Firms leading UK push for shale gas say ‘we will see results next year’ after 12 months of opposition, protests and a ban in Scotland
British shale gas companies have said domestic fracking will finally begin in earnest in 2018, after another year passed without serious progress amid strong opposition.
Industry figures said next year would be crucial for the sector, as companies start the process of hydraulic fracturing to extract gas trapped underground in shale rock.
The past 12 months have not been kind to the embryonic industry. Scotland has banned fracking, while public opposition in the UK hit record highs and protests made headlines.
The companies at the vanguard of Britain’s fracking push said this will change in 2018. “We will see results next year. None of us can say with certainty what the results will be, of course,” said Francis Egan, the chief executive of Cuadrilla.
According to the British Geological Survey, Britain is sitting on shale gas deposits that could supply the UK for 25 years. A report in 2013 suggested an area stretching from Lancashire to Yorkshire and Lincolnshire could hold at least 1,300tn cubic feet of gas.
Cuadrilla in Lancashire and Third Energy in North Yorkshire are vying to be the first company since 2011 to frack in the UK. Early in the new year, both are expected to begin pumping water underground at high pressure to fracture rocks and test how much gas flows out.
Third Energy, whose plans have been delayed due to a legal loophole and is awaiting final consent from the government, said it hoped some of the public’s fears over pollution and safety would be allayed once it has started fracking near the village of Kirby Misperton.
Alan Linn, the company’s director, said: “It’s a potential catalyst for a sea change in how the industry is perceived. We’ll do it safely.”
By mid February, Third Energy hopes to collect enough data to know whether the well is commercially viable. Commercial development and production is still up to three years away and would require more wells to be drilled and fracked, he said.
Waiting in the wings is IGas Energy, which will submit its first application to frack at a site north of Chester known as Ince Marshes.
The company will also be drilling at two sites in Nottinghamshire, known as Tinker Lane and Springs Road, where construction has already started.
Ann-Marie Wilkinson, the IGas director of corporate affairs, said: “In terms of moving the industry forward, it  is very significant. The most important thing is to demonstrate it can be done safely and environmentally safely, and bring communities along with us.”
The company’s shale operations are largely financed by an investment from the petrochemicals company Ineos. Ineos, owned by the billionaire Jim Ratcliffe, has been one of the most bullish proponents of exploiting shale gas, arguing that it is vital to stop the decline of British manufacturing. For instance, Ineos has said fracked gas can be sent to its facilities, converted into ethylene and then used in the production of plastic products.
The company had hoped to have drilled several wells of its own by early this year, but is still in a testing phase and trying to win planning permissions.
Ineos recently drew the ire of several councils that said they were being bypassed after it sought to use fast-track powers granted by the government in 2015. These allow shale companies to apply directly to the government for planning approval if local authorities take more than 16 weeks to decide whether fracking should go ahead.
Ineos is grappling with a problem at its Forties pipeline system in the North Sea, which it has closed for several weeks for repairs after finding a crack.
Gas prices have jumped due to the pipeline’s closure and disruption to gas supplies in Europe, which shale advocates see as strengthening the case for a new domestic source of gas.
Ken Cronin, the chief executive of the onshore drilling body UKOOG, said: “At times, the stress, if you don’t have your own gas, you have to pay for it. I think the dynamics of our argument haven’t changed: imports are increasing, that will increase price volatility.”
He rejected the notion that falling energy demand and renewable energy prices meant shale’s window of opportunity was closing, pointing to forecasts that the UK’s dependency on gas imports is going to increase in coming decades.
While activity on the ground looks likely to increase next year, industry observers said it will take several years of exploration before the sector knows whether shale can be extracted and sold at a commercially viable price.
Jim Watson, the director of the UK Energy Research Centre, said: “I think some progress may be made in 2018, but that broader question of what role shale might play in the UK’s gas mix will still not be resolved by the end of 2018.”
Watson thinks shale still could still play a role in the UK, but only if it can compete on cost with other sources of gas that can be shipped and piped in. However, he pointed out that while fracking is close to becoming an established part of the British oil and gas industry, the government seems cooler on the process than ever before.
David Cameron said his government was going “all out for shale”. In comparison, Watson said, fracking is no longer as prominent in government narratives and was absent from the budget and the clean growth strategy.
“Perhaps that’s a recognition that it’s taking longer than they thought and perhaps also that the world is changing around it,” he said.
A spokesperson for the Department for Business, Energy and Industrial Strategy said: “The UK government is committed to ensuring we have secure energy supplies that are reliable, affordable and clean. As part of this, shale gas has the potential to be a home-grown energy source which can lead to jobs and economic growth, contribute to our security of supply and help us achieve our climate change objectives.”
This article first appeared at the Guardian
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