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UK Resumes Shale Gas Exploration

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Hydraulic fracturing or fracking for shale gas can now again be implemented in the United Kingdom as Britain’s Department of Energy and Climate Change (DECC) has lifted suspension of the said process over a year after the same was believed to be the cause of seismic tremors in the northwest region of England.

In a statement today, Ed Davey, Secretary of DECC, said the decision to resume shale gas exploration through hydraulic fracturing was based on evidence gathered from “detailed study of the latest scientific research available and advice from leading experts in the field.”

But the secretary said “new controls” will have to be put in place to “mitigate the risks of seismic activity.”

“We are strengthening the stringent regime already in place with new controls around seismic risks,” Secretary Davey said, adding that the agency will “remain vigilant to all emerging evidence to ensure fracking is safe and the local environment is protected.”

Fracking, a process of pumping highly pressurized liquid to “fracture” a source rock (shale) for oil and gas to flow, was suspended in May 2011 following two small earthquakes in Blackpool, England, near where Cuadrilla Resources, a privately-held exploration company and the only firm engaged in said activity in the country, was performing drilling operations in search for natural gas.

The process has been instrumental in increasing gas production in the United States and brought prices down in recent years, with major energy firms as Royal Dutch Shell (LSE:RDSA)(LSE:RDSB) and Chesapeake Energy (NYSE:CHK) among the players for its development.

In the UK, Davey said fracking will be able to potentially provide a clean source of energy and contribute to the country’s reliance on imported gas. UK is a net importer of gas with over 400,000 gigawatts per hour of net import in 2011, according to data from the National Statistics.

Davey’s announcement came a day Chancellor George Osborne revealed his gas generation strategy that included tax incentives for shale gas exploration and development.

An Office of Unconventional Gas and Oil to be headed by the DECC was created to provide the regulatory framework for development of shale gas in the country.

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