Kemp: Frack The Future: Britain's Onshore Oil, Gas Quest Is On

PEDLs awarded in the 13th round, as well as some still outstanding from earlier licensing rounds, give the holder the right to explore and develop all the hydrocarbons in the licence area from whatever source they come.

The North American shale revolution has suddenly made those licences far more valuable - at least potentially.

Most of the current onshore licences are concentrated in areas such as the Bowland Basin in northern England and the Weald Basin in the south. They have already produced conventional oil, gas and coal, and now have been identified as well as having extensive shale formations that could be fracked for unconventional gas and oil.

So companies that were once exploring for coal-bed methane and other hydrocarbons have reinvented themselves as shale firms.

The problem is that most of them are very small, valued at just a few million pounds, while drilling dozens of wells to explore and then appraise an area before deciding that it is worth entering commercial production will cost tens of millions or even hundreds of millions of pounds.

The drilling and fracking of a single well costs several million pounds. To identify and appraise a field, dozens of wells may be needed. Would-be frackers must obtain up to 10 different permits from four different authorities. The risk of failure is high either because the necessary permission is refused or because the wells come up dry.

Britain's myriad small shale gas developers lack the scale and capital to develop its reported shale resources. Most are essentially "concept companies".