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UK to allow shale-license holders to retain bigger areas

NIDAA BAKHSH

LONDON (Bloomberg) -- The UK announced new license terms to spur the development of the resource that may supply the nation with half a century of natural gas from shale rock.

The measures will allow license holders to retain bigger areas and cut costs, Energy Minister Michael Fallon said today, June 24, at a conference. The 14th licensing will be launched “shortly,” he said.

“Unlike traditional oil and gas, shale gas is not concentrated in small high-value fields, but is likely to be dispersed across large areas with ‘sweet spots,’” he told a conference in London. “I am removing unnecessary barriers and introducing a new flexibility to licenses.”

At the same time, the changes will ensure everyone has access to information earlier by cutting the length of time explorers can keep data on drilling and flow rates confidential to six months from four years, he said.

Fallon’s Conservative Party is seeking to spur shale exploration to secure energy resources as North Sea reserves decline. The Bowland basin in northern England may contain as much as 1,300 Tcf of gas, the British Geological Survey has said. That will last almost 50 years based on an extraction rate of 10%, similar to U.S. fields, according to Bloomberg calculations.

Opponents fear that hydraulic fracturing, also known as fracing, causes earthquakes and water contamination as the process uses water, sand and chemicals at high pressure to blast the fuel out of rock.

The Labour opposition party said baseline monitoring should take place for a year before extraction to ensure well integrity and safety, Tom Greatrex, shadow energy minister, said at the same conference via videolink.

06/24/2014

 

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