U.K. Shale Exploration Should Resume, Environment Agency Says

Exploration of shale-gas resources by companies including Cuadrilla Resources Ltd. should resume after an investigation into hydraulic fracturing, the U.K.’s Environment Agency said.

“There are significant environmental risks associated with shale gas as there are with other industrial activities,” Tony Grayling, head of climate change and communities at the agency, told delegates at a conference in Durham, England, yesterday. “We think those risks can be managed.”

Grayling’s comments came before a report from the Department of Energy and Climate Change that will rule on whether a moratorium on hydraulic fracturing, or fracking, will be lifted after Cuadrilla said it caused two small earthquakes last year. It will be published and open for public consultation “soon,” he said in an interview, without elaborating.

Fracking, which involves injecting water, sand and chemicals into rock formations to free gas deposits, has boosted U.S. production of the fuel and pushed prices to a 10-year low. France has halted the practice amid fears it may pollute drinking water. Cuadrilla, which wants to exploit shale resources near Blackpool in northwest England, says contamination of aquifers is almost impossible.

“The idea that our activities would grow a fracture from the well to an aquifer is completely insane,” Huw Clarke, an exploration geologist at Cuadrilla, said at the conference, organized by the Institution of Gas Engineers and Managers. The shale resources near Blackpool are 7,000 to 10,000 feet deep, compared with a saline aquifer no deeper than 1,000 feet and fracturing’s maximum reach of 1,000 feet, he said.

No Groundwater Risk

There is no significant risk to groundwater at Cuadrilla’s sites in Lancashire, so no permit is required to operate there, according to Grayling. The chemicals used by Cuadrilla are not considered hazardous under the groundwater directive, he said.

“We have a difficult balance to strike between being and being seen to be precautionary, versus being and being seen to be light touch,” he said.

Shale deposits are becoming more important for the U.K. as the offshore reserves discovered in the 1970s that made Britain self-sufficient are running dry and the country will import more than half its gas supplies this year.

Cuadrilla is “very confident” that there is 200 trillion cubic feet of gas in its license area, yet does not yet know the recovery factor, Clarke said.

Companies with licenses in areas possibly holding shale-gas resources in the U.K. include IGas Energy Plc (IGAS), Dart Energy Ltd. (DTE), BG Group Plc (BG/), Celtique Energie Ltd. and Reach Coal Seam Gas Ltd., according to a presentation by the Department for Energy and Climate Change yesterday.

To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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