Reports of the death of UK shale gas industry are premature

David Bernal, Senior Solutions Consultant at Allegro DevelopmentBy DAVID BERNAL

Last year Cuadrilla Resources, one of the main company pioneering shale gas development in the UK, was refused permission to explore the Bowland Basin in north-west England – regardless of the fact that 2,281 trillion cubic feet of shale gas are estimated to be contained within this area.

This was just the last in a series of obstacles the company had encountered in its endeavour to explore for shale gas in Lancashire.

Despite the original planning officer’s recommendation to grant permission to proceed with exploratory drilling at Cuardilla’s Preston New Road and Roseacre Wood sites, and the fact that Cuadrilla assured it could reroute traffic, the application was rejected.

Lancashire Council’s Development Control Committee cited an increase in both noise and traffic as the reasons for turning the application down.

Another obstacle was – and still is – the many anti-fracking demonstrations that take place and that extend the already lengthy time authorities take to grant permission to drill at a particular site. The Cuadrilla decision for instance, took 15 months to be made since its initial submission which makes it very difficult for companies to plan – and to invest.

So, do both the public and the Lancashire Council’s resistance to hydraulic fracturing mean that shale exploration in the UK has already ended before it even started?

That does not seem to be the case. A few months on, Cuadrilla is appealing the local council’s  refusal to grant planning consent at Roseacre Wood and Preston New Road.

Additionally, the UK’s Communities Secretary said back in November 2015 that he would decide the appeals after a public inquiry, which is scheduled to begin in February 2016.

Meanwhile, across the Pennines in Yorkshire, Third Energy  is hoping to finally obtain planning permission from North Yorkshire County Council to hydraulically stimulate and test various geological formations at its existing KM8 well at Kirby Misperton. A decision is also expected in this month.

More recently, Island Gas Ltd (iGas) has also been granted planning permission to drill four exploratory groundwater monitoring boreholes in Nottinghamshire. The drilling may be used to support a future fracking application.

It looks like the end is not here yet for the UK shale industry as there still seems to be both the political will and sector’s supporters within the UK government in favour of having a real go at shale exploration.

What are the anti-fracking arguments?

While domestic shale gas industry is on the UK government’s agenda, some departments that the government controls are putting a spanner in the works in spite of its attempts to win public support.

In July 2015, at the request of the Information Commissioner’s Office, the Department of Environment, Food and Rural Affairs (Defra) published the details of an internal report into fracking which highlights several concerns and which has therefore put the government in an awkward position.

One concern is the fall in house prices in areas near shale gas exploration sites. Another concern is that the cost of rental properties near fracking sites could be pushed up by people coming to work at them.  Additionally, there is also the likelihood of greater insurance costs for properties located up to five miles from a fracking site, in case of explosions.

While these anti-fracking arguments may all be valid, there is no data to back them. What we do know is that there is no evidence of falling house prices near oil and gas sites.

As for the issues around noise, traffic and the visual impact of shale gas sites that the Defra report mentions, these can be applied to any construction site, be it a block of flats, a shopping centre or a shale gas site. In all instances, the noise, increased transport and landscape will go back to previous levels.

While the concern around house prices would have to be looked into in more detail, the issue about noise and traffic can be appropriately managed to ensure minimum disruption.

DECC graphic on shale well depthConclusion

Unfavourable planning decisions are not exclusive to the shale gas industry. Only a decade or so ago, planning cycles for both the wind and nuclear power industries dragged on for years.

Onshore energy production has historically always met approval challenges due to local decision-making, national policies and public opinion.

Shale gas has the potential to diversify the UK  and Europe’s  energy mix and minimise our dependence on dominant suppliers. It also promises to boost employment, create investment opportunities and move us off the current path to more and more coal consumption.

We do not know whether domestic and European shale production can ever have the same impact as in North America but, to find out, exploration needs to be given a chance and start now.

  • A moratorium on all shale gas planning applications has been put in place by the Scottish Government, which is carrying out a scientific study of shale gas exploration issues.

David Bernal, MBA, BSc, is Senior Solutions Consultant at Allegro Development. He has been with Allegro since 2007, where he began as a Services Consultant in Dallas, USA, implementing Allegro for crude and refined Products. Allegro develops and markets integrated commodity management software providing position visibility, risk management, comprehensive controls and regulatory compliance.

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Following the success of the first UK Shale Energy Conference in 2015, Scottish Energy News is collaborating with the Scottish Energy Association to hold the 2016 UK Shale Energy Conference in Glasgow in September this year.

The 2016 conference programme, registration and sponsorship opportunity details will be published in due course.

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