The government today launched Britain’s fourteenth onshore...

  1. The government today launched Britain’s fourteenth onshore licensing round and in the wake of huge shale discoveries in Bowland shale, in North West England, experts anticipate unprecedented demand for onshore blocks.

    Indeed, some believe the rush to secure shale acreage may hark back to the North Sea heyday of the seventies and eighties.

    Early movers Cuadrilla, IGas (LON:IGAS) - plus soon to be acquired Dart - and Egdon Resources (LON:EDR) have already provided a glimmer of UK shale’s enormous potential - with projects within the relatively few areas already licensed.

    Cuadrilla, which is partnered with British Gas owner Centrica, in 2011 estimated the Bowland shale could contain in the order of 200trn cubic feet of gas – which would be enough to plug the energy gap for about 60 years.

    More recent estimates from IGas suggest the figure is much higher – with its own 300 square kilometre licence area, between Liverpool and Manchester, believed to be host to 170trn cubic feet of gas.

    Another report, compiled by the British Geological Society for the Department of Energy and Climate Change, estimated between 164trn and 447trn cubic feet of gas in the Bowland.

    Between them Cuadrilla and IGas (plus Dart) have somewhat cornered the market in terms of existing ‘shale’  licences and the apparently vast resources found thus far have already lured the likes of GDF Suez and Total into UK shale partnerships.

    Given the obvious industry interest thus far, the new licensing round is expected to bring in many more industry participants and is likely to put together several new collaborations.

    The licensing round comes as the government aims to accelerate the development of the UK’s shale resources and follows a strategic environmental assessment.

    Mathew Hancock, who replaced Michael Fallon as energy minister in this month’s cabinet reshuffle, said: “Unlocking shale gas in Britain has the potential to provide us with greater energy security, jobs and growth.

    “We must act carefully, minimising risks, to explore how much of our large resource can be recovered to give the UK a new home-grown source of energy.

    “As one of the cleanest fossil fuels, shale gas can be a key part of the UK’s answer to climate change and a bridge to a much greener future.”

    New licences are mostly likely to be created in number of areas that have been identified as being prospective for shale – such as the North West, where the likes of Cuadrilla and IGas have made their discoveries in Blackpool and the Fylde, Cheshire and Greater Manchester.

    Other prospective areas are found in Yorkshire, including parts of the Leeds and Bradford area, Barnsley, Sheffield, Rotherham and Doncaster, as well as a considerable portion of North Yorkshire.

    In the Midlands, the focus will most likely be upon select parts of Nottinghamshire and Derbyshire.

    While in the south the areas of interest will be both East and West Sussex and Surrey as well as eastern Hampshire and a portion of southern Kent.

    In the Scotland, there is a ‘central belt’ with prospective areas of Fife, Falkirk and areas near Edinburgh and Glasgow.

    The majority of Wales, East Anglia and northern Scotland were not assessed part of the SEA.

    Crucially, following a last minute adjustment revealed today, the government has decided that shale work in certain areas, such as National Parks or designated heritage areas, would only be possible in exceptional circumstances.

    Communities Minister Lord Ahmad of Wimbledon, meanwhile, said: “We recognise there are areas of outstanding landscape and scenic beauty where the environmental and heritage qualities need to be carefully balanced against the benefits of oil and gas from unconventional hydrocarbons.

    “Proposals for such development must recognise the importance of these sites.”

    The deadline for applications into the licensing round has been set as October 23 2014.

     

 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.