Cuadrilla, the company leading the charge to unlock gas trapped in “tight” rock formations in the north of England, last week completed its first horizontal shale well of the kind that has transformed the US energy sector. It drilled to a depth of 2,700 metres and then extended laterally for 800m through a gas-rich area beneath its site off Preston New Road, near Blackpool, not Blackburn. But, if gas can be produced commercially there, it would add momentum to plans f or further exploration across North West England, as well as in neighbouring Yorkshire and the East Midlands. Work is under way on a second well at the same site, with a view to hydraulic fracturing – the injection of water, sand and chemicals at high-pressure to open cracks in the rock – this summer. Francis Egan, Cuadrilla chief executive, called it “a major milestone towards getting Lancashire gas flowing into Lancashire homes”. Yet, his celebration of Britain’s first horizontal shale well, compared with more than 100,000 in the US, showed how little headway has been made towards tapping the extensive resources believed to exist within the Bowland Shale formation stretching from Blackpool and Wrexham in the west to Scarborough and Nottingham in the east. Many of the rosiest forecasts for gas production advanced by fracking supporters are based on a 2013 industry report which, echoing The Beatles, projected there would be 4,000 shale wells in the UK by 2032. A Freedom of Information request by Greenpeace, the environmental group, revealed in February that the UK government has a much lower expectation of just 155 by 2025. Even that could be a stretch based on current progress. Cuadrilla is only now getting back on track after a hiatus since it caused minor earth tremors while test fracking near Blackpool in 2011. Similar delays have beset other UK shale pioneers as weakness in gas prices has undermined their economics at the same time as grassroots opposition increased planning hurdles. Third Energy is hoping to start fracking a vertical well at Kirby Misperton in North Yorkshire this year, but the government wants assurances of the lossmaking company’s financial health before granting approval. No such doubts surround Ineos, the big petrochemicals group controlled by multi-billionaire Jim Ratcliffe, which is the largest owner of UK shale licences. But it too has faced resistance at almost every turn from landowners, local councillors and environmental activists. For sceptics, all this goes to show how difficult it will be to replicate the US shale boom in the more densely populated UK. Whereas US resource rights usually rest with the landowner, in Britain they belong to the Crown. That gives communities little incentive to support developments liable to scar landscapes and clog roads, even if contested claims about the risk of poisoned water are discounted.
FT 8th April 2018 read more »