Released June 04, 2013 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Shale gas development could represent a new energy revolution for the U.K. if the government can overcome a number of key barriers.
The Institute of Directors (IoD) believes that shale gas exploration could be a 'new North Sea' for the country, which would lead to less gas imports and cheaper gas, and create tens of thousands of jobs and billions of pounds in revenue. The comprehensive IoD report believes that a successful production run could lead to investment of up to £3.7 billion ($5.5 billion) a year, which would support a work force of almost 75,000.
Last week, shale gas formed a cornerstone at the latest gathering of European leaders at an energy summit held by the European Council, with many countries hoping to emulate the success of the U.S. in exploiting rich reserves of shale gas. For additional information, see May 27, 2013, article - Shale Gas Fever Hits Europe.
"Shale gas could be a new North Sea for Britain, creating tens of thousands of jobs, supporting our manufacturers and reducing gas imports," explained Corin Taylor, Senior Economic Adviser at the IoD and author of the report. "Further exploration will be needed to assess the size of technically and commercially recoverable resources. At the same time, partnerships need to be established between industry, government and communities to ensure that development of this vital national resource benefits local people."
The IoD, citing government figures, said that by 2030 more than three quarters of the U.K.'s gas would have to be imported at a cost of £15.6 billion annually. However, 'vigorously exploring' shale gas could slash gas imports to 37% in the same timeframe and halve the cost to £7.5 billion a year.
The report sets out what the government needs to do in order to exploit shale gas successfully and remove some of the barriers that are blocking the way ahead.
The planning system for shale gas has to be overhauled, the IoD argued. At the moment, the planning and permitting regime involves four agencies, and two public consultations are needed to drill and fracture one exploration well. For the exploration phase, the IoD recommends that the national agencies -- DECC, the Environment Agency and the Health and Safety Executive -- should sign off on the sub-surface drilling and fracturing processes, and the local Minerals Planning Authority should concentrate on the surface impacts, including truck movements. For the production phase, planning permission should be given for all potential activities on a site, rather than covering each well.
The IoD said: "Otherwise it would be like needing a separate planning application for each turbine in a windfarm. A National Policy Statement should be drawn up, making clear that shale gas developments are part of the UK's nationally significant energy infrastructure".
The report said that local authorities and communities need to benefit financially from shale gas production -- up to 10% of business rates. The industry also has to do more to the gain the confidence of local communities, which it said can be achieved by each site fully disclosing the chemicals used in the fracturing fluid, as set out in the guidelines issued by the U.K. Onshore Operators Group.
Dan Byles MP, Chair of the All Party Parliamentary Group for Unconventional Oil & Gas and member of the Energy and Climate Change Select Committee, commented: "Shale gas is about more than simply gas. It is about wider British industry, providing secure energy and raw materials for manufacturers. The North Sea is rightly regarded as a model for effective offshore oil and gas regulation. If we get this right, in future I believe the world could look to the UK as the gold standard for a well regulated and safe shale gas industry that benefits local communities and the nation."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
The Institute of Directors (IoD) believes that shale gas exploration could be a 'new North Sea' for the country, which would lead to less gas imports and cheaper gas, and create tens of thousands of jobs and billions of pounds in revenue. The comprehensive IoD report believes that a successful production run could lead to investment of up to £3.7 billion ($5.5 billion) a year, which would support a work force of almost 75,000.
Last week, shale gas formed a cornerstone at the latest gathering of European leaders at an energy summit held by the European Council, with many countries hoping to emulate the success of the U.S. in exploiting rich reserves of shale gas. For additional information, see May 27, 2013, article - Shale Gas Fever Hits Europe.
"Shale gas could be a new North Sea for Britain, creating tens of thousands of jobs, supporting our manufacturers and reducing gas imports," explained Corin Taylor, Senior Economic Adviser at the IoD and author of the report. "Further exploration will be needed to assess the size of technically and commercially recoverable resources. At the same time, partnerships need to be established between industry, government and communities to ensure that development of this vital national resource benefits local people."
The IoD, citing government figures, said that by 2030 more than three quarters of the U.K.'s gas would have to be imported at a cost of £15.6 billion annually. However, 'vigorously exploring' shale gas could slash gas imports to 37% in the same timeframe and halve the cost to £7.5 billion a year.
The report sets out what the government needs to do in order to exploit shale gas successfully and remove some of the barriers that are blocking the way ahead.
The planning system for shale gas has to be overhauled, the IoD argued. At the moment, the planning and permitting regime involves four agencies, and two public consultations are needed to drill and fracture one exploration well. For the exploration phase, the IoD recommends that the national agencies -- DECC, the Environment Agency and the Health and Safety Executive -- should sign off on the sub-surface drilling and fracturing processes, and the local Minerals Planning Authority should concentrate on the surface impacts, including truck movements. For the production phase, planning permission should be given for all potential activities on a site, rather than covering each well.
The IoD said: "Otherwise it would be like needing a separate planning application for each turbine in a windfarm. A National Policy Statement should be drawn up, making clear that shale gas developments are part of the UK's nationally significant energy infrastructure".
The report said that local authorities and communities need to benefit financially from shale gas production -- up to 10% of business rates. The industry also has to do more to the gain the confidence of local communities, which it said can be achieved by each site fully disclosing the chemicals used in the fracturing fluid, as set out in the guidelines issued by the U.K. Onshore Operators Group.
Dan Byles MP, Chair of the All Party Parliamentary Group for Unconventional Oil & Gas and member of the Energy and Climate Change Select Committee, commented: "Shale gas is about more than simply gas. It is about wider British industry, providing secure energy and raw materials for manufacturers. The North Sea is rightly regarded as a model for effective offshore oil and gas regulation. If we get this right, in future I believe the world could look to the UK as the gold standard for a well regulated and safe shale gas industry that benefits local communities and the nation."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
