UK allows bigger shale licences while tightening disclosure rules

Houses of Parliament, London
Source: DollarPhotoClub

U.K. Energy Minister Michael Fallon announced yesterday new rules to accommodate shale gas exploration. He also said that the 14th licensing round will be launched “shortly.”

The new rules will allow exploration companies to cut costs and hold bigger acreage than previously. In a bid to increase transparency the companies will also be required to disclose data on drilling and flow rates after six months. Previous regulations allowed them to keep the data confidential for up to four years.

“Unlike traditional oil and gas, shale gas is not concentrated in small high-value fields, but is likely to be dispersed across large areas with ‘sweet spots,’” Mr Fallon told a conference in London. “I am removing unnecessary barriers and introducing a new flexibility to licenses.”

“These changes will reduce costs to the licensee but they won’t lead to land-banking as plans for meaningful activity will have to be approved,” he added.

The support of the Conservative-Liberal Coalition for shale exploration is widely known. Labour Party has also given shale its stamp of approval. Tom Greatrex, Shadow Energy minister, said at the same conference that “The benefits of shale gas mean it is worth exploring” but, he added, within a tightly regulated framework.

If elected next year, a Labour government would require developers to carry out a 12-month monitoring programme once a shale gas well is drilled before exploration can begin, he said.

The newly-popular UK Independence Party (UKIP) also supports shale exploration. On the party’s website it pledges to “develop shale gas to reduce energy bills and free [Britain] from dependence on foreign oil and gas – place the tax revenues into a British Sovereign Wealth Fund.”

Meanwhile, researchers at Durham University have found that fracking will increase water radioactivity but not pose a threat to public health. The report, called the Environmental Science & Pollution research, found that in the Bowland shale the waste fluid would be 500 times more radioactive than the level expected from local ground water, but this would still be less than the Environment Agency’s annual exposure limit.

Professor Fred Worrall, a professor of environmental chemistry at Durham University and author of the paper, said: “It is important to bear in mind the context of the shale gas industry against other forms of energy production.

“We, in the UK, already handle larger volumes of fluid with higher radioactivity from other energy industries, such as conventional oil and gas production.”

Recent YouGov survey for the University of Nottingham showed that support for shale gas among the British has slumped from an all-time high of 58% in July 2012, to just 49.7%.

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