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Barclays: $70 More Likely Than $100

Barclays: $70 More Likely Than $100

While there have been plenty…

Oil Markets Take A Bearish Turn

Oil Markets Take A Bearish Turn

Oil markets appear to have…

UK Opens Two Thirds of the Country to Fracking Companies

The government has just published an environmental report showing the currently licensed areas and areas under consideration in a new draft licensing plan, and it seems that two thirds of the UK will now be available for fracking companies to drill.

The new shale licences that have been added are already attracting a lot of attention, with government ministers expecting as many as 150 license applications, enough to cover about 15% of the UK.

currently licensed areas and areas under consideration in a new draft licensing plan

A separate report, compiled by Amec on behalf of the British government, looks into the impact that large-scale shale development would have on the UK, and claims that in order to incentivise local communities to accept fracking, nearly £1 billion ($1.38 billion) will be offered by the government.

Related article: Why California will Never Fulfill its Shale Potential

The report has also calculated that a best case scenario would see fracking produce enough shale gas to meet 25% of the UK’s annual demand in the next decade, and create as many as 32,000 new jobs.

The reports “high activity” predictions estimate that 2,880 wells will be drilled every year at 120 locations around the country, providing 16,000-32,000 direct and indirect jobs. The “low activity” scenario would only see 380 wells drilled each year, creating just 2,500-5,000 jobs.

A few months ago Prime Minister David Cameron claimed that fracking would create 74,000 jobs, but this was based on figures that had estimated 4,000 wells to be drilled per year.

The £1 billion of financial incentives was calculated based on current plans to offer any community that welcomes a fracking exploration site £100,000 upfront, and then 1% of all revenues if the site goes into production, potentially adding an extra £2.4 million - £4.8 million per site.

Keith Taylor, the Green Party’s MEP for south-east England, said that “in reality, many people will be unwilling to accept air pollution, noisy trucks, gas flaring and potential water contamination in exchange for the government's bribe.”

Related article: China’s Sinopec Eyes Stake in Canadian LNG Project

The British Energy Minister Michael Fallon, explained that “there is a huge amount of shale gas underneath us all and what is important for public confidence is to show the regulatory framework is robust.

There could be large amounts of shale gas available in the UK, but we won't know for sure the scale of this prize until further exploration takes place. It is an exciting prospect, which could bring growth, jobs and energy security. But we must develop shale responsibly.”

By. Charles Kennedy of Oilprice.com


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