With the fast development of shale gas industries all over the world, we sat down with Tom Crotty of INEOS and Jonathan Shortis from DHL to ask: is it just a matter of time before shale becomes a major part of the UK’s energy mix?

 

Just a quick glance over the Atlantic and benefits of Shale gas are clear to see. Not only has the U.S approach to unconventional gas development resulted in a greater availability of gas; it has also caused a significant reduction in price.

 

And it’s not just consumers who are benefitting. The entire industry is beginning to thrive and assert its independence in the gas market. And it’s this that’s exciting major governments all over Europe.

The UK, in particular, has cast an envious eye at America. Having seen its own industry struggle in recent years, there has been an acceptance in government that the UK energy sector is too reliant on foreign factors to fully prosper.  

 

An independent industry that’s good for business

 

Tom Crotty, Director of INEOS, is clear in his mind about the real benefit of shale gas.

“For the UK gas industry to thrive it needs its own indigenous industry.”

 

Without shale gas development Crotty is convinced the UK would become a less competitive place for INEOS to do business. He explains:

 

“For petrochemicals this is a double issue because not only do we use the gas for energy but we also use the components of gas as the raw materials for building chemicals, so we use ethane particularly, and also propane as the building blocks.

 

We have just put a deal in place to import ethane from the U.S shale gas industry that will see us through the next 15 to 20 years. But beyond that time we need an indigenous source of UK gas if we are to be in business.”

 

Crotty isn’t claiming that shale gas is a golden ticket for the UK’s energy sector. And he’s right. Until companies begin ‘fracking’ and extracting gas (and analysing the quality of that gas) it’s impossible to say for sure the impact shale will have. But even the most conservative assessments indicate it could quickly become a major part of the mix.

 

You demand, we’ll supply

 

Interest in the UK’s shale industry isn’t limited to chemical manufacturing companies such as INEOS. Jonathan Shortis, of supply chain management giant DHL, revealed he’s keeping a close eye on the role of unconventional gas in the UK.

 

Shortis confirmed that DHL already has operations up and running in the U.S. and Latin America as well as in Asia Pacific region in both China and Australia and would be “keen to get involved” in any UK shale sector – whatever extraction process companies and their governments settle upon.

 

“Energy companies themselves will work with governments and if the governments decide to develop unconventionals then there’s a real means for professional logistics services to reduce the community and environmental impact, and that’s because the logistics required for unconventionals are much greater than for conventional oil and gas activity.”

 

Shortis was unconcerned about the pace of development of the UK market.

 

“It’s natural that the pace of development is dictated by environmental policy - but once the decision is made we’ll see development at a reasonable pace.”

 

When that decision will be made is up for debate but, for Shortis, shale gas’s potential to empower the UK’s energy sector isn’t.

 

“Unconventional gas development is a chance for countries to re-establish their independence. The benefits seen in the U.S mean that gas is now a true petro carbon food stock and has resulted in the associated growth in the petrochemical industry, particularly in the U.S Gulf.”

 

The multi-million pound question

 

Which brings us to the big question – just how big a part of the mix is shale gas going to be in the UK? Tom Crotty is in no doubt.

 

“Two years is too soon but I believe within the next five to ten years, shale is going to be a major part of the UK energy mix. Potentially shale gas is going to be the major source of UK gas over the next 15 to 20 years.”

 

But though the estimates look good, shale still has a lot of work to do to convince the skeptics. Crotty believes education and understanding are going to play key roles in the battle for public opinion.

 

“The analysis that I have seen so far suggests that roughly 20 percent of the population are strongly in favour of shale gas development, roughly 20 percent who are dogmatically opposed and about 60 percent who are undecided. It is about trying to ensure that 60 percent of people have the facts on which to base their judgments.”

 

If the government is determined to establish the indigenous gas industry the UK energy sector craves, then they’re going to have to engage that 60 percent sooner rather than later. Once they do surely it’s just a matter of time before shale becomes a major part of the UK’s energy mix.