Published 17 December 2012 | Standard notes SN06073
Energy, Environmental protection, Oil, petrol and natural gas
The recent rapid development of unconventional gas resources (notably shale gas) in North America has transformed the World gas-market outlook. The company Cuadrilla has been conducting test drilling in Lancashire. On 13 December 2012 the Secretary of State for Energy and Climate Change announced that exploratory hydraulic fracturing (fracking) for shale gas could resume in the UK, after a temporary moratorium following small seismic tremors near Blackpool in April and May 2011.
There are several other extant UK onshore petroleum exploration licences which could be looked at for shale gas potential. However, the industry is unlikely to be a ‘game-changer’ in the UK to the same extent as in the US partly because of restricted resources, notably land area. Also, not all shales are likely to be equally productive, and the British Geological Society has estimated that perhaps only 10-20% of the full UK reserve may be recoverable.
Concerns have been raised regarding resource (land and water) use by fracking, net effects on greenhouse gas emissions and the risk of groundwater contamination, as well as general amenity and planning concerns of local residents opposed to development of this sort.
This is against the backdrop of the current Energy Bill which seeks to introduce ‘clean, secure and affordable’ energy supplies. Gas has lower carbon emissions than unabated oil or coal, but not renewable energy sources. However, it has a cheaper up-front cost than renewables or nuclear, and recent Government policy announcements in the 2012 Autumn Statement and in the new Gas Generation Strategy indicate a continuing strong role for gas, and support for shale gas.