A worker at Cuadrilla Resources' fracking plant near Preston © Gabriel Szabo/Guzelian
Britain’s shale gas industry has won a big victory after the government overturned local council objections to a fracking scheme in Lancashire.
Fracking could restart next year after Sajid Javid, communities secretary, gave the go-ahead to Cuadrilla Resources to use the controversial technique at the Preston New Road site after a public inquiry. However, it deferred a decision on a second project, at Roseacre, in the county.
The government has been trying for years to encourage a shale gas industry that it says would replace some imports and create jobs. But local planning authorities and campaigners have blocked plans to frack since 2011, when Cuadrilla caused a minor tremor at another Lancashire site.
Lancashire councillors had turned down two applications, in one case overruling their own officers.
England has big reserves of shale gas across the north and Midlands and in the Weald Basin in south-east England.
Fracking, or hydraulic fracturing, requires pumping large volumes of water, sand and chemicals underground at high pressure to release gas and oil trapped in rock hundreds of metres underground.
Ineos is among others pressing for UK shale resources to be opened up. The UK petrochemicals group last week imported a shipment of ethylene derived from US fracking for use in its Grangemouth chemicals plant in Scotland — the first such shipment to arrive in Britain. Jim Ratcliffe, Ineos chairman, has said it would make more sense to source the product from UK shale gas rather than shipping it across the Atlantic. The company wants to start drilling test wells in the north of England next year.
However, aside from Cuadrilla, Ineos and a handful of other pioneers, the energy industry has generally been cautious in its approach to UK shale. Executives at large oil and gas groups say they are sceptical about whether the size of the opportunity will outweigh the geological and political obstacles.
“It all depends on the underlying economics,” says one consultant who has worked with companies interested in UK fracking. “There’s got to be a large quantity of resource in the ground that’s easy to access. Not enough work has been done to demonstrate that.”
While fracking advocates tout the potential for a US-style shale revolution, sceptics highlight the differences between fracking in the wide expanses of North America and the small and crowded British Isles.
The US shale boom was spurred by a permissive regulatory regime, generous government research and development support and large volumes of equity investment. None of those conditions exist in Britain.
Nottinghamshire councillors on Wednesday deferred until November a decision on an application for test drilling by iGas at a former Cold War missile site near Bassetlaw after a legal submission from Friends of the Earth. Any future fracking would require a second application.
North Yorkshire council did allow Third Energy to test frack for shale gas at an existing well outside the village of Kirby Misperton. It would need fresh permission to produce on a large scale, which could lead to several hundred wells in the region.
Laws governing UK mineral rights provide little incentive for local communities to embrace fracking. Whereas in the US landowners also own the resources beneath their property, in the UK anything deeper than 50m is owned by the Crown.
UK citizens have resisted. They fear the pollution of water supplies and excess noise and traffic in the countryside. House prices could also fall.
The opposition Labour party said last week it would ban fracking if it got into power because it wanted to reduce the use of fossil fuels to combat climate change.
The government has offered payments to local communities to try to get support but there have been mass protests wherever the drillers have gone.
“One day there will probably be some shale gas produced in the UK but will it be enough to move the needle? The jury’s out,” says the consultant who has worked with shale gas companies.
The relatively high costs of operating in the UK are another deterrent to investment at a time when the global market is awash with growing supplies from the US, Australia, the Middle East and elsewhere.
James Heappey, Conservative MP for Wells in Somerset, and a member of the Commons energy and climate change committee, is among those who question whether the sums will ever add up for UK fracking. “We’ll be importing cheap American shale gas before we’re fracking on large-scale in UK,” he says.
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