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Government goes ‘all out for shale’ as Total buys into UK exploration
Prime Minister David Cameron has declared the government’s enthusiasm for exploring for shale gas by announcing that councils local to shale sites will be able to keep the business rates generated by the projects. This follows publication in December of an environmental assessment report for shale gas that sets out the economic and environmental effects of further oil and gas activity in Great Britain.
Alongside the assessment report, a regulatory roadmap for shale was also released, which details the permits and permissions that potential developers need to obtain before they can drill for UK onshore oil and gas. The government hopes that releasing the roadmap will provide certainty to investors and local communities about what the permitting process entails for shale exploration.
Produced by AMEC, the Strategic Environmental Assessment (SEA) for Further Onshore Oil and Gas Licensing, finds some significant effects of shale gas production on a national and local level. The report estimates under its ‘high’ scenario that 4.3–8.6tn cubic feet of shale gas could be produced in the UK up to the year 2020. The UK currently consumes 3.5tn cubic feet of gas per annum.
The report goes on to first outline the beneficial effects of this scenario, in terms of jobs, the economy and community incentives for areas hosting shale development sites. Local communities are set to benefit from £100,000 per hydraulically fractured site, and could then receive 1% of the revenue of a well over its lifetime. The report also details the adverse effects of development, in terms of the environment, an increase in traffic congestion, emissions and pressures on water resources.
The SEA is open for consultation until March, after which the 14th onshore licensing round for bidders to express interest in both conventional and unconventional gas developments in the UK will take place. Around 95,000 km2 of Great Britain is open for exploration, a similar area to the 13th round in 2008.
Energy Minister Michael Fallon said: ‘We are stepping up the search for shale. There could be large amounts of shale gas available in the UK, but we won’t know for sure the scale of this prize until further exploration takes place… But we must develop shale responsibly, both for local communities and for the environment, with robust regulation in place.’
Meanwhile, the French-owned Total has acquired a 40% interest in two shale gas exploration licences in the UK, in Petroleum Exploration & Development Licences 139 and 140 in the Gainsborough Trough area of the East Midlands. Patrice de Viviès, Total’s Senior Vice President for Northern Europe, pointed out that the Group is already involved in shale gas projects in the US, Argentina, China, Australia, and in Europe in Poland and in Denmark.
News Item details
Journal title: Energy World
Countries: UK -
Subjects: Policy and Governance, Shale gas, Exploration and production, Jobs, Water resources
