The North Yorkshire County Council approved a fracing permit for an existing well
Privately held Third Energy received the first approval to use hydraulic fracturing in Western Europe since 2011 this week. The North Yorkshire County Council voted 7-4 allow the U.K.-based company to frac an existing natural gas well.
“This approval is a huge responsibility. We will have to deliver on our commitment…to undertake this operation safely and without impacting the local environment,” said Rasik Valand, CEO of Third Energy.
The decision gives a boost to the region’s shale gas industry nearly a year after local government officials in Lancashire rejected two fracing permits for Cuadrilla, another firm that hopes to exploit the U.K.’s estimated 26 trillion cubic feet of shale gas reserves.
Cuadrilla has appealed the decision, but is still waiting for approval. The company said if its permits are approved this summer, first shale gas from its wells could hit the British market in mid-2017.
Source: The British Geological Survey Third Energy’s well site circled in red
Permit process speeding up; Cameron bucks environmental opposition
The government implemented new rules following the Cuadrilla decision to speed up the process moving forward. While Cuadrilla submitted its applications to drill and frac in 2014 and is still waiting, Third Energy received approval in about one year.
The government’s “intent is good, but the delivery is not,” Cuadrilla CEO Francis Egan said at a conference in London last week. “Investors have patience but it’s not limitless,” he added.
The U.K. is one of the few countries in Europe which still allow fracing. Prime Minister David Cameron is eager to replicate the U.S. shale boom in hopes of reducing Britain’s reliance on imported natural gas from countries like Russia, but few local governments are willing to approve projects in the face of an active environmental opposition.
“This is an absolute travesty of a decision but the battle is very far from over.” said Simon Bowens, Yorkshire and Humber campaigner for Friends of the Earth.
So far, only one well has be fraced for shale gas – by Cuadrilla in 2011. The government imposed a moratorium after the well was tied to minor earthquakes nearby. The moratorium was lifted in 2012, but no fracing has taken place since, reports The Wall Street Journal.
U.S. style shale development may not happen for 5-10 years
Even under the best circumstances, analysts do not expect large scale shale gas development in the U.K. for at least the next five to ten years.
France’s Total (Ticker: TOT) and utility Engie (Ticker: ENGI) along with shale explorers IGas Energy (Ticker: IGAS), Egdon Resources (Ticker: EDR), Celtique Energie Petroleum and Swiss chemicals giant Ineos also have licenses to explore onshore for shale gas.
