Peel, IGas: Fracking could create £10bn windfall

Extracting shale gas in the North West's Ocean Gateway region could trigger a £10bn boost for the economy, according to a report commissioned by IGas and Peel Environmental.

Unlocking around 5 trillion cubic feet of shale gas could support up to 3,500 jobs and open up a lucrative stream of supply chain opportunities for local businesses, the report claims.

The report, Potential Economic Impacts of Shale Gas in the Ocean Gateway, was compiled by Amion Consulting and commissioned jointly by IGas Energy plc and Peel Environmental.

The figures are based on developing 30 shale gas production sites across the area, getting the first three wells into production by 2017 and expanding year on year until 2031 when 300 wells – 10 wells at 30 sites – could be operational.

In the period 2015 to 2035 it is anticipated that production on this scale could result in:

  • 3,504 jobs, in peak years, in the Ocean Gateway area
  • 15,542 jobs across the UK (derived solely from the Ocean Gateway production)
  • £9.8bn total spend associated with Ocean Gateway production, reaching £945m in its peak year and averaging £466.1m per year over 20-year cycle
  • Extensive supply chain opportunities for businesses in the region and beyond

IGas' chief operating officer, John Blaymires, said: "The findings of this report highlight that the Ocean Gateway region is sitting on a potential £10bn investment opportunity.

"We're looking to develop the capacity from within the region to meet the supply chain requirements so that as many local people and firms as possible benefit from our capital investment. The North West has a huge opportunity to become a centre of excellence for shale gas development and technologies. Over time, local companies will be able to export those skills nationally and ultimately abroad as other nations follow Britain's lead in developing a safe and sustainable industry."

The report also highlights a number of wider economic effects that shale gas exploitation within the Ocean Gateway region could potentially generate, including:

  • Increased tax revenues through direct and indirect taxation
  • Potential for economic effects arising from natural gas upgrading and capital investment in new infrastructure
  • Increased business competitiveness and enhanced attractiveness of the Ocean Gateway corridor as a business location, arising from the use of gas in many manufacturing industries
  • Reduced market pressures on chemicals businesses concentrated in the North West that now face tough competition from their US counterparts due to price differentials on domestically-produced gas
  • While it is anticipated that the number of local residents with appropriate skills and training will be insufficient to meet demand in the first instance, local colleges and the development of a dedicated training institution could address this shortfall

Myles Kitcher, managing director, Peel Environmental said: "The North West stands to benefit hugely from the emerging shale gas industry in the UK, not only in terms of energy security but also inward investment. We have a proud history of engineering and industry in the region and shale gas development could create over 3,500 new jobs and develop skills for generations to come. This report highlights how expansion of the industry could provide a catalyst for the North West, increasing business competitiveness and driving economic growth."

Damian Waters, North West Regional Director of the CBI, said:

"Shale gas has a vital role in diversifying our energy mix and these findings demonstrate the tremendous potential that exists in providing a significant boost for the region's economy and bringing much-needed jobs to local communities."

Tom Crotty, director at INEOS, said: "INEOS believes that the UK needs to proceed with the development of shale gas urgently. We feel that these significant resources provide the potential to secure competitive energy and hydrocarbon feedstock supplies to underpin the future of the UK's chemical industry."

IGas operates the UK's only coal bed methane pilot site at Warrington and is currently appraising and exploring its North West and East Midlands' acreage for its shale and CBM potential.

Peel Environmental owns, manages and develops properties in the waste, mineral and environmental technology sectors and is part of the Peel Land & Property Group.

The focus of Ocean Gateway is on the regeneration of land and assets fronting the Manchester Ship Canal and the River Mersey.

Your Comments

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" other nations follow Britain’s lead in developing a safe and sustainable industry" – does that mean no safe and sustainable shale gas industry currently exists anywhere in the world? That’s a bit worrying! On a serious note, this could be great for the north-west. Let’s get behind it!

By mancboi

Heaven help us if Peel are involved in fracking!!!

By Anderson

Gas produced here will be sold on the international markets at prices set by those markets. Unlike in the USA which is a largely self contained market, and unable to export.. The only beneficiaries of fracking will the big extraction firms, London based commodities traders and financiers, the treasury (assuming tax breaks aren’t too generous) and landowners like Peel. This is nothing to do with local benefits and everything to do with corporate greed. Why else would a conservative led government be so desperate to promote it?

By Green clap

What about the jobs in planning, building, and physically operating the sites? And what about the people employed by the landowners? Yes, shareholders and commodities traders may benefit (and possibly disproportionately), but that doesn’t necessarily make the tangible local benefits unworthwhile.

By mancboi

The real number of jobs will be minimal. The figures in this promotional report, as is usually the case, will be highly speculative and based on a maximum figure over a number years, assuming that all available gas can be extracted and all wells are viable, include all supply chain jobs, and assume that no skills or machinery is imported. Then you have the unknown environmental impacts such as potential water contamination, all of which would be shouldered by the community. This is all about profiteering – local benefits will be minimal at best.

By Green clap

GreenClap – You use words like ‘potential’ and ‘unknown’ in your downside description, this seems even more speculative than the promotional report.

By GreenClinic


Accepted that the official release probably reflects a “base case” series of benefits. However:

– Please quantify “minimal”, in the context of job numbers and local benefits
– Please define “profiteering”
– Please provide more detail on the environmental impacts that you speculate
– Please explain why “minimal” jobs and local benefits are “profiteering” are inherently bad things, versus nothing at all

By mancboi

Mancboi – I’m clearly not going to write a thesis on a message board, perhaps you would be good enough to expand on your assertion that this will be “great” for the northwest with a proper, quantified appraisal of the various benefits and disbenefits? You’re surely not taking as gospel the claims of the report in the article, a more transparent piece of lobbying by vested interests you are unlikely to see

The fact remains that if tax incentives remain generous and there remains potential for significant emvironmemtal impacts such as groundwater contamination, excessive water usage, noise, congestion, increased CO2, earth tremors and process pollutants potentially leaking into the environment; then this becomes little more than a state-facilitated exercise in mineral extraction for little local or wider societal benefit. – profiteering. The mining companies will sell the gas at market prices, not discounted for the UK market, extract he profit and heaping much of the potential hazards onto the local community to deal. The number of jobs supported will be minimal – this is primarily a drilling operation which by definition is not going to be labour intensive. Any higher skilled jobs and associated machinery will be imported from mature markets like the US. The subsidies given to this industry would be better spent developing genuinely sustainable and clean energy sources such as solar or wind. Fracking is just another Tory wheeze to prop up landowners, large corporates and The City.

By Greenclap