Fracking firm warns that even if Liz Truss lifts controversial moratorium on shale gas extraction methods, UK industry won’t be able to revive without rapid reform of planning and earthquake rules is doing.
new british prime minister thursday Ended fracking ban in the UK This has been in place since 2019 as part of broader reforms to strengthen the UK’s domestic energy supply and address rising bills to homes and businesses.
truss She argued that the decision “could see gas flow in as early as six months”, but the resumption of fracking in the UK would also be “where there is local support for it”. I admit to being dependent.
Fracking companies such as Australia-owned Cuadrilla and Britain’s largest private company Ineos welcomed the reversal, but industry insiders warned that other rules would have to be addressed if the government wanted to kickstart. did. manufacturing.
Ross Glover, development director at Aim-listed fracking company IGas Energy, told the Financial Times that streamlining rules around planning and permitting will be key.
“Development of any form of infrastructure” in the UK faces a lengthy planning and permitting process, Glover argued. “I’m not saying we’re going to get rid of all the regulations, it’s just that we need to have a proper discussion on how to accelerate the project.”
Shares of IGas have surged more than 650% this year, partly on investor hopes of a reversal of the fracking moratorium.
Shale gas companies have also long called for a review of seismic activity regulations. “traffic signal system”If fracking causes an earthquake of magnitude 0.5 or greater, work must stop immediately.
Charles McAllister, director of policy at UKOOG, the trade group representing Flacker, said some companies may not go ahead with shale projects if the industry does not get the comprehensive policy support they need. There is,” he warned.
UKOOG requires the fracking industry to follow the same standards for surface vibration that apply to other industries.
“We are . . . earthquake regulatory; construction, geothermal, quarrying, [the] Coal mining,” McAllister said. “In our view, the industry is demonized in the context of broader regulation on seismic activity and surface vibration.”
Brian Mullin, head of planning consultancy Marrons Planning, suggested that community consent may also need to be removed from fracking’s consent process.
Ineos offered to drill a shale gas test well to prove to the government that “we can do it”. [fracking] It has increased the possibility of paying communities to get help, safely and without harming the environment.
“We have committed to investing the first 6% of the value of our gas in the community,” Ineos director Tom Crotty said Thursday.
Hydraulic fracturing, or fracking, forces water, sand, and chemicals underground under high pressure and releases gases from rock formations.It transformed the U.S. energy sector, but some leading scholars have long argued that Britain’s geology is changing. unsuitable for process, even with community consent in such a densely populated country.
“[The] Britain’s geological history is complex,” said Professor Stuart Hazeldin of the Department of Earth Sciences, University of Edinburgh.
The Truss energy reform is also aimed at unleashing a new wave of exploration among companies in the UK North Sea, but skeptics say increased production in the region will have a very high impact on oil and gas prices. argues that it is likely to minimize.
Truss greenlights its first oil and gas licensing round since 2019-2020 as the government seeks to stem a decline in UK oil and gas production.
Annual production of UK North Sea oil and gas fell by 17% last year. Gas production improved 27% year-on-year in the first half of 2022, but energy companies warn any reversal will prove “short-lived” in the absence of a new wave of investment.
The new permit covers mature areas of the UK North Sea. This means companies that successfully drill new wells can leverage their existing infrastructure rather than installing costly new pipelines.
The UK’s oil and gas regulator, the North Sea Transition Authority, will give priority to the initial package of fast-track licenses that include existing discoveries that companies may be able to take advantage of within a year, but the rest of the permits will have a five-year term. It can take 10 years from produce any product.
Officials are also looking to accelerate projects already in the development stage so they can reach production sooner.
The government is particularly keen for Equinor to bring the Rosebank oil and gas field 130 kilos below the cost in the Shetland Islands, according to people familiar with the official’s thinking.
Rosebank is one of the largest pipeline projects slated for government and corporate approvals in 2022 and 2023. Already his one biggest project, Shell’s Jackdaw gas program, received the green light in June.
Equinor has so far said it will make a final investment decision in Rosebank in 2023.
Yvonne Telford, senior analyst for Northwest Europe at consultancy Westwood Global Energy Group, said exploration and production companies have an “enthusiasm” to move forward.
But she warned that “production from large developments such as Shell’s Jackdaw and Equinor’s Rosebank fields will not be seen until 2026 and 2027.”