U.K. Opens Bidding for New Round of Shale Gas Exploration

U.K. Opens Bidding for New Round of Shale Gas Exploration

The U.K. began the bidding process for the next set of onshore oil and gas exploration licenses, including shale that is considered a cheaper and more secure energy source…read full story here.

Key Points:

  • The Department of Energy and Climate Change set out the details, which include planning guidance for areas of outstanding natural beauty, national parks and world heritage sites. About half the U.K. will be open for bids.
  • Hopes:
    • greater energy security,
    • jobs and
    • growth
  • Government Incentives:
    • tax breaks to drillers
    • pledged to ease planning rules, to allow companies to begin shale extraction faster.
  • Reserves:
    • Bowland basin may hold 1,300 trillion cubic feet of gas, enough to supply the country for almost half a century, if just 10 percent is extracted.
  • The U.K. is competing with Poland to lead development of the resource in Europe and replicate a shale boom in the U.S. that made it the world’s largest producer of oil and gas.
  • IGas Energy Plc and Cuadrilla Resources Ltd. are leading efforts in U.K. exploration following the lifting of a moratorium at the end of 2012.
  • Criticisms:
    • Hydraulic fracturing may cause water shortages in parts of the country
    • Cause house prices to drop
    • May also cause water contamination
    • An increase in heavy goods vehicles along narrow lanes and an industrialization of the English countryside.
  • Protests:
    • Last year, protesters in the village of Balcombe, south of London, halted exploration work by Cuadrilla. Last week, a planning application by Celtique Energie Ltd. was rejected by local authorities because of objections by the community.