Fracking Billionaire Takes Welsh State Aid in Bid to Exploit Ford Closure

• WELSH GOV MINISTER KEN SKATES ADMITS GIVING JIM RATCLIFFE ANYTHING UP TO £13MILLION IN PUBLIC MONEY TO OPEN A 4X4 PLANT IN BRIDGEND
• RATCLIFFE ALSO TOOK UK PUBLIC FUNDS TO DEVELOP THE ‘GRENADIER’ MODEL. HE PROMISED IT WOULD BE ECO-FRIENDLY BUT THE VEHICLE IS NOW SET TO BE A HEAVY CARBON EMITTING 4X4
• WELSH GOV’S ‘CLIMATE EMERGENCY’ BROUGHT INTO QUESTION AS RATCLIFFE HAS ALSO INVESTED HEAVILY IN UK FRACKING AND COULD NOW HAVE HIS SIGHTS ON WALES’ FRAGILE ECONOMY

 By MS Redfern

Notorious union-buster and Britain’s richest man Jim Ratcliffe (net worth: £21 billion) is seizing on the closure of Ford in Bridgend to make his own vehicles in the area – and possibly ramp up efforts to bring his fracking empire to South Wales.

Ratcliffe, owner of petrochemicals giant Ineos, is looking to manufacture his new 4×4 model just yards away from the closing Ford plant in Bridgend. It’s unclear how many Ford workers could transfer to the new Ineos Grenadier factory, but those that do will have to put up with a company notoriously hostile to unions and that could use its new weight in the region to influence anti-fracking policies in Wales. This flies in the face of calls from environmental groups for Ford workers’ skills to be used to build a new green economy in Wales.

Ineos, a company valued at around £35 billion, designed the 4×4 ‘Grenadier’ with the use of a UK Government grant given to selected companies to promote new vehicles that are more carbon-friendly. However,in none of the promotional materials for the Grenadier model – a homage to the Land Rover Defender – has it been sold as eco-friendly. Instead, the FT wrote: “Ineos is going with traditional internal combustion engines.” Reports on the Grenadier teased the possibility of a hydrogen fuel cell powering the off-roader as recently as May 2019, but this plan seems to have swiftly gone out the window.

Opening a new plant to make pollutive vehicles surely can’t fit with the Minister for Environment, Energy, and Rural Affairs Lesley Griffiths’ target of a 95% cut in emissions by 2050. Yet her government colleague, Ken Skates, has admitted that he’s given Ratcliffe anything up to £13million in cash incentives.  

Carbon-emissions are certainly not Ratcliffe’s priority given his career in fracking is only starting to blossom. 

Before 2014, the multi billionaire’s classic method of making money was through buying unprofitable parts of larger chemical businesses and ruthlessly cutting employee costs. “We’d look at businesses that were unfashionable or unsexy,” he told The Times in 2018, “facilities owned by large corporations where you’d know they would be sloppy with the fixed costs.” Shrinking employee benefits in the pursuit of profits has shoved him headlong in many union disputes, one infamous example being when Ratcliffe tried to slash company pension costs at his Grangemouth refinery in 2008 resulting in strike action.

However, five years ago he announced that Ineos was going to diversify his business and invest £640 million in various fracking enterprises. Fracking, or hydraulic fracturing, is a process in which a company bores into the earth and shoots jets of water, sand, and a cocktail of chemicals into the earth to extract valuable fossil fuels trapped beneath the surface. 

Numerous licenses must be granted before fracking can commence in the UK as the chemicals used in the process can seep into the water table and contaminate the local drinking water. In the US fracking has been much more widespread with less regulatory oversight. In 2015 fears of environmental activists were realised when samples from homes in a Pennsylvanian county were shown to be contaminated with hazardous fracking chemicals. Earthquakes are also a common by-product of the process which affects local communities, as was witnessed recently in the UK at a Cuadrilla site in Lancashire. 

Company emails revealed in 2016 that Ineos were prepared to dispose of the contaminous flowback chemicals from the frack site by dumping it all into the sea. This is just one part of an application that sparked a furious reaction from climate activists. Objectors to the planned wells “fear that our tourism and agriculture is doomed if this application goes ahead,” said one councillor as permissions were granted by the local government.

The fracking arm of Ratcliffe’s business, Ineos Shale, has already laid siege to North West England and areas of Scotland. In Yorkshire local residents were forced to crowdfund a solicitor to fight against Ratcliffe setting up environmentally-unfriendly fracking wells. The Scottish Government bore the brunt of a frivolous court case in which Ratcliffe took them to court for not giving him the rights to frack the land. Ratcliffe has fought tooth and nail to get his hands on British shale gas at every turn. He lambasts the state of fracking regulation in the UK whilst at the same time claiming that Ineos has found very high “US-levels” of gas in Nottinghamshire. Now it looks like he’s setting his sights on Wales. 

The Welsh Government has had the power to dole out fracking permissions since it was devolved via the Wales Act 2017. This led to an effective, but not water-tight, ban on giving out licenses to frack the countryside from December 2018. Welsh Government policy is to now only consider licenses “to ensure the safe management of abandoned mines or to support scientific research.” This is far tougher stance than that taken by  the UK Government, which gave out a £230 million loan to Ineos for their Grangemouth refinery to accommodate fracked US shale gas.

But environmentalists point out that Wales has the power to ban fracking altogether, and militant frackers still pose a threat to Wales despite the existing moratorium because of a lack of a full ban. As new Welsh Government policy was announced in December 2018 there were 13 active licenses in use in Wales for conventional oil and gas rigs, each with the potential to be valid for 30 years. These aren’t fracking wells, but they do show the Welsh Government will still make allowances for fossil fuel extraction in Wales. Without the legal barriers in place prohibiting fracking entirely it’s still possible that businesses like Ineos can start looking for loopholes and operating this side of the border, provided they can convince Welsh ministers that jobs are worth the environmental damage.

But if Jim Ratcliffe does come up against a stubborn Welsh Government who oppose his plans, he will have something that no other fracking company in Wales has had before: leverage. His venture into car manufacturing, with a commitment to open a 4×4 plant in Bridgend which promises to create a well-publicised 500 jobs, could be used to try and blackmail government ministers in Wales to abandon their opposition to fracking.   

Ratcliffe has form here, having already complained that if someone didn’t give him a handout he was going to shift his manufacturing plant to Germany. In response, a desperate Welsh Government gave him an undisclosed amount, only saying it was less than £13 million, to do what he wants as long as it creates jobs. 

The cheque has been signed by Minister for Economy and Transport Ken Skates AM. This handout was given to Ratcliffe in spite of the fact that his company made a staggering £2.7 billion profit in 2015 and has used tax havens in the past in order to actively keep money from the public coffers. Meanwhile, 1 in 3 children grow up in poverty in Wales with 11 food banks now operating in the Bridgend area where he plans to open a car plant.

At the same time, many will question the seriousness of the Welsh Government’s declared ‘climate emergency’ while giving money to a petrochemicals giant who wants to build 4x4s when the money could surely go into funding a new green economy. 

Despite the UK fracking industry’s current state of crisis, Ratcliffe has announced that the UK has “US levels” of shale gas beneath our feet. He is surely keen to get his hands on as much of it as he can, with South Wales being home to a significant chunk of it. Right now Welsh policy on fracking is still full of holes, and could be exploited by a keen operator, either through investing in existing licenses or twisting the arm of a willing government desperate to impress.