Energy group Ineos to challenge Scotland's ban on fracking

EDINBURGH (Reuters) - Energy group Ineos has applied to launch a legal challenge to the Scottish government’s ban on onshore unconventional oil and gas development in Scotland, known as “fracking”, arguing the ban was imposed unlawfully.

FILE PHOTO: A logo is pictured in the headquarters of INEOS chemicals company in Rolle, Switzerland, November 13, 2017. REUTERS/Denis Balibouse

Scotland decided to outlaw fracking in October after a public consultation found overwhelming opposition to it.

However, Ineos said that decision flew in the face of other expert reports conducted several years earlier which concluded that shale gas could be produced safely and has applied for a judicial review.

The application will be heard at the Court of Session, Scotland’s supreme civil court, and the company expects a decision on whether there is a case to be heard within a couple of months, INEOS Shale operations director Tom Pickering told Reuters.

“We’ve invested money within the petroleum license regime (...) with planning permissions in place, and all of the (investment) backdrop was supportive,” he said. “The first point is to understand whether or not the decision is lawful, and once we understand that, we can consider any compensation.”

Ineos called the ban on fracking “a major blow to Scottish science and its engineering industry,”

It said it had concerns about the legitimacy of the ban and alleged serious errors in the decision-making process, adding there had been a failure to adhere to proper statutory process and a misuse of ministerial power.

Scotland imposed a moratorium on fracking, the process of fracturing underground shale rock to release gas and oil, in 2015. That decision was extended last autumn after a large survey of public opinion, in which 60,000 people took part, found 99 percent opposed fracking.

However expert opinion consulted as part of the government’s report also found that the regulatory framework was “largely in place” to control the potential environmental impacts.

Ineos said that, having attracted investment for fracking, the ban would mean the Scottish government had to compensate the companies concerned.

“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,” Pickering said.

Scottish government energy minister Paul Wheelhouse, said:

“We have taken a careful and considered approach to arriving at our preferred policy on unconventional oil and gas in Scotland.”

Editing by Stephen Addison