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Baseefa Ltd

Unpublished UK government report lowers fracking expectations

13 February 2018

The UK government does not expect a fracking boom on the scale originally predicted, according to confidential Cabinet Office projections seen by Unearthed, the Greenpeace UK website. The government’s unreleased Implementation Unit Report on Shale Gas foresees only 155 wells drilled by 2025, against projections of thousands of wells from the shale gas industry as recently as 2012.

A shale test drilling site in the UK - Image: Cuadrilla
A shale test drilling site in the UK - Image: Cuadrilla

The document reportedly concludes that 'approximately' just 17 unconventional oil and gas sites across England and Wales could be operational by the end of this decade, with the number rising to between 30 and 35 by 2022.

It adds that there "could be around 155 wells by around 2025", but makes no distinction between exploration and production sites and provides no predictions between 2025.
The official outlook is in stark contrast to the projections put forward by the industry and ministers during the Cameron government, when UK shale gas was hailed as a means of bringing down gas prices and creating thousands of new jobs.

One industry-backed study estimated 4,000 horizontal wells could be drilled by 2032, with 400 wells a year coming online. An EY report that was widely quoted by ministers predicted fracking could create over 64,000 jobs and attract £33bn of investment.

Industry sources told Unearthed that changes to planning rules and relatively low gas prices had undermined the more bullish predictions made by the sector.

But critics of shale gas noted that the industry had also been hit by opposition from local communities, declining public support, and planning violations by some operators.

The sector has also faced further challenges in recent weeks. Business Secretary Greg Clark has stressed that he would require fracking companies to meet stringent standards relating to their financial stability. Specifically, he ordered plans to start of drilling at Kirkby Misperton in Yorkshire be put on hold pending an investigation into the "financial resilience" of operator Third Energy.

Cuadrilla, the UK’s largest fracking firm, which produced its own modelling in 2012 that showed many more wells than the government now expects, said the discrepancy could be down to “technical drilling advancements” that “allow operators to access rich gas zones from just one well without the need for multiple vertical wells.”

The spokesperson said: “Over the last six years there have been significant changes in regulation, local planning timescales and permitting which would, amongst other factors, outdate the timeframe of the 2012 predictions.”

A government spokesperson insisted the government remained committed to developing shale gas in the UK as part of a low carbon energy mix. "The UK government is committed to ensuring we have secure energy supplies that are reliable, affordable and clean," he said. "As part of this, shale gas has the potential to be a home-grown energy source which can lead to jobs and economic growth, contribute to our diverse energy mix to further enhance our security of supply, and help us achieve our climate change objectives."

Meanwhile, Ken Cronin, chief executive of trade body UK Onshore Oil and Gas, (UKOOG), stressed that the industry remains confident of a strong future for the UK fracking sector.

"We have now started the exploration phase which has included significant 3D seismic surveying across Lancashire, the East Midlands, Yorkshire and the North West and five wells across four sites have been drilled or are under construction," he said in a statement. "There are a further two wells with planning permission and planning applications are in for a further 10 wells across six sites. This exploration and appraisal phase will determine where the gas is, the qualities of the shale, and what a production pad scenario will look like."

"We are confident that if the forthcoming flow testing is positive, our scenarios for pad development are achievable," he added.


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