Tom Crotty

This article is part of the Spinwatch Fracking Portal and project

Tom Crotty is the external affairs director of Ineos UK, previously Chief Executive Officer of INEOS Olefins & Polymers Europe.

Views

The potential of UK shale gas for the chemicals industry

...on the quality issue, from a chemicals point of view, clearly, we like to see gas that is not just pure methane. It is the non-methane elements that are of value to us: it is the ethane and the propane. For example, in the US those elements are fractionated out and we can use them as raw materials to build chemicals with. We are hopeful that the UK shale deposits would allow us to do the same. As an industry in the UK, the problem we have at the moment is that the quantity of ethane coming out of the North Sea supply has declined dramatically in the last 10 to 15 years to the point where it is almost non-existent now. Therefore, getting a new localised supply would be a massive potential benefit.

Impact on gas prices?

In January 2013 Crotty responded to a question asked by the UK House of Commons Energy and Climate Change Committee about how shale gas might affect how gas is traded either globally or regionally and 'whether it might restrict the extent to which prices might otherwise rise in the European market?':

from our end we are obviously energy-intensive users. It is very difficult to know the degree of impact. Our view is there must be an improvement in liquidity. We would hope that improvement in liquidity would improve energy prices, but there is no guarantee of that. I suspect it will not be anything like as dramatic as we have seen in the US, because that is very much a liquids - driven issue. That is chasing oil with associated gas. But I think it will improve liquidity and, therefore, it should improve the market for large users like us.

My personal view is, yes. That is our biggest worry. But if you look at what is happening in the European market today, prices are rising inexorably. For producers of chemicals or steel, we find ourselves in an increasingly uncompetitive position as a result of those prices. Something needs to happen to address that. We would hope that, at a minimum, it would stop that further rise. I should say, from a chemicals point of view, we must not forget the other aspect of shale gas, which is potentially a key raw material for the chemicals industry, not from its energy content but from its chemical content. That has probably been the most transformational impact of it on the US chemical industry.

Meetings with ministers

In late 2016 Crotty met with secretary of state for business and energy Greg Clark. Clark wrote a follow-up letter, asking Crotty to further explain Ineos' tax status in the UK.