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Cuadrilla makes headway with UK shale project

It's taken seven years, but hydraulic fracturing is set to be resumed in northern England

The UK government's decision, announced on 24 July, to allow hydraulic fracturing (fracking) in a shale gas well in England for the first time since 2011 represents a hard-fought victory for the drillers, but doesn't signal the start of a shale gas rush just yet.

Privately-owned Cuadrilla now has final government consent to frack one of two wells It has already drilled at its Preston New Road site in Lancashire, north-west England, and plans to apply for consent to frack the second well soon.

Among other would-be fracking firms to take heart from the decision is Third Energy, which is 95% owned by banking group Barclays. The company is waiting for government approval to start test fracking at its Kirby Misperton site in Yorkshire, northern England.

Cuadrilla plans to start fracking at Preston New Road before the end of the third quarter of 2018, a process that will last around three to four months, which will be followed by flow tests lasting about six months. Cuadrilla has said it encountered "a sizeable quantity" in the area of the wells, but has not put a figure on possible reserves.

These are the first two horizontal shale exploration wells to be drilled onshore in the UK, according to the firm, one at around 2,300 metres deep through the Lower Bowland shale formation and the other at around 2,100m.

Fierce opposition

It was reports of small earth tremors around a vertical well at another Cuadrilla site in north-west England, which was being hydraulically fractured at that time, that led to a halt to fracking in England being imposed in 2011. That remained in place until now, sustained by vociferous opposition, which had triggered prolonged local council reviews and long-term protest at Preston New Road and other sites.

However, the UK's Conservative government has long maintained that it would permit fracking in England, where it was deemed safe, though there had been little recent evidence that it was preparing to act. It says it has done so now—albeit for just one well, so far—as part of a drive to offset the country's increasing dependence on gas imports, as the UK's once-mighty offshore gas reserves dwindle.

Fracking remains banned in the other constituent countries of the UK—whose own legislatures control permissions—as well as in several other European nations.

Economic benefits

Claire Perry, the UK energy minister, justified the decision on the grounds that the industry was well regulated and that domestically produced shale gas would enhance energy security. She also said it would help with the transition to a lower-carbon economy, as well as providing economic benefits and creating jobs.

The announcement was met with hostility from opponents of the fracking in the UK. Liz Hutchins, Friends of the Earth director of campaigns, said that with the share of renewable energy in the power mix much higher than it was in 2011, the government had now "backed the wrong horse" by offering a lifeline to "this nearly dead-on-its feet industry".

Cuadrilla's chief executive Francis Egan said he believed shale gas production would "make a major contribution to reducing the UK's gas imports and improving our environment and economy".

The British Geological Survey's central estimate for shale gas resources in northern England is 1,329 trillion cubic feet, just 5% of which could supply the UK for more than 20 years at current consumption rates, if it can be extracted.

But that is, of course, a big "if". The US shale industry has been able to produce large quantities of gas cheaply, helped by economies of scale, a massive domestic market and access to vast swathes of thinly populated shale-gas rich land on which to drill.

Cheap supply?

The UK industry also hopes to produce shale gas cheaply enough to compete with imports from the global gas market, which is currently amply supplied via pipeline and liquefied natural gas cargoes. But it must do so in a relatively small country, in areas close to towns and cities or protected countryside. That will inevitably mean surmounting further legal challenges under local planning and environmental laws of the kind that have proved so effective in delaying progress so far.

Measures are being considered to enable the central government to override local objections to shale projects, potentially speeding up permitting, but fighting opposition is likely to remain a drain on the resources of shale firms. Cuadrilla said on the same day that it received fracking consent that it planned to take legal action against six people who had blocked the entrance to the Preston New Road site.

The industry has also yet to be given the opportunity to prove that the gas will flow in commercial quantities—and that it can be done without producing tremors or environmental damage that may upset the neighbours.

Cuadrilla now has the opportunity to prove this is possible on one site at least. If it is successful, the industry will be hopeful that the UK will warm to this new source of energy and that it can put the hiatus of the last seven years behind it.

With renewable energy's share of the market rising and the need to cut carbon emissions to control global warming as pressing as ever, further delays in rolling out commercial scale shale gas operations could scupper the industry for good.

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