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Shale gas offers ‘exciting’ opportunities for struggling steel industry

Shale news
Shale news

The shale gas industry offers “one of those rare opportunities” to create a new demand for steel, offering a potential boost to Britain’s troubled steel industry, a Labour MP has suggested.

Angela Smith described the opportunities the shale gas industry could create for steel manufacturing as the “most exciting prospect”, adding it could offer a “new sense of hope therefore for a positive future for what is one of our foundation industries”.

The MP for Penistone and Stocksbridge spoke of the need for a robust regulatory framework for the shale gas industry and the importance of ensuring manufacturing was in a position to “exploit to the maximum the supply chain opportunities” made available by it.

Speaking during a Westminster Hall debate on the potential role of UK manufacturing in development of onshore oil and gas, she said: “The most exciting prospect lies in the opportunities the shale gas industry could create for steel manufacturing.

“Steel of course is in crisis, a global slump in demand, contractions in the oil and gas industry and the dumping of cheap subsidised steel by the Chinese on global markets has combined with high energy costs and unsustainable business rates to create a debilitating sense of volatility in the industry.”

Ms Smith spoke about possible opportunities for the chemicals, sand and cement sectors, adding: “We cannot afford to dismiss the potential”.

She said: “The nascent shale gas industry offers one of those rare opportunities to create a new demand for steel, something that we badly need at the moment and a new sense of hope therefore for a positive future for what is one of our foundation industries.”

Government support, she argued, was needed in the evolution of a wider range of steel capabilities by building the business case for the development of a UK shale gas supply chain.

Ms Smith warned against a repeat of events in the UK offshore wind industry where there had been “missed opportunities” to build a robust supply chain despite the UK’s strength in the wind energy market.

She said the opportunities for steel as part of the shale gas supply chain focused on two main capabilities, with the industry potentially needing more than 12,000 km of high-quality steel casing costing £2.3 billion, plus a possible 50 drilling rigs costing £1.6 billion to manufacture.

She said: “The Government has a role to play in supporting the steel industry to exploit the opportunities available and to thereby secure a better future for itself.”

Ms Smith called on the Government to develop a “supply chain strategy that guarantees that the best of British will lie at the heart of a successful, safe and environmentally sustainable British shale gas industry”.

Conservative Kevin Hollinrake, who brought the debate, said exploration licences had been granted to five different operators in his constituency, adding: “As long as fracking is conducted in a balanced and measured way, I believe the advantages for our local and national economies far outweigh the disadvantages.”

He said shale gas could lead to a new industrial supply chain and result in tens of thousand of good jobs, adding: “Shale would offer significant opportunities for many UK industries.”

The Thirsk and Malton MP said: “This an opportunity we can’t afford to ignore…. we would benefit from a clean, low-cost, low-carbon, home-grown energy source that will support domestic businesses, create local well-paid jobs and make our economy and nation strong by generating energy for generations to come.”

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