UK Government Softens Tone on Fracking
The UK government stressed the importance of shale gas as part of its solution to the net-zero carbon future that it legislated for in June, in an August 15 statement.
It also hinted that the seismicity threshold may be raised from the present level, which is the lowest in any jurisdiction where shale gas is produced, as privately backed Cuadrilla confirmed that it had that day begun to hydraulically fracture its second horizontal well in Lancashire.
“We have world-leading regulations that ensure shale gas exploration happens in a safe and environmentally responsible way. The Oil & Gas Authority is currently undertaking a scientific assessment of recent industry data which we will consider once completed," said the department for business, energy and industrial strategy (Beis), which suggests a change of regulation is possible.
The extremely low threshold has caused some would-be explorers such as Ineos to give up, as the stop-start nature of the work makes production of shale gas by hydraulic fracturing too expensive, and today's low gas prices make it even less economic.
Cuadrilla said its operation at Preston New Road was well-run, entirely safe and environmentally responsible. "We also know there is a reservoir of recoverable high quality natural gas beneath our feet that the UK needs if we are to reach Net Zero by 2050. The UK onshore shale exploration industry as a whole remains excited about the prospect of the Bowland Shale formation – estimated by the British Geologic Survey to contain some 1,300 trillion ft³ of natural gas,” it said. The gas quality and flow-rates matched or exceeded those in some US plays, but proper testing is not compatible with the regulations on seismicity.
Beis said that shale gas "could be an important new domestic energy source reducing the level of gas imports while delivering broad economic benefits, including through the creation of well-paid, quality jobs. It could also support our transition to net zero emissions by 2050."
Beis said there might be an increase in the demand for natural gas if the hydrogen economy grows. The UK imports 59% of its gas from overseas. (517 TWh out of a total gas demand in 2018 of 877 TWh) and the Committee for Climate Change says the UK could be importing 85% of our gas from overseas by 2050. (510 TWh out of a total gas demand of 600 TWh). Under best practice, UK shale gas may have a lower carbon footprint than much of the gas that the UK imports.
One regional cluster seeking government funding for its hydrogen initiative, the North West Hydrogen Alliance (NWHA), surprisingly did not mention the shale gas lying under Lancashire in its August 15 appeal to the government for funding to develop the hydrogen economy. Shale gas could be an important feedstock for the future hydrogen economy of the region, if its production is commercially viable.