Sector News

The first US shale gas sailed into Europe bringing controversy in its wake.

Ineos, the chemical group, said that its own gas carrier arrived in Norway on Wednesday with 27,500 cubic metres of American ethane on board. Shipments to Ineos’s UK refinery at Grangemouth are scheduled to start later this year.

“This is a strategically important day for Ineos and Europe,” said Jim Ratcliffe, chairman and founder of Ineos which has spent $2bn on different aspects of its import programme over five years.

“We know that shale gas economics revitalised US manufacturing and for the first time ever Europe can access this essential energy and raw material source too,” he added.

Ineos has chartered eight purpose-built vessels which it says will create “a virtual pipeline across the Atlantic” with gas from the Marcellus shale of Western Pennsylvania shipped out via an export terminal near Philadelphia.

Ethane is a component of natural gas that is separated out and can be turned into a liquid to make it easy to transport.

The gas is cooled to -90C for the seaward journey of 3,800 miles to Europe. Ineos says the US shale will “complement” the dwindling supplies of gas from the North Sea.

But the shipments have triggered rows about the British government’s own shale strategy which has faced drilling protests from locals and environmentalists at early sites such as Balcombe in West Sussex.

“This is pure industry hype typical of the masters of spin that Ineos attempt to be,” said Hannah Martin, Greenpeace campaigner. “One would imagine that they are talking up their exports of shale gas from the US to Europe in an attempt to make themselves seem like major and credible players in the UK shale market. But this certainly doesn’t mean that they will frack successfully here.”

Nick Grealy, an independent UK gas consultant, said that Ineos ethane import plans and existing liquefied natural gas (LNG) imports from other countries such as Qatar made no sense when there were known reserves under the ground in Britain.

“It is crazy to bring in this high carbon (due to shipping emissions) gas with no tax levied on it in Britain rather than producing our own shale. We are importing gas and exporting money,” he argued.

The gas from Ineos is not the first shipped out of the US. Last month that prize went to Cheniere Energy which exported LNG to Brazil. In the past exports of oil and gas were banned as the country was a net importer.

But the massive ramp up in US shale oil and gas production which has seen the price of both oil and gas plummet worldwide, has encouraged Barack Obama to change the law.

Environmentalists still fear that shale gas – whether from the US or Britain – will crowd out investment for renewables and undermine a rush away from fossil fuels of which it is one. But gas enthusiasts believe the fuel, much lower in carbon content than say coal , can act as a “bridge” to a lower carbon world.

By Terry Macalister

Source: The Guardian