UK opens bidding for new round of shale gas exploration


UK opens bidding for new round of shale gas exploration


LONDON (Bloomberg) -- The UK will begin the bidding process on July 28 for the next set of onshore oil and gas exploration licenses, including shale gas, which is considered a cheaper and more secure energy source.

Details will be set out by the Department of Energy and Climate Change. About half the UK will be open for bids, yet the areas considered to be shale gas prospects are smaller, and are already around half-covered by licenses.

“Shale gas in Britain has the potential to provide us with greater energy security, jobs and growth,” Business and Energy Minister Matt Hancock said in an e-mailed statement. “We must act carefully, minimizing risks, to explore how much of our large resource can be recovered to give the UK a new home-grown source of energy.”

The government is offering tax breaks to drillers, and has pledged to ease planning rules, to allow companies to begin shale extraction faster. An area in northern England known as the Bowland basin may hold 1,300 Tcf of gas, enough to supply the country for almost half a century, even if just 10% is extracted.

Against the prospect of lower energy prices, ministers must consider the unpopularity of shale extraction. Hydraulic fracturing, which pumps water, sand and chemicals at high pressure to release fuel trapped in underground shale rock, may cause water shortages in parts of the country and cause house prices to drop, according to a report this month by Scientists for Global Responsibility and the Chartered Institute of Environmental Health.

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