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UK shale industry faces more delays as Cuadrilla submits new planning application

BY SELINA WILLAIMS AND CASSIE WERBER

LONDON -- United Kingdom shale pioneer Cuadrilla Resources said it will submit a new planning application for its controversial oil exploration well in southern England, adding further delays to a project that has already been shut down once during anti-fracking protests.

This, coupled with a delays at Cuadrilla' s operation in northern England, are a setback for United Kingdom government ambitions of replicating the North American shale boom that has lowered energy prices in the United States and helped reinvigorate the economy. It also illustrates the hurdles for companies and governments that are finding that supportive policies and attractive tax incentives may not be enough to counter strong local opposition to the extraction technique of hydraulic fracturing, also known as fracking.

Cuadrilla' s decision to submit a new application to cover flow testing and to avoid legal challenges on underground work at its Balcombe site  instead of extending its current license comes amid strong local opposition to the drilling.

Last month the company temporarily halted drilling operations at the site, after several hundred environmental activists who are opposed to fracking descended on the area. Some local residents are also opposed to the method, although Cuadrilla hasn' t said if it will need to use the technique at Balcombe.

Earlier this year Cuadrilla delayed plans to start fracking and to drill exploration wells at its licenses in the Bowland Shale in northern England, while it selects sites and undertakes Environmental Impact Assessments. The company had originally planned to start fracking there this summer.

Unlike in the United States, development of potential shale resources in the United Kingdom. has proceeded at a snail' s pace. There has been no commercial shale gas production, only a handful of exploration wells have been drilled and only one well has been fracked. As a result there is as yet no reliable estimate of how much of the United Kingdom' s potential shale resources can be produced at a profit.

The United Kingdom government is hoping a shale gas boom could help shake off economic stagnation by lowering the cost of energy for businesses and consumers, and creating many jobs.

Cuadrilla' s new planning application in Balcombe will cover the same testing that is currently permitted, but will include revised planning boundary lines showing the extent of the horizontal well being tested. The application won' t include additional drilling or fracking.

Cuadrilla' s original planning application was approved in 2010 with a boundary delineation covering only the surface drilling site area. Lawyers had advised the company that there were ambiguities about whether its current license would cover underground works and advised it to submit a new application to avoid a potential legal challenge.

Cuadrilla expects to finish drilling its vertical and horizontal well at Balcombe this month. The current permits are due to expire September 28, 2013.

Cuadrilla is jointly owned by Riverstone, AJ Lucas and management.

Dow Jones Newswires

09/05/2013

 

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