PETROCHEMICAL giant Ineos has said Scotland's economic fortunes could be "transformed" by fracking, but the nation is "losing out" as it fails to support the gas extraction technique.
The multinational, which employs about 1,300 staff and thousands more contractors in Scotland, confirmed it is concentrating it's fracking operation on England as it spoke out after the Scottish Parliament voted in favour of an outright ban on fracking north of the border in a shock defeat for the SNP government.
Labour tabled an amendment saying there "should" be a full ban as part of an environment debate headed by new cabinet secretary Roseanna Cunningham.
After SNP members abstained, the motion was passed by 32 votes to 29.
But petrochemical giant Ineos which owns the Grangemouth petrochemical plant and owns fracking exploration licences for large swathes of central Scotland, says Scotland is in danger of falling behind in the rest of the UK in embracing fracking.
Richard Longden of Ineos said it was moving its centre of excellence south and that "given the current position" geologists and petrochemical engineers from the firm are now "100 per cent deployed in England".
"Scotland’s economic fortunes could be transformed by fracking. Estimates suggest that the technology is capable of producing more gas than has been found in the North Sea. If you look at the latest UK geological survey, it makes the North Sea pale in comparison," he said.
"Ineos still hold licenses in Scotland but there is no activity taking place. Scotland is losing out as the centre of excellence moves south. "
The dramatic impact of falling North Sea oil prices and production was highlighted in October, last year when it emerged the UK Government made a loss from North Sea oil and gas during the first six months of the financial year. It is thought to be the first time the UK has recorded a loss over a six month period since the North Sea oil industry became established 40 years ago.
The Government collected £248 million in corporation tax and petroleum revenue tax but paid out £287million in rebates to producers hit by the downturn.
Mr Longden said:"Our focus is very much south of the border now. We have been talking to local communities and we find a quiet degree of support, because people know that it could transform employment prospects. But at the same time they are unwilling to put their heads above the parapet. They think it is a good thing, but they say so quietly.
"We are of the view that the peer reviewed research shows that provided it is properly managed, fracking is far safer than coal mining ever was. As energy from the North Sea, coal and nuclear declines the Scottish government will have to look to foreign importers if the lights are to be kept burning.
"Already, 60 per cent of the UK’s energy needs comes from abroad, as North Sea declines and renewable sources are not yet capable of closing the gap."
The SNP announced a moratorium on fracking in Scotland last January, but has stopped short of an outright ban to allow for further consultation and a public health impact assessment.
But the UK government has adopted a more pro-fracking stance and North Yorkshire county council recently approved an application by Third Energy to frack a well near the village of Kirby Misperton in Ryedale.
Mr Longden added: "Scotland is missing out on the opportunities presented by shale gas as tax revenues from oil are plummeting. It is in danger of falling behind the rest of the UK when it comes to the jobs and energy security and investment that can be created by the process."
United Kingdom Onshore Oil and Gas, the representative body for UK onshore oil and gas, was disappointed by the vote.
Ken Cronin, UKOOG chief executive, said: “The Scottish Government announced a process in January 2015 which included a research phase and then a public consultation phase. This is not due to finish until the summer of 2017.
“UKOOG and its members have been participating in this process from the beginning and will continue to do so. The process is meant to present the facts to the Scottish people and so we are disappointed today to see that some within the Scottish parliament are trying to derail it.
“We are confident as an industry based on over 50 years of experience both onshore and offshore that hydraulic fracturing can be done safely and environmentally sensitively within the regulatory environment in Scotland.
“We have had a well regulated industry in Scotland for many decades. We have drilled over 30 wells in the last 20 years. One of the first hydraulic fractures in the UK took place in Airdrie nearly 50 years ago and fracking also took place inside the Glasgow city boundary in 1989 at Easterhouse.
“The Oil and Gas Industry has made a huge contribution to the economy of Scotland. Onshore gas and oil will benefit the Scottish economy, not only directly, with jobs created through oil and gas extraction, but also indirectly, as oil and gas is a critical raw material for the chemicals industry at facilities such as Grangemouth.”
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