Shale gas and oil represents a huge economic opportunity, largely onshore, which could attract £3.7 billion a year and support 60,000 jobs – according to today’s report: Delivering UK Energy Investment 2014 from the Department of Energy & Climate Change (DECC).
To capitalise on the shale energy promise, UK is heavily investing in upstream and midstream sections of the energy sector. Private investment on the UK continental shelf has almost doubled since 2010, with development capital expenditure higher in 2013 than at any point in the last decade. Transportation-wise, between 2010-2014 over £3.8 billion has been invested in gas transmission and distribution networks supporting 11,500 jobs.
The DECC believes that domestically produced oil and gas are an essential part of the UK’s energy mix and reduce its dependence on imported fossil fuels. The report recognises that shale oil and gas could offer Britain the
opportunity to produce even more homegrown energy.
To promote shale industry, the government has facilitated introduction of an industry led community benefits package for people living near shale sites worth £100,000 per exploratory site, plus 1% of revenues.
Furthermore, to ensure that the regulatory environment supports maximum economic recovery of UK hydrocarbons, the government has endorsed and is implementing the recommendations of the recent Wood Review. This includes the establishment of a new, independent and well-resourced regulator, the Oil and Gas Authority. Sir Ian Wood’s report estimates that full and rapid implementation could be worth over £200 billion over the next 20 years.
Welcoming the comments from the Secretary of State for Energy and Climate Change Ed Davey today, Chief Executive of Energy Networks Association (ENA) David Smith, said:
“Keeping the lights on, homes warm and businesses working are the bread and butter of the energy networks, and significant investment is needed over the coming decade to ensure we meet the challenges of a more sustainable but affordable energy future.
“Recent decades have seen the increase in network investment delivering improved resilience, safety and efficiency while the costs to customers have fallen. Whether national or regional, our UK networks are supporting economic growth, innovation and boosting jobs and skills in the areas they work.
“As we look ahead to the next decade, the UK networks will experience a scale of change and improvement that hasn’t been seen since the formation of the national grid infrastructure in the 50s.”
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