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Shale gas and fracking

Published Friday, January 15, 2016

The regulatory regime for fracking in the UK is covered in this note along with comment on environmental concerns. It also covers the new access provisions and debate on fracking in during the Infrastructure Bill’s passage through Parliament.

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In the UK, drilling for shale gas is at only the exploratory phase.  But the rapid development of shale gas resources in North America has transformed the world gas-market outlook. 

The consensus seems to be that shale gas will not be a ‘game changer’ in the UK as in the US.  There is, for example, less land available to drill on and landowners do not own the rights to hydrocarbons beneath their land.  However, in June 2013 Centrica acquired a 25% stake in Cuadrilla’s exploration licence in Lancashire and the Government and British Geological Survey published raised estimates of the shale gas resource in Northern England.  The Government is also consulting on legislation to introduce tax incentives for shale gas exploration, and has announced community financial benefits. 

Existing onshore petroleum exploration and development licences, which are not specific to shale gas, are therefore more likely now to be explored for their shale potential. 

Shale gas is extracted from solid rock using a process called hydraulic fracturing, or ‘fracking’.  The Royal Society and Royal Academy of Engineering have reviewed the risks associated with fracking.  They concluded that the health, safety and environmental risks can be managed effectively in the UK, by implementing and enforcing best operational practice.  However, they made several recommendations including calling for more research on the carbon footprint of shale gas extraction. 

A report on this was published by DECC in September 2013, in which shale gas emissions were said to be similar to those of conventional gas and lower than those of coal and LNG, leading the Secretary of State to describe shale gas as a ‘bridge’ to a low-carbon future. 

The Queen’s speech in 2014 confirmed Government plans to streamline the underground access regime and make it easier for companies to drill for shale gas. The Infrastructure Bill has been amended to provide this. It also provides a number of new ‘safeguards’.

On 16 December regulations were approved by the House that provide some protection fracking at depths shallower than 1200m in protected areas. Further protections, through the licencing process have been consulted on.

On 17 December 2015, the Oil & Gas Authority (OGA) announced that licences for a total of 159 blocks were formally offered to successful applicants under the 14th Onshore Oil and Gas Licensing Round.

All the licence blocks are mapped out on the OGA’s interactive map.

There are no commercial shale gas operations in the UK.

Commons Briefing papers SN06073

Authors: Mike Fell; Louise Smith; Matthew Keep; Edward White

Topics: Energy, Environmental protection, Oil, petrol and natural gas, Planning

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