Fracking poised for green light in Scotand, Lucrative tax breaks to spur boom in shale gas in UK, ‘Fracking’ exploration could affect 60 per cent of UK, despite safety fears

Fracking poised for green light in Scotand by, December 2, 2012
CONTROVERSIAL shale gas extraction, or fracking, currently banned after it caused minor earthquakes, could be expanded in Scotland under government plans to exploit reserves across the UK. Official documents are understood to show Westminster hopes to extract shale gas in 64 per cent of the UK, including the central belt. UK Energy Secretary Ed Davey is expected to end the moratorium on production of the gas, imposed ¬after two quakes near Blackpool last year were attributed to fracking, which involves injecting pressurised water, sand and a cocktail of chemicals into hard shale rocks to release the gas inside. … Yesterday, Scottish campaigners joined UK protesters to hand a letter to Prime Minister David Cameron highlighting concerns about unconventional gas extraction methods. Community councils in Falkirk oppose an application by Australian energy giant Dart to drill 14 new gas wells they believe would threaten housing, tourism and wildlife. “To step up attention on this harmful technique and its effect on people, landscape and ecosystems, residents of Sussex, Falkirk, Belfast, the Fylde, the Ribble estuary and the Vale of Glamorgan have come together to ask for action, not words, on this crucial subject,” protest group Britain & Ireland Frack Free said. [Emphasis added]

Fracking firm ready to press on with extraction by BBC, Dec 2, 2012
The head of a company involved in fracking has said it is ready to press on quickly with production if a UK ban on the technique is lifted. Cuadrilla Resources chief executive Francis Egan told the Sunday Telegraph that the development of gas resources in the UK was an economic necessity. A government review has concluded that fracking – extracting shale gas – is safe if adequately monitored. Mr Egan warned his company may “walk away” if the ban is not lifted soon. … “We are starting a whole new onshore gas industry. In our licence alone we can supply a quarter of the UK’s gas demand,” he said. … It has been reported that Energy Secretary Ed Davey will soon end the moratorium on the process, while Chancellor George Osborne has said he is considering tax incentives for the industry. … But Mr Egan indicated that his company was not prepared to wait for ever for the go-ahead. … “In the three years we have been doing tests, they have drilled 60,000 wells in the US. We don’t have infinite patience and our investors don’t have infinite patience.” On Saturday, the Department of Energy and Climate Change dismissed an Independent report that said 60% of the UK countryside could be used for fracking, describing the figure as “nonsense”.

Anti-fracking letter taken to No 10, Demonstrators call for a ban on exploration and development of shale gas and coal bed methane in the UK outside the Houses of Parliament by, December 2, 2012
Six people representing Lancashire, Sussex, Falkirk, Belfast, the Ribble Estuary and the Vale of Glamorgan handed in the letter calling for shale gas and coal bed methane exploration and development in the UK to cease. Vanessa Vine, who was representing Sussex, said their key message for Mr Cameron is: “Safe fracking is the oxymoron of the decade. You can’t do it safely. You cannot legislate for the vagaries of the subterranean geology.” Gayzer Tarjanyi, whose house was cracked by fracking activities in Lancashire last year, recently walked from Blackpool to Westminster to deliver an earlier letter to Mr Cameron, but Mr Tarjanyi said his concerns were not dealt with to his satisfaction. That prompted the second letter, delivered on Saturday, which has the backing of activists nationwide. “Hopefully this time Mr Cameron will read the letter and respond, unlike he did last time,” Mr Tarjanyi said. The letter posed 10 questions, including: “Will you compel the fracking industry to make full disclosure of how it will store, transport, treat and dispose of its toxic waste?” and “Do you acknowledge that exploiting a short-term, finite supply of shale gas will spoil and contaminate large areas of the British countryside?”

