IGas Energy Plc has warned that the UK's latest government risks ‘driving investment away’ as a result of its u-turn to again ban fracking in the UK.
If its projects were allowed to proceed. the company said in a statement that it would have to potential to develop enough ‘cheaper’ gas to meet UK demand for up to nineteen years.
Instead, it said, the government the country will be tied into expensive imports of LNG for years to come, at a time when other European countries are looking at domestic shale as part of their answer to high gas prices and energy security.
This week, Britain’s new prime minister Rishi Sunak brought back the moratorium on fracking, which had been removed only weeks earlier by his predecessor Liz Truss – returning the government’s position back into alignment with its 2019 manifesto pledge to “not support fracking unless the science shows categorically that it can be done safely.”
Legal action may now be sought by IGas against the UK government, warned interim executive chair Chris Hopkinson.
“IGas, its partners, and investors have invested significant sums in the development of shale gas both before the 2019 moratorium and again during this political debacle,” Hopkinson said. “On both occasions, these investments were made in the belief that we were unlocking a strategically important resource and providing energy security for the UK.
“We continue to believe and assert that fracking for shale gas can and will be done safely and in an environmentally responsible manner.
“In light of the government's totally unwarranted U-turn and, in the interest of our shareholders, we reserve the right to pursue any legal process available to us to recover the losses that we have incurred."
He added: "One of the cross-industry benefits of lifting the moratorium on fracking is the potential to level the playing field across all sectors, particularly in the streamlining of regulatory processes.
“This could promote growth and help make post-Brexit Britain the place to do business. But now, another government U-turn risks driving investment away.
“Shale could quickly provide cheaper gas to the UK, supporting strategic industries such as the UK steel industry and the emerging blue hydrogen economy, selling gas at a guaranteed contracted price well below European prices.”