Despite unpromising start, shale exploration in the UK might just be gaining momentum. Cuadrilla Resources – the forerunner in British shale game – has announced that first shale supplies may enter the UK market as early as mid-2017. At the same time, another major shale player in the country, the chemical giant Ineos, which has already invested heavily in UK shale, said it will carry out a large-scale seismic survey this summer to find new fracking sites in northern England.
The exact amount of shale gas in the UK is not yet known but there seems to be a consensus that the resources are very large. This is significant since, with the North Sea resources already depleted, the country is in need to find replacement source of hydrocarbons that would save the UK from relying totally on imports.
It is not surprising then that shale exploration is strongly supported by the government. Back in 2013 Prime Minister David Cameron claimed that, “fracking has real potential to drive energy bills down” and has declared his commitment to “go all out for shale”.
This commitment is so strong that the government decided to take the decision regarding fracking permissions away from the local councils – which tended to yield to popular pressure and reject the applications. By this they showed that they are willing to override public concerns for what the government clearly sees as “the greater good”.
This obviously is great news for Cuadrilla resources which has been repeatedly twarted in their attempts to drill at two sites in the north of England. The company now hopes to get government approval to start operations at the sites before August. A planning inspector is expected to make recommendations on Cuadrilla’s Lancashire applications to local government minister Greg Clark by July 4 and he will then make the final decision.
“If we get good results from the wells … gas could go into the system next year,” said Francis Egan, chief executive of Cuadrilla.
Gas flows from initial testing would be small but Egan said full production could start in 2018 if necessary permits are obtained.
Meanwhile, petrochemical giant Ineos, has announced plans to carry out large-scale seismic survey this summer to find new shale exploration sites in the north of England.
Gary Haywood, chief executive of Ineos Shale, told the Press Association: “We are firing the starting gun on our programme. Up until now, the 3D seismic data that has been shot in England covers around 400-odd kilometres. Over the next 12 months we hope to top that by shooting more seismic data than has ever been shot in the UK.
“We are ramping up the level of activity quite significantly to see if the geology is suitable for the industry in the UK. The economic benefits will be substantial, if the rocks are suitable and it’s successful.”
After carrying out the survey, Ineos will lodge planning applications for core drilling by the end of this year. It expects to press ahead with core drilling – which establishes whether a site is viable for fracking – in 2017, before submitting a separate planning application to carry out test fracks at the beginning of 2018.
Ineos emerged as one of the biggest winners of the January licensing round with with 21 licences covering a 700,000 acre area in the North West of England, North Yorkshire and East Midlands. In November 2014, the company announced an investment of 640 million pounds in the development of British shale and promised a payment of 6 per cent of its shale gas revenues to UK homeowners affected by the shale exploration. However, the company’s Scottish shale licences are not likely to be developed any time soon, due to the currently imposed moratorium on fracking in Scotland.
Overcoming public concerns is a major issue for all shale operators. Mr Haywood said the firm was committed to meeting and addressing the concerns of local people and would hold public exhibitions where it would listen to concerns.
He added: “There is no question that there is some level of opposition and we are aware of that, and surveys have shown there is not much movement on that.
“We did events in Scotland when we talked to 5,000 people but found that they don’t have the facts and read scare stories in the press. We are in this for business so people will be cautious about believing what we will tell them. We would say listen to the arguments and listen to the independent bodies like the Royal Society and the Royal Academy of Engineering.”
The company also disclosed that it has hired three U.S. consultants to help press on with the development of the company’s shale resources. The consultants – Dan Steward, Nick Steinsberger and Kent Bowker – have all previously worked for Mitchell Energy, which played a key part in the commercialisation of shale gas in the United States.
One thing is clear – the industry will watch Cuadrilla’s and Ineos’ efforts with bated breath. While engaging with the public to assuage their concerns regarding fracking is obviously necessary, there is a belief within the industry that only successfully carried out exploration will demonstrate that the process is safe. But in order for that to happen, some fracking needs to take place first.
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