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UK awards first fracking license in five years

Independent firm Third Energy has been awarded the first UK license for hydraulic fracturing since 2011. It’s a boost for the nascent industry but don’t expect an imminent shale gas revolution

AT LAST the UK’s shale gas industry has received a much-needed boost. On 23 May local government officials in northern England awarded Third Energy a license to hydraulically fracture an existing well in Yorkshire.

The firm plans to carry out fracking at its site outside Kirby Misperton, near the picturesque North York Moors National Park, to test if gas will flow from the rocks and for how long. It hopes to do so by the end of the year.

But commercial-scale shale gas production will take at least a decade and depend on whether the government's plan to streamline its regulatory process works.

Even Rasik Valand, Third Energy’s chief executive, said not to expect a shale gas bonanza in northern England anytime soon.

“Don’t expect to see any activities on site in the near future. We have conditions from both the planning authority and the Environment Agency to discharge,” Valand said. “Now we move on to the next stage of obtaining required approvals.”

The local council, which approved the fracking application, stressed that Third Energy’s case has no bearing on future decisions and each application will be decided upon on its own merits.

Little progress has been made on developing the industry since the UK placed a moratorium on fracking in 2011, after Cuadrilla Resources' exploratory drilling in Lancashire, northern England, was found to have caused two small earth tremors.

Last year local government officials in Lancashire rejected new fracking applications from Cuadrilla Resources. The firm is still appealing the decision.

Fierce public opposition to fracking and painfully slow planning regulations have held up progress on developing shale gas in the UK despite strong government support and potentially large reserves.

The US Energy Information Administration, estimates the UK could have the fourth-largest technically recoverable shale gas reserves in Western Europe, at 25.8 trillion cubic feet.

The UK's Weald basin could hold almost 9 billion barrels of shale oil, according to the British Geological Survey. If proved, this would treble the country's crude reserves.

The UK government has been trying to lure potential shale gas operators as domestic output declines. In December 2015 the UK government awarded its first onshore permits specifically for shale gas exploration: 93 licences were issued, across 159 blocks.

It was the 14th onshore licensing round - but what made it significant was the interest from experienced shale developers, who hoovered up about three-quarters of the licence areas.

The auction came after years of delays - a consequence of environmental concerns about hydraulic fracturing and the UK's complex oil and gas regulatory regime.

Even after operators win exclusive rights to an area they aren’t allowed to actually drill. They still need the landowner's permission, followed by separate planning permission from several regulatory bodies. In turn, this may require an environmental-impact assessment and several other environmental permits.

That's if the application proceeds that far and isn’t blocked by public opposition. There have been widespread anti-shale gas protests in the UK since 2011.

Approval of Third Energy’s fracking application sparked a series of new protests across northern England.

Environmental campaign group Friends of the Earth said the decision to allow Third Energy to frack was "an absolute travesty… but the battle is very far from over”.

For UK shale gas hopefuls, the battle to develop an industry has only just begun.

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