The INEOS Insight, holding 27,500 cubic metres of shale gas, docked at Grangemouth in Scotland last week. As a vessel it is as impressive as it is imposing, and yet it is also a tangible symbol of the confusion in Britain’s industrial policy.
Manufacturing as a share of UK GDP has halved in the last 10 years – something that communities up and down this country can attest to. One of the culprits behind this decline has been uncompetitive energy costs, with the price we pay for natural gas double that in the US and with our electricity prices for heavy industry among the highest in Europe.
These costs pose a massive disadvantage for UK industry but are also symptomatic of a wider problem. The UK is facing an impending energy crisis. The last coal plants in this country will be shut down by 2025 with no specific replacement identified. Meanwhile, the government has largely abandoned renewable projects (still too costly to have their subsidies removed) in order to pursue nuclear energy at Hinkley Point.
It is this situation that mandates the widespread use of natural gas throughout our economy. Gas is keeping the lights on, our homes heated and manufacturing going. However, production of gas from the North Sea is in freefall and the UK now imports nearly 60 per cent of its gas from abroad – a proportion that is both rising and increasingly coming from unstable and undemocratic regimes.
It could be so different. The US economy has been transformed by the exploitation of on-shore shale gas and the UK has the same opportunity. This gas can be extracted safely and without damage to our treasured rural landscape just as it is today in the Marcellus shale field in rural Pennsylvania. This one resource now produces 2.5 times the UK’s gas consumption each day. The coming shale gas shipments to the UK show that we need this fracked gas. And yet we are happy to pay the financial and carbon costs of import rather than do it here ourselves, reap the rewards and at the same time impose our world-leading environmental and safety standards.
To harness the same benefits seen in the US, we need to show leadership now and ensure investment goes to our communities and workers instead of leaving the country. To make this happen, now is the time for action. But not the action we saw last week from the Labour Party. To coincide with the arrival of the Insight, Labour renounced the benefits of shale by pledging to ban fracking in the event that they win the next general election. The GMB union called Labour’s decision “madness”.
I cannot conceive of a worse betrayal of the industrial communities of this country than to deny this potential lifeblood to UK manufacturing. Shale gas can be the difference between more closures like Redcar and Port Talbot and the flourishing of UK industry.
This week I am at the Conservative Party conference to call on the government to work with the shale industry to kick-start our economy and show Labour’s sclerotic energy plans for the economic sabotage that they are.
Gas is critical for the UK and we need to develop our own resources to ensure that we can all continue to enjoy the lifestyle that we have come to expect, whatever Brexit and the wider future may bring.
We would ask that the governments in London and Edinburgh show the same courage to do what is right for this country despite opposition from a vocal minority. Leadership now can see Scottish, Welsh and northern communities reap the benefits and end a vicious circle of decline. Let’s not waste this opportunity to put our future in our hands.