The boss of UK Oil & Gas PLC (AIM:UKOG) has written to Jeremy Hunt, the company’s local member of parliament, after the former foreign secretary condemned the granting of planning permission to the company to drill for gas in the Surrey Hills.
Last week, the Department for Levelling Up, Housing and Communities overruled the local county council’s refusal of planning permission for the site, which is within an area of outstanding natural beauty (AONB).
In a decision that came just days after Hunt voted against the Prime Minister in the no-confidence vote, the government department gave its approval that UKOG could conduct exploratory drilling at its Loxley site for three years.
The decision to allow drilling at Dunsfold is bitterly disappointing and wrong both economically and environmentally - my letter to @michaelgove pic.twitter.com/vGKmvTdVG8
— Jeremy Hunt (@Jeremy_Hunt) June 9, 2022
Hunt sent a letter to the department’s secretary of state, Michael Gove, who recused himself from the decision as his constituency is nearby, to remind him that drilling for fossil fuels in the area has been “decisively rejected by Surrey County Council and the entire local community”.
Given that he “cannot see how this site has any role to play in our future energy needs”, given the government's net zero commitments and continued moratorium on fracking, he urged Gove to reconsider.
In his own letter today, UKOG chief executive Stephen Sanderson countered that natural gas “plays a significant role in the energy transition as a feedstock for reforming into blue hydrogen” and has “a continued role in the energy transition to help meet peak energy demand, especially during periods when the wind doesn’t blow, the sun doesn’t shine or nuclear has outages, as seen in summer 2021”.
UKOG has, he said, “earmarked” the estimated 43-70bn cubic feet of gas at Loxley as “a predominantly blue hydrogen source” and noted that there are no plans for fracking, only conventional gas.
He said a drilling rig would be required on site for around 45 days for the first vertical pilot hole, a further 30 days for the sidetrack and a period of flow testing for up to six months.
LOXLEY LETTER: CEO Steve Sanderson's response to Jeremy Hunt MP on why Loxley makes perfect
strategic, economic and environmental sense. https://t.co/yJalw3e1ty
— UKOG (@UKOGlistedonAIM) June 13, 2022
Sanderson, stating himself to be a constituent of south-west Surrey, said Hunt’s assertion that the development would create environmental damage, “is wholly false”, based on the Environment Agency granting UKOG a full environmental permit in 2020.
He added that the project could be of significant material benefit to both the exchequer and the Surrey economy over its expected 20-year life, based on current gas prices.