Fracking For Shale Gas Gets Green Light in UK
Ed Davey has lifted a suspension on the controversial practice of hydraulic fracturing, on the condition of strict seismic controls.
Fracking is set to be the next frontier for the UK’s oil and gas industry, after the government lifted restrictions on the controversial practice on Thursday, giving a green light to drilling that could produce billions of pounds worth of gas.
The first new site is likely to be at Anna’s Road in Lancashire, near three exploratory fracking wells that were closed after they caused two minor earthquakes last year. Dozens more sites across the country could be licensed as ministers signaled their hope that shale gas would help to make up for the decline in North Sea gas supplies.
Ed Davey, the Liberal Democrat energy and climate secretary, said: “Shale gas could contribute significantly to our energy security, and reduce imports of gas as we move to a low-carbon economy. It could substitute for imports, which are increasing as North Sea gas is decreasing.”
He said companies drilling wells would be subject to a “traffic light” system, with seismic monitoring to ensure that if there are tremors above a certain level, drilling is halted pending investigation. Any chemicals used in fracking have to be approved by the Environment Agency, and the Health and Safety Executive will also be involved in vetting operations.
Estimates of how much shale gas there might be in the UK vary widely. Cuadrilla – the only company yet to have drilled exploratory wells – believes there could be 200tr cubic feet beneath the surface. That would be about 70 times the UK’s annual gas demand, but the estimate is regarded as much too high by some geologists.
The real question is not how much gas there might be, but how much is technically recoverable, and recoverable at a reasonable cost. That amount could be far lower than the available resource – it could be less than 5% is recoverable. However, even that small amount could total hundreds of billions of pounds over decades.
Some businesses and investors are sceptical that fracking could happen here on the large scale required to yield such returns, given the density of population and fears over the impact of the practice, which requires dense rock to be blasted apart to release microscopic bubbles of methane – natural gas – trapped within it. Each site needs up to eight wells to be drilled per square mile to collect the gas, and each requires planning permission and is vetted by several government agencies.
Eight wells per square mile could prove a barrier to companies gaining planning permission, especially if local opposition groups step up their current activities. In the US, fracking has been associated with groundwater contamination, methane leaks and the use of toxic chemicals. Davey said that would not happen in the UK, as the industry would be far more tightly regulated, but that may not assuage the concerns of local groups.
Ben Caldecott, head of policy at the boutique investment bank Climate Change Capital, said: “Fracking will continue to generate significant local opposition, which will undermine long-term political support and the investment case for a UK shale gas expansion. This is fortunate, as it’s clear from the latest Committee on Climate Change (CCC) findings that another dash for gas will expose us to higher and more volatile fuel prices.”
A Downing Street spokeswoman said: “There is great potential for prices to come down and that is something that is attractive about finding another source of energy.”
But environmental experts pointed out that this would still lead to a rise in fossil fuel consumption overall, because the gas that would have been imported will be sold elsewhere.
There is also no guarantee that shale will bring down gas prices. Jim Watson, professor at the University of Sussex, said: “Even if UK shale gas resources turn out to be large and low-cost – and that is a big if – this will not necessarily bring down prices to UK consumers. It is unlikely that UK shale gas will be anywhere near as cheap as it is in the US, and any price difference between UK gas and continental European gas will quickly disappear as a result of demand from other countries.”
Industry welcomed the government’s move. Steve Radley, director of policy at EEF, the manufacturers’ organisation, welcomed the government’s green light for fracking: “The government continues to demonstrate a shift to a more balanced energy policy. Shale gas is a potentially game-changing resource where, in the US, it has slashed energy prices and helped spur a re-industrialization. As we continue to struggle to rebalance our economy and balance our books, we cannot ignore this potentially significant resource. Well-regulated exploration is the sensible approach.”
The seismic controls that would trigger an amber or red light are strict – a tremor of magnitude 0.5 would be enough. This is equivalent to the ground shaking caused by heavy goods vehicles on roads. Frackers will have to install equipment that is able to distinguish between background signals of that sort and any seismic activity caused by the drilling. Cuadrilla said this was possible to so and would not disrupt the drilling process.