Ineos will invest £640 million in shale gas exploration in central Scotland to try to identify gas deposits available following their acquisition of exploration licences for 729 sq. miles of land in August.
Jim Ratcliffe, chairman of the Swiss-based company made the announcement in London, indicating that he was confident the initial investment would go ahead within the next 5 or 6 years.
"I want Ineos to be the biggest player in the UK shale gas industry. I believe shale gas could revolutionise UK manufacturing and I know Ineos has the resources to make it happen," he said.
This follows Ineos' pledge to share six percent of shale gas revenues with the communities where the gas is extracted, sparking criticism from opposition groups who have labelled the proposal a bribe to local communities.
The announcement comes as the Department of Energy and Climate Change (DECC) weighs up more than 90 applications for fracking licences, with a decision expected to be made early next year.
Although the company is set to conduct exploratory works for shale gas, companies will need to acquire a fracking licence and meet a range of environmental standards before drilling can begin.
Despite Ineos' announcement for further exploration, oil and gas engineer Mike Hill, who has advised the EU and DECC on matters relating to shale gas extraction and who has campaigned for more stringent environmental and health controls, doesn't believe fracking will necessarily go ahead in the UK, even though the practice has the support of the government.
"There is a lot of public opposition to fracking in the UK so I think shale gas development will be very quickly kicked into line. Despite Ineos' announcement, I think the chances of fracking going ahead are small," he said.
Mr Hill says that a number of local parliamentary candidates in areas pencilled for fracking have campaigned against the practice. He believes they will prevent fracking in those areas if they are voted into parliament.
Fracking — which involves drilling into shale rock and using a high-pressure mix of water and chemicals to bring gas to the surface — has polarised opinion in Britain with campaigners on both sides putting forward their arguments.
Proponents of fracking say shale gas will provide a cheap, cleaner energy source that can help the UK avoid dependence on energy imports, and believe it will provide a bridge towards a low-carbon future.
However critics argue that fracking can lead to increased seismic instability, claims which prompted the British government to place a temporary moratorium on fracking after operations near Blackpool in 2011 were found to have been the ‘most likely' cause of small earthquakes in the area.
Environmental groups also cite studies in the United States which found dangerously high levels of cancer-causing chemicals in the air near fracking sites.
Mary Church, head of campaigns for Friends of the Earth Scotland criticised Ineos' announcement as having "very little substance," saying that any successful proposals to frack will take many years to be approved.
She also called on the Scottish government to prevent such practices from taking place.
"Unlike its UK counterpart the Scottish Government has taken a cautious approach to unconventional gas and fracking, introducing a tougher planning regime and opposing plans to remove peoples' rights to object to fracking under their homes. Scotland does not need unconventional gas to meet our energy needs, and extracting and burning it will jeopardise our climate targets and expose local people to unacceptable health risks," she said.
There is also debate over the accessibility of shale gas deposits, with fracking often criticised for its hit and miss approach when attempting to extract gas.
Despite the UK government's interest in developing shale gas as an alternative home-grown energy source, it seems that public opposition to fracking may play a part in delaying or preventing the practice from going ahead.
