Ineos said its activities would create jobs and add £2.5 billion to local economies if it gets the go ahead.
However, environmental activists have been fiercely critical of energy companies’ plans to extract shale gas, saying the fracking process used to extract gas would pollute water supplies, deplete resources and even trigger small earthquakes.
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Ineos could face a huge backlash from environmental activists if they are granted a license. Last year, protests by activists against US energy giant Caudrilla forced the company to abandon its fracking operation in Balcombe, East Sussex.
Experts in the industry have also aired skepticism about the UK’s potential as a hotspot for shale gas production.
Earlier this month, the UK Energy Research Centre warned that hopes for a “shale gas bonanza” in the UK may have been overoptimistic, and that the energy source would have a minimal impact as Britain moved toward a low-carbon economy.
While the research center called shale gas an “important bridging fuel” over the next decade, it suggested the government needed to expand its investment in green energy and gas storage.