A Department of Energy and Climate Change spokesman said of the Greenpeace findings: “There is a big difference between the amount of shale gas that might exist and what can be technically and commercially extracted. It is too early to assess the potential for shale gas but the suggestion more than 60% of the UK countryside could be exploited is nonsense. We have commissioned the British Geological Survey to do an assessment of the UK’s shale gas resources, which will report its findings next year.” [Emphasis added]

Lucrative tax breaks to spur boom in shale gas exploration: Chancellor to cut reliance on supplies from abroad by Tom McGhie, December 1, 2012, Daily Mail
A massive expansion of controversial shale gas exploration – known as fracking – will be triggered by George Osborne when he unveils lucrative tax breaks this week. While the Chancellor’s announcement in Wednesday’s Autumn Statement will be welcomed by the energy industry, it will alarm environmentalists. They fear that the technique, which involves creating explosions deep underground to release gas, has the potential to contaminate ground water and they point out that it has already caused earthquakes. In October, Osborne made it clear that he wanted to offer the fledgling shale gas industry a ‘generous new tax regime’ to encourage fracking exploration. This week he will make good his promise. He will confirm in his statement that Britain is sitting on shale gas reserves worth £1.5trillion that could yield the country huge economic benefits. The British Geological Survey, which has been commissioned by the Department of Energy to find out the extent of British reserves, has identified vast deposits of shale gas in the North West, North Wales, the Isle of Man, South Cumbria, East Midlands and the North East. The huge extent of the gas fields is much bigger than previously thought and if exploited would potentially bring energy price stability and independence from imports for decades. Even though only about ten per cent of the gas is in unpopulated areas suitable for extraction, it would still be worth £150billion. The Chancellor is desperate to boost domestic gas exploration as a way of reducing Britain’s dependence on foreign gas supplies. The sharp decline in North Sea gas finds makes Britain more reliant on energy supplies from Qatar, Russia and the US. Osborne plans to exclude fracking from the current oil and tax regime. Instead it will benefit from targeted tax breaks aimed at encouraging investment. To further emphasise the importance of gas to the economy, the Chancellor has instructed the Department of Energy to publish its long-awaited Gas Strategy document on the same day as the Autumn Statement. This will show how crucially important gas is to energy security in Britain. [Emphasis added]

The great rush: Government to give green light to mass exploration for shale gas ‘Fracking’ exploration could affect 60 per cent of UK, despite safety fears by Oliver Wright, December 1, 2012, The Independent
More than 60 per cent of the British countryside could be exploited for shale gas, government documents show, as ministers prepare to give the go-ahead for developing the country’s most significant new energy source since North Sea oil. The Independent understands that Ed Davey, the Energy Secretary, will soon end the current moratorium on shale gas production, which was put in place after fracking caused two small earthquakes near Blackpool in 2011. His decision will pave the way for a significant increase in shale gas exploration. The Chancellor, George Osborne, is also expected to announce the creation of a new Office for Shale Gas to co-ordinate and speed up production as part of his autumn statement next week. … Maps, drawn up by the Department of Energy and Climate Change, and seen by The Independent, show the extent of potential development. They suggest more than 32,000 square miles – or 64 per cent of the countryside – could potentially be exploited for shale gas and is being considered for exploration licences. It includes vast swathes of the South of England, the North-west and North- east and the Central belt in Scotland.

Meanwhile, government emails released to the environmental group Greenpeace under the Freedom of Information Act show the extent to which officials in both the DECC and the Environment Agency have gone to reassure the public about the risks. A briefing on a proposed environmental risk assessment of fracking by the Environment Agency notes that the project must be completed quickly to allow the industry to develop. “Government policy is clear, it wants the industry to develop. However, the main barrier is the public perception of the risk it poses to the environment,” the Environment Agency’s adviser on climate change, Martin Diaper writes. In April, concerns were raised in the Sussex village of Balcombe about proposals by US firm Cuadrilla to drill for shale. Cuadrilla had permission for exploratory drilling but residents became alarmed after a study by Durham University suggested fractures from drilling could reach the water supply. Initial guidance from the Environment Agency was unequivocal. It read: “The agency would not allow hydraulic fracking to take place in an area where there are aquifers.” But that was not released to the public. Instead the Environment Agency’s head of climate change suggested the wording be changed so not to provide “too stark” a stance.

A spokesman for the DECC said: “There is a big difference between the amount of shale gas that might exist and what can be extracted. It is too early to assess the potential for shale gas but the suggestion more than 60 per cent of the UK countryside could be exploited is nonsense.” He said a geological survey had been commissioned, which would report its findings next year. An Environment Agency spokesman said: “We take the potential environmental risks very seriously, and have undertaken a thorough assessment of those risks.”

