Reports today suggested that a North Sea storage facility at Rough which is owned by British Gas's parent company Centrica PLC (LSE:CNA) will be recommissioned next month after a sign-off from the Health & Safety Executive (read more).
It can hold enough gas to meet 10 days’ winter demand and underlines the need to find new gas sources with energy prices rising sharply on restricted supply from Russia following its invasion of Ukraine.
In light of that, another area that also might be due a reprieve is fracking.
A moratorium on fracking for shale gas has been in effect in the UK since 2019, but in April, the Department for Business, Energy and Industrial Strategy (BEIS) asked the British Geological Survey (BGS) to review the scientific basis for fracking to help with specific reference to the energy price crisis.
Fracking is used in places where oil and gas are trapped in rock formations, so, drilling a hole – as is done in conventional production– does not work.
Instead, they are artificially stimulated by pumping fluid into the rock at pressures high enough to break the earth and push the once-trapped gas and oil to the surface.
It is a controversial technique, and earth tremors when it was used near Blackpool led to its effective ban but might this be about to change.
When will the result be published by BEIS and what is the likely outcome?
BGS told Proactive: “Following peer review, a report has been submitted to BEIS for consideration."
Charles McAllister, director of policy, government and public affairs at UK Onshore Oil and Gas (UKOOG), told Proactive “No policy decisions will be made regarding fracking until there is a new Cabinet so the earliest we’re looking at is mid-late September.”
Both Prime Minister candidates, Rishi Sunak and Liz Truss, indicated they would lift the moratorium on fracking contained in the party’s last election manifesto, subject to local support.
The BEIS admitted the UK must keep its energy options open given Putin’s “barbaric acts,” so it confirmed “shale gas and new approaches could be part of the UK’s future energy mix,” but emphasised that science will lead any decision.
If fracking is given the go-ahead, which areas will be impacted?
If Sunak’s or Truss’ Cabinet were to give the green light it would “almost certainly” begin at one of the two existing sites in the UK, McAllister added.
One of those is Springs Road in the East Midlands, operated by IGas Energy PLC (AIM:IGAS, OTC:IGESF) as part of a joint venture with Jim Ratcliffe’s Ineos and Egdon Resources PLC (AIM:EDR).
“Option two is Preston New Road, in Lancashire,” McAllister commented, which is run by Cuadrilla.