UK takes EU shale gas lead with new licensing round

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Increasing political support for development of unconventional oil and gas in the UK has taken the form of a new onshore exploration licencing round that puts the nation at the forefront of shale gas development in the European Union. The big question now facing the industry is how much public opposition it will face when drilling activities get going.

Ministers opened the bidding process for companies seeking licences to explore for onshore oil and gas on 28th July, with an emphasis on the difference that shale gas production could make to the nation’s economy and the security of energy supplies. Ministers are attracted by the example of the United States where the shale gas revolution has led to an economic and industrial renaissance that would have been hard to contemplate a decade ago.

Production of natural gas from the North Sea is now in a phase of seemingly inexorable decline, which has led to the UK having to import increasing quantities of gas by pipeline and in the form of LNG. The dispute between Russia and western powers over Ukraine has heightened concerns about increasing dependence on foreign energy supplies.

“Minimising risks”

“Unlocking shale gas in Britain has the potential to provide us with greater energy security, jobs and growth,” said Business and Energy Minister Matthew Hancock. “We must act carefully, minimising risks, to explore how much of our large resource can be recovered to give the UK a new home-grown source of energy. As one of the cleanest fossil fuels, shale gas can be a key part of the UK’s answer to climate change and a bridge to a much greener future.”

The licences are just the first step towards starting drilling. As well as requiring a licence, companies intending to drill will require planning permission, as well as permits from the Environment Agency and sign-off from the Health and Safety Executive.

Not surprisingly, the announcement was controversial, especially as it relates to national parks and outstanding landscapes.

Attempting to reassure the public that such areas would be treated sensitively, Communities Minister Lord Ahmad of Wimbledon said: “Effective exploration and testing of the UK’s unconventional gas resources is key to understanding the potential for this industry – so the government is creating the right framework to accelerate unconventional oil and gas development in a responsible and sustainable way.

“We recognise there are areas of outstanding landscape and scenic beauty where the environmental and heritage qualities need to be carefully balanced against the benefits of oil and gas from unconventional hydrocarbons.”

The techniques used to extract shale gas – a combination of horizontal drilling and hydraulic fracturing (or “fracking”) – have led to concerns about the effect they might have on water supplies and in causing earthquakes. The government is adamant that done properly these techniques are safe but they remain controversial, even in the United States. In Europe several countries have banned shale gas development.

Last summer saw big demonstrations against shale development in the southern UK county of Sussex, when Cuadrilla Resources attempted to drill near the village of Balcombe.

By Alex Forbes

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