Scottish oil and gas prohibition questioned

A shale leader said it was filing a legal challenge to an onshore decision that put an estimated $1.3 billion for local communities out of reach.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Jan. 10, 2018 at 8:59 AM
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Jan. 10 (UPI) -- The shale division of British business group INEOS said it was petitioning for a judicial review of a Scottish decision to sideline onshore oil and gas work.

Scotland has one of the more robust low-carbon programs in the world and its government in 2015 ruled that natural gas derived from underground coal deposits would have no place in a greening economy. The decision followed a report from the University of Glasgow that found the coal gasification industry had a history of incidents related to pollution and is out of step with Scotland's efforts to lower its emissions without an offset like carbon capture and storage in place.

INEOS Shale filed for a judicial review of the government's decisions, saying Scotland will lose out on at least 30,000 jobs and an estimated $1.3 billion for local communities.

Operations Director Tom Pickering said the decision was a major blow to his company and the fledgling regional onshore oil and gas industry.

"It also removed at a stroke the potential for the country in these uncertain times to secure its own indigenous energy supply," he said in a statement. "We have serious concerns about the legitimacy of the ban and have therefore applied to the court to ask that it review the competency of the decision to introduce it."

The Scottish government had no public comment on the challenge. Scottish ministers had already enacted a separate moratorium on unconventional oil and gas extraction methods, like hydraulic fracturing.

Scotland pegged its future during its last bid for independence on revenue from oil and gas reserves in the North Sea. The bid failed in 2014 and the government said since that the region's energy sector needs a predictable set of governing policies in order to thrive.

Ken Cronin, the chief executive of the U.K. Onshore Oil and Gas organization, said last year that Scotland stands to win by exploiting its own reserves. Its report found as much as $8.5 billion in tax receipts would go to the Scottish government from onshore oil and gas.

Pickering added he was frustrated with the fluid support for a fossil fuels industry in Scotland.

"If Scotland wants to continue to be considered as a serious place to do business, then it cannot simply remove the policy support that attracted that investment in the first place without proper procedures being followed and without the offer of appropriate financial compensation," he said. "In the light of these failings, INEOS has been left with no option other than to raise this legal challenge."

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