Exclusive: Industry body urges Tory leadership contenders to back fracking
The UK’s leading onshore energy body has urged the two Tory leadership contenders to lift the moratorium on fracking and greenlight future production.
UK Onshore Oil and Gas (UKOOG) has written to both Foreign Secretary Liz Truss and former Chancellor Rishi Sunak to make its case for fracking.
This follows both candidates in the leadership race revealing they were open to bringing back fracking to help secure the UK’s energy supplies.
In the letter, seen by City A.M, it defines the argument for fracking as both “logical” and a matter of “national urgency.”
The industry body believes that unleashing fracking will help drive down energy bills while also helping the UK meet its net zero goals with abundant supplies of shale gas.
UKOOG suggests one of its members could, through near term development of a small portion of their shale gas acreage, provide enough supplies to provide over three million homes with their gas needs – with initial production within 12-18 months.
The letter said: “It is worth noting that in Pennsylvania, shale gas production increased from near zero to an equivalent of UKCS natural gas production in less than 5 years. We will be able to deploy the best available extractive techniques pioneered in the USA.”
It also cited polling from YouGov which showed that a majority of residents in Northern England, including an overwhelming majority of Conservative voters, would back fracking if they got 25 per cent off their annual energy bills, the equivalent of up to an £811 deduction from a 2022 energy bill – which UKOOG believes fracking could deliver.
Alongside the possibility of a near-term ramp up to meet supply needs and help tame energy bills, UKOOG warned that without fracking – the UK will be highly dependent on overseas imports.
In 2021, the UK documented a 10-year high total imports, record net imports, record low exports and record high Russian LNG imports.
It warned that a failure to develop UK shale gas will see this trend continue.
Commenting on fracking’s viability, UKOOG said: “The potential natural gas reserve onshore is up to 17 times greater than it is offshore, and adequate to make the UK self-sufficient in natural gas for 50 years. UK shale gas offers the potential to drive billions of pounds into levelling up the North of England and the Midlands. 65,000 to 75,000 jobs could be created, up to £200bn in tax revenue, at least £1.2bn in business rates and a reduction in the UK’s energy supply emissions.”
Fracking revival awaits scientific approval
Fracking involves pumping water, chemicals and sand underground at high pressure to fracture shale rock and release trapped oil and gas.
Cuadrilla is the owner of the country’s two remaining horizontal shale wells in Lancashire.
Departing Prime Minister Boris Johnson first imposed a moratorium on fracking in 2019, following a devastating report from the Oil and Gas Authority (now the North Sea Transition Authority).
It concluded that it was not possible to accurately predict the probability or potency of earthquakes linked to fracking operations.
However, following the eruption of war in Europe, the Government greenlit a survey into whether there have been new developments in the science of hydraulic fracturing that make the process safer.
UKOOG has suggested if 37.6tn was recovered from shale sites, this could help meet the UK’s energy needs for the next 50 years.
This would approximately be 10 per cent of industry estimates for the overall level of reserves available under the ground.
Earlier this month, the British Geological Society (BGS) handed in its report to the Government, providing advice on the latest scientific evidence around shale gas extraction and potential tremors.
However, Downing Street is yet to publish the outcome, with a decision on the process delayed following the departure Johnson after a series of mass resignations.
If the report from the BGS suggests the process could be made safe, it could result in further production at the site.
By contrast, if the BGS’ findings concerning safety are negative, it will likely be the closing chapter for domestic fracking – with the NSTA previously ordering Cuadrilla to plug the facility.
Ramping up domestic energy generation has become increasingly vital to meeting domestic consumption needs, with wholesale gas prices driving energy bills to record highs.
The latest forecast from Cornwall Insight suggests bills could rise to £3,500 per year this October, deepening the cost-of-living crisis.