Shale Gas | Future of Gas

The potential for shale gas in the UK

Gary Haywood, CEO of INEOS Shale, gives his view on shale gas production in the UK

In America, shale gas has changed everything.

It was America which discovered the secret of unlocking the vast amounts of shale gas trapped deep underground – and, more importantly, the breakthrough technology to do it efficiently. Before the shale gas boom, America was importing huge amounts of oil and gas; today it is self-sufficient and exporting gas.

The petrochemical industry needs gas. It is a vital raw material which the industry uses to make the chemicals and plastics that go into the manufacture of everyday items that make our lives more comfortable. Thanks to competitively-priced shale gas, investment in new chemical manufacturing plants in America is booming.

Here in the UK, things are different. Production from the North Sea is in decline and Britain now imports more than 50% of the gas it needs from overseas. But it doesn’t have to be that way. A thriving, new onshore shale gas industry would displace some of those imports, pay UK taxes, provide UK jobs and community benefits, and help our balance of payments.

Over the next few years INEOS will gain a clearer picture of what’s under our feet

Although we know there are likely to be substantial deposits of shale gas in the UK, we don’t know whether it is commercially viable to extract it because very few exploration wells have been drilled into the shale layer. Over the next few years INEOS will gain a clearer picture of what’s under our feet in the areas where we have licences to explore. 2D and 3D seismic tests will help us with that, so too will the wells which will be drilled to extract samples of the shale rock for laboratory analysis of the gas content and rock structure. If that data is encouraging, horizontal wells will be drilled – and fracked – to test the gas flow.

INEOS has brought together a strong team with both UK and international exploration and production experience, and is prepared to invest significant sums in finding out if the shale gas resource is commercially viable.

As a global chemical company that operates with complex plants running 24 hours a day, safety is our prime concern.  Before we invested in UK shale gas, we researched the issues around extracting gas and satisfied ourselves that, within the operating and regulatory environment of the UK, shale gas can be extracted safely and without ruining the countryside.

As a nation, Britain will need and use gas for decades to come. For heating. For cooking. For making essential items, and also as the balancing mechanism in providing a stable and secure electricity supply. We don’t see the debate as one of renewables versus fossil fuels. We see gas as an enabler of renewable technology (lubricants, specialist coatings) and being part of the solution in us becoming a lower carbon society.

So it boils down to a choice: do we continue to import more and more gas to satisfy our needs, or do we produce our own gas, just as we have done from the North Sea, only this time onshore? We say the latter.

Gary Haywood is CEO of INEOS Shale, part of INEOS Upstream, a oil and gas exploration and production business.