Brexit and the ensuing instability of the British pound immediately raised concerns about the UK´s dependency on energy imports.
With the European Union´s restrictive regulations on fracking out of the picture in the post-Brexit era, the door was left open for energy companies to tap into England´s massive shale gas reserves.
As environmentalists pushed for renewable energy developments and “No fracking,” economic uncertainty made the shift to green energy sources frankly unviable, and access to Northern England´s 1300 trillion cubic feet of shale gas became the only feasible solution for the UK´s impending energy deficit.
When new Prime Minister Theresa May announced that families living in fracking areas would be generously compensated, it became clear that things were about to change, and that green lobbyists might no longer be able to shun hydraulic fracturing without the backing of the EU´s anti-fracking legislation.
As I mentioned in my previous article, mineral rights across British soil are the property of the Crown. Thus, before May´s resolution, landowners had little incentive to consent to fracking operations in their communities.
Barely a month and a half after the new regulation took effect, the government has overruled a local authority decision in Lancashire, granting its second shale gas fracking permit to Cuadrilla Plc.
As North Sea oil and gas outputs decline, the UK might be looking at importing 93% of its gas by 2040. Shale gas is a godsend in this scenario, with the added advantage that it will likely create over 60,000 new energy sector jobs across impoverished and deindustrialized areas of England.
Cuadrilla Resources has been granted permission to drill four horizontal wells in the vicinity of Blackpool. There was another request to drill a second set of four wells, which is pending approval due to concerns that it might disrupt road traffic.
The company expects to be extracting gas from the site by early 2018. The approval of Cuadrilla´s plans has also sent a direct message to the stock market, where shares for other companies awaiting UK fracking permits have experienced a significant boost.
Cuadrilla´s fracking initiative had initially been rejected by Lancashire County Council. The government´s readiness to overthrow the local ruling is a testimony to the UK´s stance in favor of future fracking operations.
Energy sector players expect that the cost of UK shale gas will be competitive with the prices of the liquified natural gas that is currently being imported, notably from Qatar, to satisfy local demand.