20131216_BB
Source: BBC TV News
URL: N/A
Date: 16/12/2013
Event: Jim Ratcliffe: "The UK probably has the most expensive energy in the world"
Attribution: BBC TV News
People:
- Fiona Bruce: BBC journalist and presenter
- Robert Peston: BBC News Business Editor
- Jim Ratcliffe: British financier and industrialist
Fiona Bruce: The owner of one of the biggest chemical makers in the world has warned that the high cost of energy in the UK is having a damaging impact on British manufacturing. In an exclusive interview with the BBC, Jim Ratcliffe, who runs Ineos, a company with £30 billion worth of sales worldwide, that also owns the Grangemouth oil refinery in Scotland, said expensive energy was making the UK uncompetitive. Our Business Editor Robert Peston reports.
Robert Peston: Grangemouth - mile after mile of refining and chemicals manufacturing, part of the UK's vital industrial infrastructure -almost shut down just weeks ago, until this billionaire, Jim Ratcliffe, smashed an industrial dispute by members of the Unite union. And now he's at it again, putting the boot in somewhere else.
Robert Peston: What's your view of the government's energy policy?
Jim Ratcliffe: The UK probably has the most expensive energy in the world.
Robert Peston: Do you find that, as a business, with operations pretty much everywhere, this is the most expensive place to operate, when it comes to energy, is it?
Jim Ratcliffe: Yes. Yeah, the UK. Yes. It's more expensive than Germany, it's more expensive than France, it's much, much more expensive than America. Yep, it's not competitive at all, on the industry front, I'm afraid.
Robert Peston: Ineos is one of the biggest energy consumers in Britain. Ratcliffe, Ineos's owner, says that although he understands why the UK wants greener, cleaner energy, the risk is that the costs will drive manufacturers like him to parts of the world where power is cheaper. And he's unimpressed by the massive investment being made in new nuclear power here at Hinckley in Somerset.
Jim Ratcliffe: We're going to build a new nuclear power station, and the price of that nuclear power is going to be £95 per megawatt hour, fixed for the next 25 years. In France - we've just done a deal with a nuclear power station in France - and we're fixed at 45 euros a megawatt hour - £95? Forget it. Nobody in manufacturing is going to go anywhere near £95 a megawatt hour.
Robert Peston: The most profitable place in the world for Ineos is the US, where fracking has cut the cost of energy and the chemical ingredients, or "feedstocks" for its plants.
Robert Peston: So, does that mean that you could be a fracker?
Jim Ratcliffe: We have got some drilling experience, and what have you, but we obviously have - we would be the biggest consumer of that ethane molecule, in the UK. We have shale gas around, so we're at that end of the spectrum, as well, so I think... we are having a look at whether we have a part to play in the UK, in shale gas exploitation.
Robert Peston: So we've got a strong future for America -
Jim Ratcliffe: Correct.
Robert Peston: - a strong future for China -
Jim Ratcliffe: Yeah.
Robert Peston: - competitiveness of the Middle East isn't going to change -
Jim Ratcliffe: Correct.
Robert Peston: - so what is the future of Europe, in chemicals?
Jim Ratcliffe: Not very rosy, in my view, because we've got the most expensive energy in the world, we don't have any cheap feedstocks, there is very little growth in the European economies at the moment... I'm not sure the governments have quite woken up to the fact that the shale gas onslaught from the US hasn't started yet, because we haven't started building all the new - well, they're in the process of building the new capacity, but it's not built.
Robert Peston: Grangemouth - still losing money, even after its workers were forced to take a cut in pension benefits. Its future will be secure only when cheap, fracked ethane from America is imported and possibly, one day, the same ingredient fracked in Britain. Robert Peston, BBC News.