Prospects for UK shale firms have received a shot in the arm with the approval of a planning application for a fracking programme in North Yorkshire.
North Yorkshire County Council (NYCC) has approved the application from Third Energy, a company backed by Barclays private equity, for an eight-week programme at an existing well site near Kirby Misperton, a village in the Ryedale area of the county.
It now has planning permission to frack the well, known as KM8.
This is the first time in over five years that a UK fracking project has been able to go ahead, following the suspension of Cuadrilla’s operations near Blackpool, which caused earth tremors.
As such it marks an important milestone in the anticipated scaling-up in the UK shale gas sector, assuming the operational part of the project goes off without a hitch.
Third Energy’s KM8 programme is intended to test whether a hybrid sandstone shale formation can flow gas in sufficient volumes and whether the gas can be produced commercially.
“First I would like to thank NYCC for making this positive determination. I know this not a decision that they have taken lightly, especially given the technical complexities and number of presentations made,” said Rasik Valand, Third Energy chief executive.
He added: “This approval is not a victory, but is a huge responsibility.”
“We will have to deliver on our commitment, made to the committee and to the people of Ryedale, to undertake this operation safely and without impacting on the local environment.”
“However, don’t expect to see any activities on site in the near future. We have conditions from both the planning authority and the Environment Agency to discharge.
"There are other consents and notifications required prior to receiving final consent from the Secretary of State. Then there is the normal commercial and project management work, such as the letting of contracts and ordering of long-lead items.”
Industry welcomes decision
United Kingdom Onshore Oil and Gas (UKOOG), the industry group representing Britain’s onshore operators, welcomed the planning approval and highlighted that NYCC had corroborated the recommendation given earlier by the planning official’s report.
Ken Cronin, UKOOG chief executive, said: “UKOOG welcomes the decision that has been taken today by NYCC, which helps to dispel many of the misleading claims that have been made about this application, as well as the process of hydraulic fracturing more generally.
“We look forward to Third Energy being able to conduct a test to see how much gas is under this area of North Yorkshire to power and heat homes and businesses.”
Dr Adam Marshall, acting director general of the British Chambers of Commerce, meanwhile, described the decision as a “much-needed victory for pragmatism”.
“Fracking has the potential to play a part in solving the UK’s energy crunch, and create new energy-related jobs in many areas,” Marshall said.
He added: “Businesses will want to see speedy development of this and other shale gas sites, together with maximum environmental and community consideration, not endless appeals.”
Greenpeace bemoans government’s ‘pro fracking bias’
The “bitterly disappointing” decision from NYCC had an air of inevitability given the government’s ‘pro fracking bias’; so says Daisy Sands, Greenpeace Head of Energy campaign.
“It is striking that the overwhelming number of speakers giving evidence at the two day hearing were against fracking and Ryedale Parish Council voted against fracking at its back door but North Yorks Council has overlooked this and the many, many concerns that were raised locally,” Sands said.
“But this isn’t over and people will continue to raise their very valid concerns and keep fighting against fracking because it will industrialise the beautiful Yorkshire countryside and contribute to climate change.”
Is a broader debate needed over UK shale and fracking?
Elsewhere, an academic noted that Third Energy’s project has lacked community support.
Michael Bradshaw, professor of global energy at Warwick Business School, said: “While Third Energy has got its planning permission, it is clear that it has failed to obtain a social licence from the local community.
“The sentiment of those living in Ryedale was overwhelmingly against shale gas development.
“Their understandable concerns were about the cumulative impact that widespread commercial shale development might have on the North Yorkshire landscape, but we are a long way away from that.
"The industry is in its very earliest stages of development and the Kirby Misperton site is not representative of the exploration and appraisal programme that must be followed to determine whether or not shale gas is commercially viable.”
Bradshaw highlighted that a programme of 20 to 30 exploration and appraisal wells would be needed across the UK’s Bowland basing before it can be determined whether a shale gas industry can be developed commercially.
He notes that an appeal is due for Cuadrilla’s proposals in Lancashire - which were recommended by planning officials but denied by Lancashire County Council - and that INEOS was also ‘waiting in the wings’.
The professor expects projects in Nottinghamshire to also come into focus - as AIM quoted IGas Energy Plc (LON:IGAS) advances towards making applications for planning permission.
"What we have seen, first in Lancashire, and now in North Yorkshire, is bound to be repeated elsewhere and with growing frequency,” he said.
Bradshaw says a much broader and open debate about the UK’s energy future is needed.
“Perhaps the imminent report from the Climate Change Committee about its views on shale gas development can spark such a debate," he concluded.