UK: New PM scrapps Department of Energy and Climate Change – what does this mean for fracking?

Theresa May
Theresa May

In a decision branded by her opponents as “plain stupid” the UK’s new Prime Minister, Theresa May, scrapped the Department of Energy and Climate Change (DECC) replacing it with the newly-formed Business, Energy And Industrial Strategy department which will be led by Greg Clarke.

The Green Party and Friends of the Earth have spoken vehemently against the move, which also came under heavy criticism from ex-Labour leader Ed Milliband.

Speaking to The Huffington Post, Green MP Caroline Lucas said the decision to shut down DECC was “a deeply worrying move from Theresa May”.

“Climate change is the biggest challenge we face, and it must not be an afterthought for the Government,” she said.

“Dealing with climate change requires a dedicated Minister at the Cabinet table. To throw it into the basement of another Whitehall department looks like a serious backwards step.

“In the coming months I will work constructively with any Minister willing to take climate change seriously, and I’ll be holding the Government to account for any backpeddling on our climate change commitments.”

Mr Clark released a statement aimed to assuage the concerns that climate change will be removed from the new government agenda, saying: “I am thrilled to have been appointed to lead this new department charged with delivering a comprehensive industrial strategy, leading Government’s relationship with business, furthering our world-class science base, delivering affordable, clean energy and tackling climate change.”

One of the first tasks of the new department will be the ratification of the Paris climate change deal, agreed upon last year.

Conciliatory rhetoric aside, Ms May’s decision will be welcomed by the oil and gas sector, eager to move forward – among other things – with the exploration of Britain’s unconventional resources. Theresa May has been outspoken in her support for shale gas development in the UK – a stance in line with her predecessor’s pledge to “go all out for shale”.

Early on, in the speech launching her campaign for the Tory party leadership, Theresa May stressed the importance of the development of domestic energy sources saying: “I want to see an energy policy that emphasises the reliability of supply and lower costs for users.”

Commentators have pointed out that in the wake of the Brexit vote striving for UK’s energy independence became even more pressing than before. With North Sea reserves depleted, UK’s gas imports are expected to rise to as much as 93 percent of total consumption by 2040, according to the National Grid. This will be additionally burdensome as since the Brexit vote Pound Sterling dropped around 11 percent in value, making it more expensive to import gas.

It seems that after a long period of inactivity things are finally starting to happen for British shale industry. Two months ago, Third Energy received the first planning approval for a shale gas fracking well since 2011. The company says it will start hydraulic fracturing at its Kirby Misperton site in North Yorkshire in northeast England before the end of the year.

Meanwhile, Cuadrilla Resources announced that it aims to produce gas next year in the northwest, subject to planning approval. IGas plans to test first gas in northern England by 2018 – although a recent decision by the Nottinghamshire County Council to extend the consultation period into the planning application to drill exploration wells at Springs Road, Misson, till 5th August, may delay these plans.

Speaking to Kallanish Energy, Corin Taylor, director of UKOOG (UK Onshore Oil and Gas) said: “The Conservative government has been supportive of shale gas development, and we believe that this support will continue. The EU Referendum result emphasizes the need for the UK to secure home grown energy sources.”

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