U.K. Region Approves First Fracking Permit Since 2011
May 23 2016 - 9:20PM
Dow Jones News
LONDON—An English county government on Monday approved an
application for what could be the first permit to frack for shale
gas in Western Europe since 2011.
The North Yorkshire County Council voted 7-4 to allow U.K.-based
Third Energy to use hydraulic fracturing to extract shale gas from
an existing natural gas well in Kirby Misperton in northern
England.
"This approval is a huge responsibility. We will have to deliver
on our commitment…to undertake this operation safely and without
impacting on the local environment," said Rasik Valand, chief
executive of privately held Third Energy.
Hydraulic fracturing, or fracking, is a process of using water,
sand and chemicals to release oil and gas trapped in underground
rock. The widespread use of the practice reinvigorated the U.S.
onshore oil-and-gas industry over the last decade.
The U.K., which the U.S. Energy Information Administration
estimates has 26 trillion cubic feet of shale gas reserves, is one
of the few countries in Europe whose laws allow fracking. But local
governments haven't awarded permits for companies to start the
process.
Prime Minister David Cameron is eager to replicate the U.S.
fracking boom in hopes of reducing Britain's reliance on imported
gas and offsetting declines in production from country's aging
fields in the North Sea.
But companies that have proposed fracking in the U.K. have hit
opposition from environmental groups and local residents in the
rural areas where prospectors want to drill.
Last summer, the Lancashire Council in northwest England
rejected applications by Cuadrilla Resources Ltd. to frack at two
sites. Cuadrilla is appealing the decision and hopes to get a
decision later this year.
Britain has since changed planning rules to speed up the process
and to allow government intervention to approve or reject shale-gas
drilling permits.
The government's "intent is good, but the delivery is not,"
Cuadrilla Chief Executive Francis Egan said at a conference in
London last week. "Investors have patience but it's not limitless,"
he added.
Cuadrilla first submitted its applications to drill and frack in
2014. Third Energy submitted its applications a year ago.
According to the U.S. EIA estimate, Britain's shale-gas reserves
amount to triple the country's current annual gas consumption.
But so far only one well has been fracked for shale gas—by
Cuadrilla in 2011. The government imposed a moratorium after those
fracking activities caused minor earthquakes nearby. Britain lifted
the moratorium in 2012, but there has been no fracking since.
Analysts have said that even in the most favorable
circumstances, large scale development is at least five to 10 years
away.
France's Total SA and utility Engie SA along with tiny shale
explorers IGas Energy PLC, Egdon Resources, Celtique Energie
Petroleum Ltd and Swiss chemicals giant Ineos also have licenses to
explore onshore for shale gas.
Write to Selina Williams at selina.williams@wsj.com
(END) Dow Jones Newswires
May 23, 2016 21:05 ET (01:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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