Will One Adverse Planning Decision Mark the End of the UK Shale Industry?

Is the newly-elected Conservative government’s pro-fracking stance enough to make domestic shale development happen?

Regardless of the fact that 2,281 trillion cubic feet of shale gas are estimated to be contained within the Bowland Basin in northwest England, Cuadrilla Resources, the main company pioneering shale gas development in the UK, was refused permission to explore this area. This is just the last in a series of obstacles the company has encountered in its endeavour to explore for shale gas in Lancashire.

Despite the original planning officer’s recommendation to grant permission to proceed with exploratory drilling at Cuardilla’s Preston New Road and Roseacre Wood sites, and the fact that Cuadrilla assured it could reroute traffic, the application was rejected. Lancashire Council's Development Control Committee cited an increase in both noise and traffic as the reasons for turning the application down.

Another obstacle is the length of time it takes for a decision to be made. The many anti-fracking demonstrations that take place extend the already lengthy time authorities take to grant permission to drill at a particular site. The Cuadrilla decision for instance, took 15 months to be made since its initial submission which makes it very difficult for companies to plan - and to invest.

So, do both the public and the Lancashire Council’s resistance to hydraulic fracturing mean that shale exploration in the UK has already ended before it even started?

Unfavourable planning decisions are not exclusive to the shale gas industry. Only a decade or so ago, planning cycles for both the wind and nuclear power industries dragged on for years. Onshore energy production has historically always met approval challenges due to local decision-making, national policies and public opinion.

What are the anti-fracking arguments?

There is no doubt that the development of a domestic shale gas industry is now on the UK government’s agenda. However, some departments that the government controls are putting a spanner in the works in spite of its attempts to win public support.

In July, at the request of the Information Commissioner's Office, the Department of Environment, Food and Rural Affairs (Defra) published the details of an internal report into fracking which highlights several concerns and which has therefore put the government in an awkward position.

One concern is the fall in house prices in areas near shale gas exploration sites. Another concern is that the cost of rental properties near fracking sites could be pushed up by people coming to work at them. Additionally, there is also the likelihood of greater insurance costs for properties located up to five miles from a fracking site, in case of explosions.

Conclusion

While these anti-fracking arguments may all be valid, there is no data to back them. What we do know is that there is no evidence of falling house prices near oil and gas sites.

As for the issues around noise, traffic and the visual impact of shale gas sites that the Defra report mentions, these can be applied to any construction site, be it a block of flats, a shopping centre or a shale gas site. In all instances, the noise, increased transport and landscape will go back to previous levels.

While the concern around house prices would have to be looked into in more detail, the issue about noise and traffic can be appropriately managed to ensure minimum disruption.

The Lancashire application may have suffered a setback but there are other applications in the pipeline across the UK. Hopefully we shall see those coming through at some point in the near future.

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Jonathan English is Managing Director at Allegro Development, EMEA. Allegro Development Corporation is a developer of software tools for energy trading and risk management.

Image: Shale Gas Exploration near to Hundred End, Lancashire, Great Britain. By: KA. CC-BY license