The billionaire businessman Jim Ratcliffe slammed the Government’s plans to build a new nuclear plant at Hinkley Point yesterday as he unveiled plans to invest $1bn (£640m) in shale gas.
The owner of the chemicals company Ineos, who tried to shut down its Grangemouth refinery last year, said it will drill hundreds of wells across northern England and Scotland. “I want Ineos to be the biggest player in the UK shale gas industry,” he said. “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.”
Of the Government’s decision to build Britain’s first nuclear station since the 1990s alongside the French utility EDF, he said it had paid an “outrageous price”.
The two parties have agreed a “strike price” of £92.50 for every megawatt hour of energy that Hinkley C generates to protect EDF. That rate is almost twice the current wholesale cost of electricity.
Shale gas is extracted through a controversial process known as fracking, or hydraulic fracturing, in which water and chemicals are pumped into shale rock at high pressure.
Ineos plans to use the gas as a raw material for its chemicals plants, including Grangemouth in Stirlingshire. It is cheaper than other forms of energy production and the company hopes the process will help to turn around the loss-making Grangemouth, where the Unite union last year fought a battle with bosses over potential closure plans that would have led to the loss of 700 jobs.
At the time, Ineos’s plans to cut costs at the refinery, Scotland’s largest, included a pay freeze and slashed pension provisions. When staff rejected them, the company closed down Grangemouth until union members were forced to agree a three-year no-strike deal, as well as frozen pay and reduced pension entitlements.
Now Ineos reckons shale will help slash running costs further. The company, which is based in Switzerland, is already building one of Europe’s largest shale- gas import facilities to help power the Grangemouth petrochemicals plant, but it now wants to produce domestic shale gas as well.
Ineos has been buying up exploration rights across hundreds of square miles of land around the Stirlingshire site, including acquiring a stake in the shale portion of a licence covering more than 300 sq km of Scotland’s Midland Valley from the explorer BG Group.
Earlier this year, the company announced plans to give communities near the fracking sites up to £2.5bn of shale gas revenues – a move condemned by Friends of the Earth Scotland as “a transparent attempt to bribe communities”.
Reflecting on yesterday’s news, a spokesman for Greenpeace UK said Ineos’s investment was a “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,” the spokesman added.Reuse content