The UK Government to Give Fracking the Go-Ahead

on Oct 16, 2012

The Telegraph reported on 15 October 2012 that the UK government was preparing to give fracking the green light within a few weeks. The official announcement is expected early in November, around the time the country’s gas strategy is announced.

**Fracking in the UK to Resume**
The Telegraph quoted the energy minister Ed Davey as confirming that he would make an announcement on shale gas early in November, along with the UK government’s plan to encourage construction of gas-fired power plants known as the “gas strategy” and the Energy Bill, which is intended to drive investment in low-carbon power plants.

“Fracking”, or hydraulic fracturing, is the process for extracting shale gas by means of pumping liquids into rocks to force gas out. The UK Department of Energy and Climate Change (DECC) called for an assessment of the process after last year, drilling by Cuadrilla Resources Ltd, which used the controversial technique near Blackpool, was accused of causing two minor tremors.

**“Pro-Fracking” Reports**
At the end of June, scientists from the Royal Academy of Engineering and the Royal Society said that the method should be given the go-ahead, subject to tight regulations and continuous monitoring of drilling sites. “The risks associated with fracking can be managed effectively in the UK, provided operational best practices are implemented and enforced through effective regulation,” noted Prof Robert Mair, chair of the panel, as quoted by the Telegraph at the time.

!m[Shale Gas Drilling Likely To Resume In The UK](/uploads/story/587/thumbs/pic1_inline.png)At the end of September, another report by the Institute of Directors indicated that exploitation of the UK reserves of shale gas could meet 10 percent of the UK energy demand for 103 years. “Fracking has been controversial, but the reality is that with proper regulation it is no more risky than any kind of hydrocarbon extraction,” noted Dan Lewis, an energy policy adviser at the Institute of Directors, as quoted by Bloomberg.

**Political Issue**
Bloomberg reports that the prospects for shale gas drilling have become a political issue in the UK, with Conservative lawmakers pushing the fuel as an effective way to mitigate rising energy prices and boost economic growth. Energy prices in the US for instance have fallen after production from shale gas fields made the country the world’s largest gas producer. Chancellor of the Exchequer George Osborne recently announced possible tax breaks for shale gas, which currently fall under the same regulations as the UK’s oil and gas reserves in the North Sea. “We’re consulting on a generous new tax regime for shale gas, so that Britain is not left behind as gas prices tumble on the other side of the Atlantic,” Mr Osborne said on October 8 at the Conservative Party’s annual conference in Birmingham, as quoted by Bloomberg.
The Energy Secretary, who is a member of the Liberal Democrats, however, has said that while being in favour of exploiting shale gas resources, questions about regulatory oversight and the involvement of local communities needed to be answered. Environmentalists have warned that the process of shale gas extraction risks polluting ground water.
In addition, Mr Davey has been sceptical about the potential of shale gas to drive energy prices down. “Shale gas in North America has misled people about the medium to long-term trends in gas prices,” Mr Davey pointed out as quoted by the Telegraph. “People feel that if you go for unconventional gas in the UK that will reduce prices.” He also warned that long-term gas prices were likely to be “staying high or going up” with global energy demand soaring.


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