Consultancy: Britain Must Ease Planning Rules On Shale Gas
LONDON, Feb 17 (Reuters) - Britain must streamline shale gas planning rules to cut delays or it will fail to achieve significant output and will miss out on potential tax revenues, energy consultancy Poyry said.
The country is in the early stages of exploring for unconventional gas to counter growing dependence on imports and a government-commissioned geological study has estimated it could have shale resources equivalent to several hundred years of demand.
The government, eager for tax revenues and new jobs, is supporting shale gas by offering favourable tax rates and promising returns for communities that host exploration.
But Poyry warned on Monday that red tape was unnecessarily delaying shale gas development.
"If the regulatory and permitting process is not made more efficient, then it may not be possible to achieve shale gas production at any scale," Poyry analysts said in the report, which was also given to members of the economics committee in the House of Lords, parliament's second chamber, last week.
Poyry estimated it takes around 6-8 years for a shale gas developer to start commercial production in Britain after receiving a licence - if there are no legal challenges.
The recommended time is around four years, Poyry said.
The consultancy suggested creating a one-stop-shop for shale gas permitting to cut down on timing and allow for a potentially high demand in well applications over the coming years.
Poyry analysts estimate that by 2024 around 100 new wells will need to be approved each year to pave the way for significant shale gas production.
Britain created a dedicated government office for shale gas in 2012 to present one point of contact for shale gas questions.
Several companies have announced plans to explore for shale gas and use the so-called fracking technique which blasts water, sand and chemicals into rock formations to release hydrocarbons.
One is Cuadrilla Resources, whose fracking plans in Britain are most advanced. The company's Bowland shale sites could contribute some 2.7 billion pounds to government coffers by 2035 through corporation tax, Poyry estimated.
Others include majors Centrica and Total which have taken stakes in awarded licences.
Fracking has drawn criticism from environmentalists who say it can pollute ground water and lead to earthquakes.
Last year anti-shale gas protests broke out in the south of England, while northern communities have been more favourable to the sector because of its potential to create jobs.
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