In its bid to finally get a shale gas industry going in the UK, INEOS owner Jim Ratcliffe offered to build a fully functioning test site to demonstrate the technology’s safety.
His challenge is to win-over enough sceptics concerned about the environmental damage caused by drilling. Given the chance, INEOS sees itself as the competent operator to show shale is safe and drown out the “extreme vocal minority” that got the technology shot down in the first place.
Ratcliffe is timing his pitch well. After putting a moratorium on shale gas activity in November 2019 over potential earthquake risks, the UK government’s stance is wavering thanks to the impact of Putin’s invasion of Ukraine on energy markets. Earlier this month, the government deemed it was worth another look and commissioned the British Geological Survey to get on it.
Coupled with Ratcliffe’s hard-nosed approach to dealmaking, and notwithstanding some early wobbles in the early years, there is no denying INEOS has a knack for being at the right place at the right time. It would certainly be an interesting turn of events if Ratcliffe finally got to develop his shale licenses. We are probably only talking about tens of thousands of pounds of investment here but, for a while there, it did seem like it was shaping up to be a very unusual flop for INEOS prior to the invasion of Ukraine.
The returns could be huge.
INEOS claims the renewable technology isn’t yet reliable enough to take over and the UK will need gas for the next 30 years as it goes through the energy transition. With a domestic shale gas industry, the nation could be self-sufficient within a decade.
And Ratcliffe is right to point out that the energy crisis is driving people into fuel poverty, but given he switched his tax domicile to Monaco from the UK, some may feel he’s not on such a strong footing there.