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UK government sets out plan to accelerate, streamline shale gas planning process

London (Platts)--17 May 2018 1026 am EDT/1426 GMT


The UK government on Thursday set out plans to accelerate the drilling approval process for shale gas in England as part of a new push to exploit the country's vast unconventional gas resources and reduce dependence on imports.

In a written energy policy statement, UK Secretary of State for Business, Energy and Industrial Strategy Greg Clark -said recent decisions on shale exploration planning applications had been "disappointingly slow."

"So we are announcing a range of measures to facilitate timely decisions," Clark said, adding the measures would only apply in England. Scotland has introduced a de facto ban on shale gas development.

The vast majority of the UK's shale gas reserves are in England, with the British Geological Survey estimating that the Bowland Shale basin alone holds 1,329 Tcf of shale gas in place.

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At a 10% recovery rate, that would mean the Bowland Shale could produce some 133 Tcf (3.7 Tcm) of shale gas -- enough to meet current UK gas demand of some 80 Bcm a year for 46 years.

However, development so far has proven to be a slow process, owing to local opposition and high population density.

STREAMLINED PROCESS


Clark said the statement was designed to reiterate the government's support for shale gas development and to trigger a more streamlined approval process.

"This statement should be considered in planning decisions and plan-making in England," Clark said.

He said the government expected local mineral planning authorities to give "great weight" to the benefit of shale gas production and the use of hydraulic fracturing.

Despite improvements in efficiency and innovation from companies operating in the North Sea, the decline in offshore gas production has meant that the UK has gone from being a net exporter of gas in 2003 to importing over half (53%) of its gas supplies in 2017.

Estimates suggest the UK could be importing 72% of its gas by 2030.

"We believe that it is right to utilize our domestic gas resources to the maximum extent and exploring further the potential for onshore gas production from shale rock formations in the UK," Clark said.

Clark said the government acknowledged regulation around shale gas developments was "complex" with three regulators -- the Environment Agency, the Health and Safety Executive and the Oil and Gas Authority -- all having responsibilities for regulation.

As a result, the government has decided to set up one single body -- the Shale Environmental Regulator -- which will bring the regulators together "to act as one coherent face for the public, mineral planning authorities and industry."The regulator is set to be established this summer.

INDUSTRY RESPONSE


Industry welcomed the government's move.

Cuadrilla Resources -- which completed the first vertical shale gas exploration well in the UK for six years earlier this year and is currently working on horizontal wells -- said the government recognized that shale gas can deliver important economic benefits.

"We welcome the measures the government has introduced on making the planning process 'faster and fairer' and providing additional resources to help local authorities," Cuadrilla CEO Francis Egan said.

Egan said its planning permission to drill and test just four shale gas exploratory wells in northwest England was only granted after a lengthy and costly three-year process. "These timelines must improve if the country is to benefit from its own, much needed, indigenous source of gas," Egan said.

The shale arm of chemicals giant Ineos -- which has licenses to drill at several sites in the UK -- said the country potentially had enough home-grown gas to be self-sufficient for years.

"But labyrinthine planning rules make it next-to-impossible to access the energy right beneath our feet," Commercial Director at Ineos Shale Lynn Calder said.

"The announcement is a step in the right direction and there is much more that needs to be done. We will work with government to try and help them put in place a regulatory environment that makes a UK onshore gas industry both safe and commercially sustainable," Calder said.

Environmentalist groups were dismayed at the announcement.

"In their commitment to extract more gas than we can afford to burn, they are trying to remove planning control from everyone who understands their local area and make exploratory drilling as easy as building a garden wall or conservatory," head of politics for Greenpeace UK Rebecca Newsome said.

--Stuart Elliott, stuart.elliott@spglobal.com

--Edited Jonathan Dart, jonathan.dart@spglobal.com




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