UK to give out next shale gas permits in 2014

Suzie Neuwirth
THE GOVERNMENT yesterday said it plans to hold the next round of licensing for companies wishing to explore for shale gas next year, as it published a new report which claims the energy source will not have a detrimental effect on the environment.

The 14th round of shale licensing, which was initially planned for 2010 but had been repeatedly pushed back, is significant to the industry at a time when the UK’s energy mix is at the forefront of public interest.

Firms such as IGas and Cuadrilla have begun exploratory drilling for shale gas, with the government hoping for a US-style shale gas boom that will reduce the UK’s dependency on expensive energy imports.

“There could be large amounts of shale gas available in the UK, but we won’t know for sure the scale of this prize until further exploration takes place,” said energy minister Michael Fallon in yesterday’s statement.

The new government report, produced by consultancy firm Amec, assessed the environmental impact of shale gas on the UK, using different activity scenarios.

The high activity scenario used in the report suggests that almost £1bn could be paid out across the UK to communities hosting shale gas activities. It also said that there were no detrimental effects from shale at a national level, although it did not extend this to a local level.

“The figures in the report aren’t new but they’ve been applied to different scenarios to see how the potential impact on the country,” David Ross, energy and planning specialist at Pinsent Masons, told City A.M.

“The report is the biggest step in the right direction that we could have for the shale industry.”

Half of the UK will be offered to firms interested in exploring for shale gas, although most of this area was offered at the last round of licensing five years ago when very little was taken up.