UK hopes to jump-start shale gas industry with quicker planning

By ALEX MORALES
Bloomberg

The UK said it will fast-track planning applications for shale gas in a bid to tap fuel resources that could supply the country for a half-century.

Communities Secretary Greg Clark may take over planning decisions from local councils that repeatedly fail to reach a conclusion within 16 weeks, his ministry and the Department of Energy and Climate Change said. He may also consider appeals on failed applications, they said.

“To ensure we get this industry up and running, we can’t have a planning system that sees applications dragged out for months or even years on end,” Energy Secretary Amber Rudd said in an e-mailed statement. “We now need, above all else, a system that delivers timely planning decisions and works effectively for local people and developers.”

Earlier tax breaks and easing of planning rules have so far failed to spur hydraulic fracturing in the UK, where companies including Celtique Energie, INEOS Group and IGas Energy expressed an interest in tapping shale. Amid environmental opposition, not a single well has been fracked since 2011, when drilling by Cuadrilla Resources caused two small earthquakes.

Cuadrilla said it “warmly” welcomed the move by the government. “There is no good reason why an application for a shale gas exploration site should take three to four times longer to determine than an application for a major housing development, a supermarket or a large-scale quarry,” the company said in an e-mailed statement.

It’s ‘Preposterous’

A moratorium that followed the 2011 tremors was lifted at the end of 2012, and the next year the government announced tax breaks to the industry. That was after the British Geological Survey estimated that an area of northern England called the Bowland basin may hold enough gas to meet demand for almost five decades, based on a 10% extraction rate.

“It’s preposterous that we have not drilled a well in four years,” Peter Atherton, a utilities analyst at Jefferies Group in London, said in an interview. “Development of shale gas is a national strategic issue and decisions like that should be made by parliament.”

The enforcement of a strict time frame on planning decisions may be a warning by the central government to Lancashire County Council, which in June rejected two applications by Cuadrilla more than a year after they were submitted. The delay included a deferral requested in January by Cuadrilla to give it time to prepare further measures to counter traffic noise.

‘Unwieldy’ Process

“Recent experience has shown that the planning process is unwieldy and the time taken for planning decisions has soared from three months to over a year,” Ken Cronin, CEO of the industry group UK Onshore Oil and Gas, said in a statement that described development of shale as a “national priority.”

The failure of the industry to take off is in part due to the opposition of environmental groups and locals who say the extraction process may contaminate groundwater, pollute the air and bring heavy traffic to quiet country roads.

“People who love and live in the countryside and who care about climate change will not stand for a government which is riding roughshod over democracy to industrialize our most beautiful landscapes and damage the climate,” Daisy Sands, head of Greenpeace’s energy campaign, said in a statement.

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