A fair political assessment and the Dart CBM only promise will be an interesting one, look at their website it clearly states this, but where do you think UCG comes into this? I don't see how the gas going into Grangemouth and not into the system as an issue, INEOS are cutting out the middle man to reduce costs, keep the plant open and make it profitable. The gas they already use will stay in the system, thus increasing total supply.
RE: Read between the lines 1
PEDLs allow CBM and shale/tight gas, not UCG. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/361479/The_14th_Round_Q_and_A.pdf Q5: Will this licensing round include shale gas and oil? A: Yes. A PEDL licence grants exclusive rights “to search and bore for and get petroleum” in all the various stages of the full development cycle of oil and gas exploration, appraisal; production and eventually abandonment of the wells, however a PEDL licence grants no permission for specific operations. Alongside conventional onshore oil and gas exploration and development, the licence covers exploration and development of tight gas, coalbed methane (CBM), mine vent gas, oil shale and shale gas. A PEDL licence does not allow for underground coal gasification (UCG) or CO2 sequestration. DECC will only consider an application to drill after the operator has planning permission from the local minerals planning authority (MPA), or the local planning authority (LPA), has all the necessary permits from the relevant environmental agency are in place and the Health and Safety Executive (HSE) has had notice of and is satisfied with the well design. See the Regulatory Road Map https://www.gov.uk/government/publications/regulatory- roadmap-onshore-oil-and-gas-exploration-in-the-uk-regulation-and-best-practice
Read between the lines 2
We can now expect INEOS to lobby the Scottish Government for early and full approval, including influence with planners throughout affected areas in making their plans happen. This will no doubt be accompanied with veiled threats to the future of the INEOS Grangemouth Petrochemical facility and the local jobs should they not support INEOS shale gas plans. We finally arrive at the question in the title. Does last week's announcement, these plans generally, and the potential influence INEOS may hold to bear over the Scottish Government and local community councils result in a position where INEOS is more powerful than the Scottish Government? From a UK perspective, David Cameron has been open in his support for Shale Gas resource exploration and production, but this support is also from a perspective of shale gas providing a home grown resource entering the supply network and as an option to imported Russian gas. It is said that the announcement sits well with the coalition government, however, it is unclear as to whether the penny has dropped that this proposal and investment offers limited treasury value, the resource is raw material for INEOS processes and products and therefore profits, with gains being retained in Switzerland and no gas entering the supply network. So how do you realise the shale gas potential and safeguard the jobs and future of Grangemouth and other similar facilities without a gun to your head politically? Well the answer may be in the title, controversial as it may seem, politically, there may not be too many options. The Scottish Government of course, may be inclined not to follow Downing Street's lead on Shale Gas which is another factor, and fair to say their main concerns would sit with the refinery operations in Grangemouth as opposed to the Petrochemical complex as a whole. All of the above without consideration to the practicalities of shale gas well drilling, land purchase, only 1 in 5 wells being productive, limited scope for drilling due to communities, farming, crops and agriculture, lack of experienced competent resources and drilling/fracturing equipment etc but I imagine INEOS has a plan to deal with some of this at least. One thing is for sure, this will be a dynamic and exciting time with many highs and lows along the way keeping political, industry and local commentators busy for a while to come. This is written in good faith and to stimulate debate and opinion from other contributors.
Read between the lines 1
The news this week in the UK has been dominated to a certain extent (from a Shale gas perspective) by the announcement by Jim Ratcliffe, Billionaire founder of INEOS that they plan to invest £640 GBP ($1bn) in the exploration and production of shale gas for use as a feedstock within their facilities to allow them to compete on the global stage. Although all of this has been developing over the last 6-8 months, the timing has been deferred until after the Independence Referendum but there are a number of significant issues at hand. Firstly, and in relation to the INEOS Grangemouth Petrochemical facility, INEOS has invested in 2 License areas, PEDL133 50% share (Dart/IGAS) and an adjacent License PEDL162 80% interest (Reach Gas). INEOS has also applied for other Licenses. The planning application submitted by Dart Energy for PEDL133 was on the basis of "holes in coal - no fracking" for Coalbed Methane production. This in itself was defeated and went to appeal and now sits with the Scottish Government for their determination. The obvious issue is that this is nothing to do with Shale Gas. It may well be that Shale Gas is covered under differing License criteria from that of Coalbed Methane (not known by the writer), and exploration and appraisal for shale well drilling would be subject to new planning applications for well sites and other facilities in any case. With only 50% influence, the incumbent License area holder (Dart/IGAS) would be seen as going back on their word of "zero fracking". So there's something of an issue to overcome here. What is equally interesting is that Dart Energy's planning application was based on the produced gas being treated and compressed and put into the gas network. At least the public, or larger communities and industries of Scotland (in reference to the aforementioned License areas) would see some benefit from the security of a home grown energy resource. With the INEOS proposal, this resource is destined to be used as a feedstock to generate greater revenue and profits for INEOS and Jim Ratcliffe. This moves the goalposts considerably and offers no security of resource supply to the local or general communities. With the 6% community "carrot" proposed by INEOS from revenues of shale gas production, (also how would this be calculated?) it is unlikely that the community would be sympathetic in further shoring up the fortunes of one of the world's richest men, especially appreciating INEOS's recent domicile move to Switzerland for "tax efficiency" purposes. Acceptance may have been forthcoming had the gas been entering the supply network and had energy bills continued to rise or supply be at risk from Eastern European activities. We can now expect INEOS to lobby the Scottish Government for early and full approval, including influence with planners throughout affected areas in making their plans happen. This will no doubt be accompanied with veiled threats to t
Lots of buys
Yesterday but tiny volume, this indicates to me that the herd has not yet arrived, strong fundamentals at this point but still need the funding. Given that Algy is directly involved here and INEOS' recent announcement I'm 100% certain this will be solved in the coming months. I'm ready to pump a bit more in here, just need to figure out what to sell!
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