UK shale gas industry 10 years away according to industry – more than 50% say Scottish independence ‘no dent to overseas investment’

Pinsent Masons logoA major survey published yesterday by international law firm Pinsent Masons reveals the vast majority of industry players believe an emerging UK shale gas industry is at least 10 years away from making a significant impact on UK energy supplies.

The survey, which canvassed the views of 100 of the most prominent players in the UK shale industry, showed 64% of stakeholders believe that it will take at least 10 years for shale gas exploitation to make a meaningful impact, with a further 13% saying it could take up to 20 years.

Conducted in Edinburgh and London, the survey also found that:

  • 55% of respondents felt confident that Scottish independence would not impact on the industry’s ability to attract overseas investment
  • However, 55% also thought a Scottish Government proposal for buffer zones around fracking sites would hinder the pace of development
  • Local opposition and ‘nimbyism’ was viewed by 55% as the biggest challenge and barrier to shale gas becoming a valuable domestic resource
  • 60% supported proposals for a single planning and licensing regime – reflecting reservations that the current regime is not fit for purpose
  • Despite that, 52% of respondents credit the Conservative Party with devising the clearest policies to promote exploration and production of shale gas, while strikingly, 31% of were unclear about which political party provides the most coherent policy, and a number of respondents indicated that Labour “has not been vocal on the subject of shale gas”.
  • There was a 45%-45% split of opinion on whether protests over exploratory drilling in Balcombe last summer would affect investment in UK shale.

The Pinsent Masons survey is believed to be the first major study of its kind canvassing sentiment among a broad cross section of stakeholders in the UK industry. Respondents included members of government bodies such as the All-Party Parliamentary Group for Oil & Gas and professionals in related fields such as planning, environment and wider oil and gas industry specialists.

Bob Ruddiman, the Aberdeen-based Head of Energy and Natural Resources at Pinsent Masons, said:

“We are at the beginning of a shale gas revolution and we must we must recognise that significant investment of time and money is required to ensure success. The indigenous UK technological supply chain presents a genuine opportunity for us to emulate the success experienced with unconventional gas in the US where it has been truly transformational for the supply chain and consumers.

“Injecting funds into our supply chain is essential if we want to experience the type of boom seen across the Atlantic. We have the opportunity to provide this funding and focus on the infrastructure and technology we need to ensure shale gas features highly in the UK’s future energy supply. Now at the early stages of exploration, it’s imperative that we invest in the future and look ahead to a time when shale gas will be a significant element of our energy mix.”

Paul Rice, Pinsent Masons’ Head of Client Relationships for Energy and Natural Resources, added:

“Unlike other energy resources in the UK, shale gas is a new and relatively unknown quantity, triggering much concern. It is widely accepted that prudent controls will play a major role in providing reassurance. Given the concerns expressed by industry around local opposition, it is clear that transparency of process and genuine communication with local residents around those controls will be perhaps the most significant factors in determining the future of shale gas production in the UK, almost irrespective of community incentive packages.”

 

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