Fracking companies have warned that lifting a moratorium on Liz Truss’ controversial shale gas extraction method will not revive the industry in England without rapid reform of planning and seismic rules.
New British prime minister on Thursday ended the ban on fracking in England which is being introduced from 2019 as part of wide-ranging reforms to boost Britain’s domestic energy supply and tackle soaring bills for households and businesses.
Truss beam she claimed the decision “could get gas flowing in as little as six months”, although she admitted that resuming fracking in England would also depend on “where the local support is for that”.
While fractional companies, including Australia’s Cuadrilla and Britain’s biggest private company Ineos, welcomed the turnaround, industry insiders warned that other rules would need to be addressed if the government wanted to get off the ground. Production.
Ross Glover, director of development at Aim-listed fracking company IGas Energy, told the Financial Times that streamlining the rules around planning and permitting would be essential.
“Development of any form of infrastructure” in the UK faces a lengthy planning and permitting process, Glover argued. “We’re not saying we’re going to get rid of all regulations, we’re saying we need to have a proper discussion about how we’re going to speed up projects.”
IGas shares have risen more than 650 percent this year, partly on investor expectations that the fracking moratorium will be lifted.
Shale gas companies have also long called for an overhaul of seismic regulations, known as “traffic light system”which require an immediate stoppage of work if fracking produces earthquakes of magnitude 0.5 or higher.
Charles McAllister, director of policy at UKOOG, the trade body representing frackers, warned that if the industry “doesn’t get the comprehensive policy support it needs, then some companies may not go ahead” with their shale projects.
UKOOG wants the fracking industry to be subject to the same surface vibration standards as other industries.
“We ask that we be treated fairly in regard to . . . earthquake regulations. We would like to be treated in accordance with construction, geothermal, mining and [the] coal industry,” McAllister said. “Our view is that the industry has been demonized in the context of the wider regulation of seismicity and surface vibrations.”
Brian Mullin, head of planning consultancy Marrons Planning, suggested that community consent may also need to be removed from consent distribution processes “as it has proven to mean a moratorium on delivery”.
Ineos, which offered to drill a shale gas test well to prove to the government that “we can do it [fracking] safely and without harming the environment’ raised the prospect of payments to local communities to gain support.
“We have promised to invest the first 6 percent of the value of the gas back into local communities,” Ineos chief executive Tom Crotty said on Thursday.
Hydraulic fracturing, or fracking, involves pumping water, sand and chemicals underground at high pressure to release gas from rock formations. It transformed the US energy sector, but some leading academics have long argued that British geology did it doesn’t fit well process, even if community consent could be achieved in such a densely populated country.
“[The] the geological history of the UK is complicated,” said Stuart Haszeldine, a professor in the School of Geosciences at the University of Edinburgh.
Truss’s energy reforms are also aimed at unleashing a new wave of exploration by British companies in the North Sea, although skeptics say any increase in production in the region is likely to have minimal impact on sky-high oil and gas prices..
Truss will give the go-ahead to the first round of oil and gas licensing from 2019-20 as the government seeks to stem the decline in UK oil and gas production.
Annual UK oil and gas production in the North Sea fell by 17 per cent last year. Although gas production improved by 27 percent year-on-year in the first half of 2022, energy companies warned that the turnaround would be “short-lived” unless there was a new wave of investment.
The new permits will be for mature areas of the UK North Sea, meaning any companies that successfully drill new wells can use existing infrastructure rather than installing costly new pipelines.
Britain’s oil and gas regulator, the North Sea Transition Authority, will prioritize an initial package of fast-track licenses that include existing discoveries that companies could potentially exploit in less than a year, although the remaining permits could take five to 10 years. get any production.
Officials are also trying to speed up projects already in development so they can reach production more quickly.
The government is particularly keen for Equinor to move its Rosebank oil and gas field 130 kilometers outside the cost of the Shetland Islands, according to people familiar with the officials’ thinking.
Rosebank is among the largest in a series of projects expected to win government and company approvals in 2022 and 2023. Another of the largest, Shell’s Jackdaw project, got the go-ahead in June.
So far, Equinor has said it will make a final investment decision on Rosebank in 2023.
Yvonne Telford, senior analyst for North West Europe at consultancy Westwood Global Energy Group, said exploration and production companies had an “appetite” to continue development.
However, it warned that “production volumes from larger projects such as Shell’s Jackdaw and Equinor’s Rosebank fields will not be seen until 2026 and 2027”.