Analysts: UK Shale Package Won't Have Tangible Effect on Industry Momentum
The latest regulatory package from the UK government to support domestic shale exploration will not have a tangible effect on momentum within the industry.
That is the view of oil and gas analysts at BMI Research, who outlined the need for local council approval and persistent, strong, local opposition to fracking in the UK as “significant” hurdles for the sector.
“Applications will still face all existing barriers to shale developments, with staunch local opposition from landowners, local councilors and environmental activists persisting,” the analysts said in a report sent to Rigzone.
“Indicatively, through the year to date, seven out of eight shale exploration plans have been refused by local councils in England,” the analysts added.
BMI analysts conceded that 2018 is likely to mark the first year in which hydraulic fracturing takes place in the UK for over seven years but said they did not foresee a “significant” increase in momentum within the industry.
“The results of upcoming drilling tests in several onshore licenses across the UK will be important for resource determination. However, crucially, the completion of the small drilling schedule will provide an extremely small proportion of the required activity to properly delineate and quantify the existing resource base in the UK,” the analysts said.
“Consequently, a high volume of additional drilling will need to take place, the scope for which we believe to be shrinking,” they added.
Last week the Secretary of State for the UK’s Business, Energy and Industrial Strategy department issued his backing for the UK’s onshore shale gas industry and set out a series of actions to support the development of shale gas extraction in the UK.
As part of these actions, Clark announced a range of measures to facilitate timely decisions on shale exploration planning applications in England.
Clark also confirmed that a shale environmental regulator would be set up “from the summer” and revealed plans to work with industry to see how community benefits could be improved.
Cuadrilla Resources, Ineos Shale, Union Jack Oil and UKOOG all reacted positively to Clark’s statement.
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