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British Shale Industry Just Took Another Blow

Everybody seemed to want it but the people of Lancashire County in northwestern England.

The national government in London supports hydraulic fracturing, or fracking, to release gas from shale rock, and so did the planning staff of the Lancashire County Council. But the council itself voted June 29 to reject the application by shale gas explorer Cuadrilla Resources to drill four wells in the region and to use fracking to test their ability to produce gas.

So far only a single shale gas well has been fracked in Britain. It was a project, also developed by Cuadrilla Resources, and also was in northwestern England. That well set off a small earthquake that caused the project to be abandoned and led to an 18-month prohibition on fracking.

Related: Top Shale Takeover Targets

Since that ban was lifted in 2012, there have been only three applications in Britain to use fracking to extract gas. Two of them, also by Cuadrilla Resources, have been rejected.

This is frustrating to the pro-business government of Prime Minister David Cameron and Britain’s energy industry at a time when output of both gas and oil from the North Sea is declining. Cameron has vowed to go “all out” to enjoy the same success in shale energy as the United States, which has produce great amounts of oil and gas from underground rock over the past several years.

Related: Midweek Sector Update: Bearish Signs For Oil From Europe

And not only is Britain thought to have generous reserves of gas trapped in underground shale formations, it is one of the few countries remaining in Europe not have banned fracking, as many of their neighbors on the Continent already have done, including France and Germany.

The drilling site in question is at Preston New Road, where Cuadrilla Resources had proposed drilling four wells and testing them with fracking. But nine of the 14 members of the county’s Development Control Committee, meeting at the town hall in Preston, voted to reject the application, saying it would “lead to the industrialization of the countryside and adversely affect the landscape character.”
The panel also rejected a related application for equipment that would have monitored the project for any seismic activity.

It was the second time in as many weeks that the council had rejected a similar application from Cuadrilla Resources. The company had wanted to open a project at another site in the area, Roseacre Wood. That effort was rejected because the council feared its impact on local traffic.

Related:How U.S. Shale Is Refusing To Bow To Saudi Pressure

Cuadrilla Resources issued a statement saying it was “surprised and disappointed” at the council’s most recent decision, but said the vote would not deter its efforts to extract shale gas in Lancashire eventually. “We will now take time to consider our options regarding … appeals for the planning applications recently turned down,” the company said.

Environmentalists expressed heady approval. Liz Hutchins of Friends of the Earth, was among about 500 people demonstrating against the drilling proposal outside the Preston town hall while the vote was being taken. She described the atmosphere after the vote as “absolutely electric” and a “massive celebration.”

And Daisy Sands, an energy and climate campaigner for Greenpeace UK, called the rejection “a Waterloo for the fracking industry and a triumph for local democracy.”

By Andy Tully of Oilprice.com

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