U.K. Curbs on Shale Exploration Aren’t Necessary, Lawmakers Say

U.K. lawmakers said there’s no need to impose curbs on shale gas exploration, though the development of unconventional resources in Britain is unlikely to prove a “game changer” as in the U.S.

There’s no evidence that the process of hydraulic fracturing, known as fracking, poses a direct risk to underground water supplies provided that the well-casing is intact, Parliament’s Energy and Climate Change Committee said in a report today.

“There has been a lot of hot air recently about the dangers of shale gas drilling, but our inquiry found no evidence to support the main concern -- that U.K. water supplies would be put at risk,” committee chairman Tim Yeo said in a statement.

Environmental concerns linked to the risk of water contamination from shale gas exploration has led to lawsuits and a temporary moratorium on new permits for fracking in the state of New York. The lower house of the French parliament has voted in favor of a permanent ban on shale exploration.

The U.K.’s onshore shale gas resources could be as much as 150 billion cubic meters, equivalent to 1.5 years of total U.K. gas consumption, based on British Geological Survey estimates. In contrast, the development of shale fields made the U.S. the world’s largest gas producer in 2009 and caused prices to slump.

While the U.K. report found that shale gas could help reduce the the country’s dependence on imported gas, it’s unlikely to have a significant effect on domestic gas prices.

Offshore Shale

The committee called on the government to encourage the development of the offshore shale gas industry, which could dwarf onshore supplies.

“Offshore reserves may be much higher and, while more costly to recover, could potentially deliver self-sufficiency in gas for the U.K.,” Yeo said.

Shale gas could reduce carbon dioxide emissions globally, the report said, by encouraging a switch from coal to gas for electricity generation. “But if it has a downward effect on gas prices it could divert much needed investment away from lower carbon technologies like solar, wind, wave or tidal power,” Yeo said.

Shale formations consist of dense rock that can be broken apart to release trapped oil and gas. Advances in directional drilling and fracking techniques have increased production from shale fields. Fracking is a process in which millions of gallons of water, sand and chemicals are pumped underground to break apart a rock formation and release natural gas.

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To contact the reporter on this story: Stephen Cunningham in London at scunningha10@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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