For many decades we, as a society, have been exploiting naturally-occurring gas for use as a domestic and industrial fuel. Since the 1970’s, the UK and much of north-western Europe has mostly been extracting natural gas by giant rigs in the North Sea. There has also been some onshore extraction but this has supplied only a small percentage of our total consumption.
Natural gas is comprised mostly of highly-combustible methane, the element used as a fuel, with additional constituents including propane and ethane. Propane is also marketed as a fuel (think camping stoves!); but both propane and ethane are used as base materials (known as “feedstock”) in the manufacture of plastics. These fall into two main groups: polypropylene and polyethylene (or “polythene”, as it is more commonly known).
The Economics of Plastics: Fracking and Cracking
Plastics are created from the feedstocks of propane and ethane by a chemical process known as “cracking”. It is very energy-intensive, requiring large volumes of methane to produce the high temperatures needed. Thus it can be seen that, for a large plastics manufacturing company such as INEOS, it is a vital part of their economic viability to have a secure and (most importantly) a cheap supply of methane. If that comes in its “raw” form of natural gas then so much the better, since the gas also contains the feedstocks they use. This becomes even more significant when you consider that the global market for plastic materials and products is highly competitive, thus driving down prices.
For any company that relies on natural gas both as a source for its feedstock, and also for the fuel needed to convert that feedstock into a commercially saleable product, the question is what would be the best way to obtain a secure supply of natural gas as cheaply as possible? And INEOS’ answer to that question is: extract it ourselves.
With sources of conventionally-obtainable natural gas starting to dry up, INEOS have turned their attention to obtaining natural gas through Unconventional Hydraulic Fracturing (or “fracking”) of gas trapped in the shale layer of rock.
The Difference between Conventional And Unconventional Gas
What follows is an extract from Eckington Against Fracking’s monthly newsletter from March 2018:
As you can see, shale gas is much more difficult to extract than natural gas obtained through conventional drilling: fracking wells are also far less productive than conventional wells and it requires up to 50 times more fracking wells to obtain the same volume of gas compared to conventional drilling. So, it wouldn’t make economic sense for a petrochemicals company such as INEOS to extract shale gas by fracking only to hand it over to the National Grid: they would need to keep it all for themselves to use in their manufacturing processes.
In an attempt to win round public opinion, INEOS and the other fracking companies such as Cuadrilla are trying to make a case that the UK needs shale gas to “keep the lights on”. They say that if we don’t exploit shale gas then “our security of gas supply is at risk”. But many experts disagree and indeed, even the Government’s own Dept for Business, Energy and Industrial Strategy published a report entitled Gas Security of Supply (Oct 2017) which shows this not to be the case. The report said in its conclusions: “We are secure now, and the GB gas system is well placed to continue to be secure and robust in a range of supply and demand outcomes over the next two decades … Our security of supply does not depend on new indigenous supplies”. In other words, we do not need to even start fracking to secure our national future gas supply.
Fracking in the East Midlands is not about satisfying the nation’s demands for energy; it is about satisfying INEOS’ demands for a cheap source of fuel and feedstocks.