Scotland sits on the fence as UK Government sparks shale oil ‘gold-rush’


Shale oil locations and exploration licences in the UK
Shale oil locations and exploration licences in the UK

Local councils in Scotland will not get a penny from the UK-wide shale oil gas boom sparked yesterday by Prime Minister David Cameron’s announcement that local authorities in England will be able to keep 100% of business rates they collect from shale gas sites – double the current 50% figure.

This commitment could be worth up to £1.7 million a year for a typical site and will be directly funded by central government {in England}. However the Scottish Government – which decides each year how much cash it will give to Scots councils – was silent on this issue.

As Scottish Energy News was going to cyber-press today, a Scottish Government spokesman said:

There are no proposals which involve the use of fracking techniques in Scotland at this time.

“As with proposals for all types of energy projects, any applications for coalbed methane or shale gas projects in Scotland will be studied on their merits. Each proposal will be considered through the normal planning process and the appropriate regulatory regimes – including SEPA’s guidance on the regulation of shale gas and coalbed methane.

 “The Scottish Government recently announced a strengthening of planning policy in relation to unconventional gas – showing that this Government listens to local communities and to those calling for stronger environmental protection.

 “We strongly endorse the appropriate and robust regulation of drilling techniques such as hydraulic fracturing (fracking) associated with the extraction of shale gas.

“The Scottish Government will follow a rigorous evidence based approach in the development and deployment of this technology.

With its partners – Dart Energy Europe, eCorp oil and gas and Egdon Resources, French oil and gas company Total is investing at least £12.7 million in the UK’s shale gas industry after UK energy firm I-Gas Energy agreed to sell Total a 40% interest in two shale gas exploration licences in Lincolnshire.

I-Gas Energy chief executive Andrew Austin said: “The entry of the first oil major into UK shale gas licences is a further endorsement of the potential that exits”. IGas said it would be applying for permits for “extensive surveys” to identify potential new fracking sites in north-west England, where it already holds licences, but would also seek permits to survey areas of the East Midlands and south England.

UK Energy Minister Michael Fallon, MP – who expects ‘up to 40 shale gas sites to be drilled in England over next two years’ – added; “The shale gas industry could – I repeat could – make a huge difference to our economy”.

Although modest in comparison to the billions of pounds spent every year in oil and gas, the investment by Total – one of the top five global energy companies – is seen as a major vote of confidence in the future of the UK shale gas field.

The British Geological Survey estimates there may be 1,300 trillion cubic feet of shale gas present in the north of England alone – but there are large coal-bed gas fields in north west England, southern England, the Midlands and Scotland’s Central Belt.

Industry sources estimate that even if only 10% of Britain’s shale gas reserves can be mined, it could supply the entire country for up to 50 years.

As reported exclusively in the Scottish Energy News – the Prime Minister’s announcement was heralded last month in a keynote speech at the inaugural Annual International Energy Lecture at UCL  by Ed Davey, Energy Minister, who said then:  

“The UK is pioneering shale gas exploration in Europe, and can show a lead on how shale can be done safely and in an environmentally friendly way”.

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