Total joins ‘all-out’ drive to boost UK shale industry


Total joins ‘all-out’ drive to boost UK shale industry

Prime Minister David Cameron has promised an ‘all-out’ drive to boost shale oil extraction in the UK with a substantially improved financial inducement to local authorities who allow drilling in their areas.


The news comes as French oil company Total becomes the first oil major to commit to shale gas extraction in the UK, with a plan to invest some £30 million in two exploratory wells in Lincolnshire. The Total move is seen as a major vote of confidence in the UK shale industry.


English local authorities are being promised that they can keep all of the business rates collected from shale gas schemes instead of the current 50%. The government says the move will support the creation of 74,000 jobs and reduce domestic and business energy costs.


The rates benefit will be in addition to the £100,000 that companies involved in drilling, or hydraulic fracturing, will give communities for each test drilling, plus 1% of revenues generated from any shale extraction that takes place that Energy Minister Michael Fallon says could be worth £10 million.


Mr Cameron said: “A key part of our long term economic plan to secure Britain’s future is to back businesses with better infrastructure. That’s why we are going all out for shale. It will mean more jobs and opportunities for people and economic security for our country”


Energy Minister Michael Fallon said he expects between 20 and 40 exploration wells to be drilled over the next two years. The Local Government Association says that the 1% levy should be 10% to be in line with payments made in other parts of the world.


Total’s investment is aimed at exploiting potential shale reserves in the Gainsborough Trough, a geological basin that is expected to hold rich deposits. Total’s partners in the exploration of the two sites are United States company Ecorp, Dart Energy, Igas and Egdon Resources. Total has been unable to invest in France as hydraulic fracturing, or ‘fracking’, is banned there.


Recent estimates suggest a possible 1,300 trillion cubic feet of shale gas under 11 counties in central and northern England, and extracting even 10% of this could provide the UK with 51 years of gas supply.


Photo: KA @