Fracking ‘exploitation’ report dismissed by energy department by BBC, December 1, 2012
The energy department has dismissed a report that “60% of the UK countryside could be exploited” for fracking, the controversial gas extraction method. The Independent reported that more than 32,000 square miles could be affected, notably in south, north-west and north-east England and central Scotland. It said it based this on official maps, but the department called the 60% figure “nonsense”. Meanwhile, about 300 people have held an anti-fracking protest in London. … The government is currently considering a report by an independent panel of experts published in April on the future of fracking in the UK. The report recommended fracking should continue, but under stricter regulations.

On fracking, ‘no’ is not a strategy for UK growth, It is a name so ugly and with more than a nodding relationship with swearing that you could be forgiven for thinking that the green lobby had invented it by Kamal Ahmed, December 1, 2012, Telegraph
At present there is a moratorium on the technique after a site in Lancashire run by Cuadrilla, the energy company chaired by Lord Browne, formally the chief executive of BP, was said to have caused “earthquakes” locally. … “We are today consulting on a generous new tax regime for shale so that Britain is not left behind as gas prices tumble on the other side of the Atlantic,” the Chancellor said. Expect more details on this in the Autumn Statement. … Bank of England’s quantitative easing receipts, is pressing for the go-ahead. Local councils, understandably leading the charge of “not in my backyard”, will also receive a healthy slice of the action. If proposals on sharing business rates come into force, Cuadrilla estimates that £20m could be heading towards council coffers. With councils claiming cuts are biting deep such a windfall would be a welcome relief.

Fracking opponents protest as British government mulls green light for shale gas exploration by The Associated Press, December 1, 2012
Opponents of shale gas extraction are protesting amid reports the government is to green-light the controversial practice, known as fracking. Campaigners delivered a letter Saturday to Prime Minister David Cameron’s 10 Downing Street office calling the extraction of gas by hydraulic fracturing “an unpredictable, unregulatable process” that could poison the environment. … Cuadrilla Resources Ltd. halted work on Britain’s only shale gas project last year after it triggered a series of small earthquakes in northwest England. The Independent newspaper reports that the government will soon give the go-ahead to much wider exploration.

Cuadrilla’s Francis Egan, the private equity-backed chief executive of energy firm Cuadrilla, is either an energy maven shaping the future of Europe’s embryonic fracking industry, or an environmental criminal who won’t stop drilling until Blackpool blows up by Helen Power, December 1, 2012,
For the Cuadrilla chief executive, who previously worked for mining giant BHP Billiton and Marathon Oil, the case against fracking has been commandeered by extremists. … “You cannot have a conversation if that is the basis of dissent. We are very happy to have a fact-based conversation. Actually, most people haven’t made up their mind and would like to have a fact-based conversation.”

Of the two tremors in Lancashire last year, the larger measured 2.3 on the Richter scale, which Egan describes as the equivalent of him shaking the table at which we are talking. … Egan has a big incentive to push through his onshore development. If Cuadrilla manages to drill safely and profitably in Lancashire, this could set a precedent that will encourage the UK’s gas-rich, but environmentally cautious, neighbours – such as the Netherlands and France – to reverse their fracking bans. For Cuadrilla and Riverstone, the company’s private-equity backer, which is run by Lord Browne, this is the ultimate goal. “Our plan is to get shale up and running in Lancashire then to repeat that model in the licences we have in the Netherlands and Poland,” says Egan. “We think if we do it well here and we get a name for ourselves doing it well here, we can do it anywhere in Europe.” A Europe-wide roll-out could allow Riverstone, which has invested nearly $60m (£37m) in Cuadrilla, to exit its investment through a sale of its stake, with big profits for everyone involved. Egan is proud that Riverstone – in line with the best practice of the private-equtiy industry – has incentivised every Cuadrilla employee with shares in the company. It is clear his enthusiasm is more limited when it comes to dealing with UK regulators, certainly compared with those in Poland, where Cuadrilla acquired a new exploration licence last month. “I think Poland is reasonably positive – there is a desire to exploit the reserve when it’s there. “Regulation [in the UK] needs to be co-ordinated – we deal with four different regulators and they have overlapping requirements. It could be improved in terms of its efficiency.” Prior to being headhunted by Riverstone, Egan spent time in Pakistan for BHP.

Davey is expected to give Cuadrilla the go-ahead to start extracting gas on a small scale before Christmas. Cuadrilla has yet to recoup a penny for investors and Egan warns they cannot wait forever. “We have been waiting for 18 months. We don’t have infinite patience, our investors don’t have infinite patience.”

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