Speed up shale exploration, say Lords
8 May 2014
The government must do more to speed up a regulatory process for the exploratory drilling of shale gas that is currently in “logjam”, according to a report published by the House of Lords’ Economic Affairs Committee today.
The report, The Economic Impact on UK Energy Policy of Shale Gas and Oil, supports the government’s commitment to “go all out for shale”, but warns that not enough is being done to enable the drilling necessary to quantify the country’s level of shale oil and gas reserves.
“Only exploratory drilling with hydraulic fracturing, then appraisal, can show how much of the UK’s shale resource can be developed economically,” said Economic Affairs Committee chairman Lord MacGregor.
Unnecessary duplication and diffusion of authority are still rife throughout the regulatory process
Economic Affairs Committee chairman Lord MacGregor
“But there seems to be a regulatory logjam; the Environment Agency has not received or approved a single permit application to undertake hydraulic fracturing since 2012.
”The Government has made attempts to simplify the regulatory regime for development of shale but these measures have not gone far enough. Our report shows that unnecessary duplication and diffusion of authority are still rife throughout the regulatory process. The Government must do more to simplify regulation to ensure that exploratory drilling and development can go ahead. Regulation around shale should be robust, but should move quickly and be easy to understand.”
Today’s report by the Lords represents the culmination of an evidence gathering exercise that began last summer and has included multiple oral sessions at the House of Lords with some of the industry’s key players as witnesses.
As well as criticising the regulatory process, the report also highlights some of the key economic benefits of developing shale oil and gas in the UK, including, the retention and development of energy intensive and petrochemical industries.
“In the US,” says the report “these industries are returning from overseas locations due to new sources of energy and feedstock; development of the UK’s shale resource should similarly help retain and promote these industries”.
Environmental campaigners today agreed with the Lords’ assertion that regulations surrounding shale development were poorly administered, but disagreed that simplification was the solution.
“Shale gas regulation in the UK to date has been a catalogue of errors and oversights as thinly-stretched regulators have struggled to deal with fracking firms with eyes on bumper profits,” said Friends of the Earth climate and energy campaigner Tony Bosworth.
“Today’s report recognises that the regulations aren’t working - but calling for the Government to ‘simplify’ regulations and speed up the process will not reassure local communities and a public unconvinced by this risky technology.”
The Lords’ report follows a study by Ernst & Young two weeks ago that claimed a UK shale oil & gas industry could require up to £33 billion of investment.
