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UK shale gas announcements

Hydrocarbon Engineering,

Recently, the UK Government announced findings from the first independent study conducted by the British Geological Survey (BGS) on the potential volume of shale gas in eleven counties in the North of England. 

BGS scientists estimated that there is likely to be some 40 trillion m3 (1300 trillion ft3) of shale gas in the ground in this area.

BGS study finds twice as much Shale as expected

A study issued by the BGS estimated that the rocks of the Bowland shale area, which stretches from the Lancashire coast to Scarborough, holds trillions of cubic feet of gas. This is twice as much as previous forecasts.

UK government announces reforms to accelerate shale production

This coincided with the Government announcing last week, as part of its long-term infrastructure investment plan, a package of reforms to accelerate shale gas exploration, including a consultation on tax incentives and changes to the planning system.

A comprehensive package of community benefits has also been unveiled by industry, with companies pledging early engagement (prior to any application for planning permission), and the provision of sizeable community benefits in areas where shale is explored and commercially extracted. 

The benefits include £100 000 for communities situated near each exploratory well, along with 1% of revenues from every production site.

Environment agency provides fast-tracking suggestions

Further announcements were also issued last week by the Environment Agency on streamlining the regulation of shale gas with the existing onshore oil and gas industry, as well publishing further technical guidance on fast-tracking the process for environmental permitting.

All-Party Parliamentary Group on Unconventional Oil & Gas

Speaking following the announcements, Chair of the All-Party Parliamentary Group on Unconventional Oil & Gas, Dan Byles MP said:

[The] announcements on planning, tax incentives, community benefits and the potential scale of our domestic resource are hugely positive, representing a major step forward for the UK shale gas and the foundations of a world-leading industry.”

On community benefits, he said:

It’s abundantly clear that the only way a UK shale gas industry will flourish is if communities are a part of the process right from the start of every project, and share appropriately in the rewards. [The] announcement is strong evidence that industry has grasped these principles and is willing to take the lead in working with communities to ensure local residents have a voice and a sizeable stake in these developments.”

On the British Geological Survey Report, he said:

“The figures are clearly much greater than any previous estimates, confirming the UK’s potential to become a major global player in this market. Even if only 10% of what BGS believes is there was extracted, this would support the UK’s gas needs for four decades – and the report only covers one part of the country. Now we need to know how much of this valuable resource we can extract and what it will mean for UK consumers and industry.”

Harvard report cites “improbable” shale development outside USA

Amid all the excitement following last week's news, some sobering news from America was published. A report by the Harvard University-based Kennedy School of Government said that development of shale gas reserves outside the US was "improbable" at the moment.

"The nature of shale oil production makes it particularly suited for the United States' industrial, financial, demographic, and geologic landscape," said Leonardo Maugeri, the author of the Harvard report. "These same characteristics make the expansion of the shale phenomenon to other parts of the world improbable – at least in the short term."

Further resources

  • Read the DECC announcement here.
  • Read the UCOOG Community Engagement Charter here.
  • Read the British Geological Survey report here.

 Counties covered by the BGS shale report: Lincolnshire, Leicestershire, Derbyshire, Nottinghamshire, Staffordshire, Cheshire, Shropshire, Lancashire, Yorkshire, Greater Manchester and Merseyside.

  • Read the Environment Agency’s announcement here.
  •  Read the details of the Treasury’s Infrastructure proposals here.

The consultation on tax incentives and planning will be released within three weeks.

Edited from various sources by Elizabeth Corner

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