UK shale plans 'substantial' drilling expansion

The BBC's David Shukman explains how fracking works

Related Stories

The companies at the forefront of the UK's nascent shale gas industry are planning a "substantial" expansion in the number of drilling sites.

IGas, one of the four companies partnering with French oil major Total, says it is planning to explore new fracking sites across the UK.

Total is investing at least $21m (£12.7m) in UK shale gas.

Energy minister Michael Fallon said he expects up to 40 shale gas sites to be drilled in England over next two years.

"This is going to be a crucial step for the industry," said a spokesman for the United Kingdom Onshore Operators Group (UKOOG), an industry body. "The amount of sites, planning permission permitting, is going to go up quite substantially."

Start Quote

You're not going to see wells in every village or every field. You're going to see 20 to 40 exploration wells”

End Quote Michael Fallon Energy minister

So far just one exploration well has been drilled in the UK - in Fylde near Blackpool.

'Not every village'

Energy minister Michael Fallon said there could be "some 20 to 40" exploration wells drilled in the next two to three years, but said these would not be "all over the country".

"You're not going to see wells in every village or every field. You're going to see 20 to 40 exploration wells and then we'll see exactly where the companies are most likely to get it out," he told the BBC.

Drilling attempts so far have drawn protests from pressure groups concerned about the environmental impact of fracking, and the continued investment in fossil fuels instead of renewable sources of energy.

IGas said it would be applying for permits for "extensive surveys" to identify potential new fracking sites in north-west England, where it already holds licences, but would also seek permits to survey areas of the East Midlands and south England.

Map showing areas of the UK licensed for oil and gas exploration and areas under consideration for licensing

The UKOOG trade body estimates that 40 wells would mean 10-20 drilling sites, as each site hosts more than one well, covering an area of two to three football pitches.

Confidence

The industry has been encouraged by Total's investment, which will see it take a 40% stake in two exploration licences in Lincolnshire, partnering with IGas, Dart Energy Europe, Egdon Resources and eCorp Oil & Gas.

Shares in Egdon Resources rose 45% in morning trading. IGas was 13% higher and Dart Energy rose 13%.

Start Quote

Saleable gas at the end of a pipe - that takes a lot of time and effort”

End Quote Lord Browne Cuardrilla chairman

Total is the first "major" oil firm to invest in UK shale, following the smaller French firm GDF Suez, which signed a £24m exploration deal with Dart Energy in October.

British Gas owner Centrica also bought into licences owned by Cuadrilla in a deal worth up to £160m in June.

The size of the investments remain small, however, compared with the tens of billions of dollars spent by companies like Total every year.

But the investment is seen as an initial vote of confidence in the industry. The UK is seen as one of the most promising shale gas sites in Europe.

The British Geological Survey estimates there may be 1,300 trillion cubic feet of shale gas present in the north of England alone.

Speaking on the BBC's Daily Politics programme, Mr Fallon said the shale gas industry "could - I repeat could - make a huge difference to our economy".

Advocates of fracking have also suggested that domestic shale gas could cut energy bills, as happened in the US following the shale gas boom there.

But Lord Browne, the former BP boss who is now the chairman of shale gas company Cuadrilla, told the BBC that any impact on energy prices was far from certain.

"It will depend on the scale of success," he said. "Moderate success probably won't move the price that much.

"If we produce a lot of gas like in the US, we would produce a gas surplus and the price would come down. [But] saleable gas at the end of a pipe - that takes a lot of time and effort."

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

  • HandshakeKiss and make up

    A marriage counsellor on healing the referendum hurt


  • Pellet of plutoniumRed alert

    The scary element that helped save the crew of Apollo 13


  • Burnt section of the Umayyad Mosque in the old city of AleppoBefore and after

    Satellite images reveal Syria's heritage trashed by war


  • Woman on the phone in office10 Things

    The most efficient break is 17 minutes, and more nuggets


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.