An Unconventional Conundrum

06 October 2016

By Craig Stevens

In a landmark ruling, the UK Government this week upheld an appeal by Cuadrilla to conduct test fracking drilling in Lancashire.  Following on from a previous decision to allow Third Energy to test for shale gas flow rates at its site near Kirby Misperton, this perhaps sends a message that the UK, or certainly England, is open for fracking business.

Of course it’s early days in all of this.  The number of wells which may need to be drilled to develop a commercial asset is certainly in the tens and this takes time.  But the pressure is now on both of these companies to disprove, or indeed prove(!), the conspiracies and concerns of the anti-fracking movement.

It’s well understood that the UK has significant shale resources and potential for shale gas production, however the viability and commerciality remains in question – how large the individual opportunities are and how expensive they might be to exploit are the unknowns.  These two separate exercises may go a long way to determining whether or not shale gas could be a transformative energy source in the future.

What is interesting is that, on a day where the UK Government stepped in to give the green light to unconventional activity in England, the Scottish Government announced that is unable to support Underground Coal Gasification following serious environmental concerns raised in a report it had commissioned.  Cluff Natural Resources had been seeking to exploit this technique below the Firth of Forth but announced their decision to walk away several months ago.  So the  announcement by the Scottish Government merely rubber stamps what everyone had expected would happen anyway.

Whilst not altogether unsurprising, the reluctance to embrace unconventional hydrocarbon extraction techniques does not bode well for the upcoming announcement on fracking in Scotland, which is expected following the parliamentary recess.  And, at a time when the UK Oil & Gas industry has been feeling the pinch caused by low prices, oversupply, lack of access to capital and high cost base, it’s not exactly music to the ears of those focused on energy security and the transformation of the industry.

It’s an odd thing that the arguments around unconventionals seem to be following some other recent perspectives which differentiate Scotland and England – nationalism vs unionism, leave vs stay, conventional vs unconventional.  Truly a conundrum – and while we remain a united kingdom for now, surely a consistent energy policy throughout the United Kingdom is the only way in which we can work out how the energy transformation journey will look in the coming years.  Contradictions can only lead to confusion – procrastination is the thief of time.

Craig Stevens | Senior Manager
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