Drilling for shale gas is at only the exploratory phase in the UK. But the rapid development of shale gas resources in North America has transformed the world gas-market outlook.
The consensus seems to be that shale gas will not be a ‘game changer’ in the UK as in the US. There is, for example, less land available to drill on and landowners do not own the rights to hydrocarbons beneath their land. However, in June 2013 Centrica acquired a 25% stake in Cuadrilla’s exploration licence in Lancashire and the Government and British Geological Survey published raised estimates of the shale gas resource in Northern England. The Government is also consulting on tax incentives for shale gas exploration, and has announced community financial benefits. Existing onshore petroleum exploration and development licences, which are not specific to shale gas, are therefore more likely now to be explored for their shale potential. This note includes new tables showing petroleum exploration licences by constituency.
Shale gas is extracted from solid rock using a process called hydraulic fracturing, or ‘fracking’. The Royal Society and Royal Academy of Engineering have reviewed the risks associated with fracking. They concluded that the health, safety and environmental risks can be managed effectively in the UK, by implementing and enforcing best operational practice. However, they made several recommendations including calling for more research on the carbon footprint of shale gas extraction. A report on this was published by DECC in September 2013, in which shale gas emissions were said to be similar to those of conventional gas and lower than those of coal and LNG, leading the Secretary of State to describe shale gas as a ‘bridge’ to a low-carbon future.
The Queen’s speech in 2014 confirmed Government plans to streamline the underground access regime and make it easier for companies to drill for shale gas.