Shale development stuck at starting gate

Onshore drilling activity. Photo courtesy of the United Kingdom Onshore Operators Group
Onshore drilling activity. Photo courtesy of the United Kingdom Onshore Operators Group

Shale gas and oil development must become an urgent national priority and government should simplify regulation to break the current development logjam, says the House of Lords Economic Affairs Committee in a report.

 

The committee says it supports the government’s promise to go all out for shale, but warns that more has to be done to bring forward development. At the present pace of development large scale production is unlikely until well after 2020 and a Cabinet committee should be formed to drive shale forward.

 

The report – The Economic Impact on UK Energy Policy of Shale Gas and Oil - says that exploratory drilling with hydraulic fracturing has barely started and since a moratorium on fracturing, or fracking, was lifted in 2012 not one application for exploratory drilling permits has been approved or received by the Environment Agency.

 

Complex regulation might be a cause of delays says the report, and it calls for a simplified and clear regulatory regime to encourage development. Concerns about earth tremors from fracking have been exaggerated but public fears about environmental and health risks have to be taken seriously and communities have to be reassured that risks to the environment or health are low.

 

The existing regulatory regime is adequate to ensuring public and environmental safety, but some changes should be made, including requiring well inspectors to be independent and not employed by the drilling companies.

 

Committee Chair Lord MacGregor said that in the medium term shale could help ensure that competitively priced electricity supplies are maintained at an adequate level for many years to come, although it could not offset any near term shortfall in the UK’s electricity generating capacity.

 

He said a successful shale gas industry in the UK would be good for the economy and energy security. He added: “The committee strongly supports the government’s decision to go ‘all out for shale’. But here in the UK we have not yet left the starting gate. Developing a successful shale gas and oil industry in the UK must be an urgent national priority.”

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