U.K. Ready to Open Up Area Size of Wales for Shale Drilling

The U.K. government is ready to open an area the size of Wales for shale drilling next year, doubling the space available for exploration.

A licensing round for onshore oil and gas exploration will offer as many as 150 blocks covering about 20,000 square kilometers (7,700 square miles), Simon Toole, head of licensing at the Department of Energy and Climate Change, said today in London. There are about 170 onshore licenses currently.

The U.K. is offering lower taxes to boost drilling as North Sea reserves decline. An area stretching from England’s east to the northwest, known as the Bowland Basin, may hold as much as 1,300 trillion cubic feet of gas, according to the British Geological Survey. That’s enough to meet demand for almost 50 years at an extraction rate similar to fields in the U.S., where a shale-gas boom has propelled it to the world’s top producer.

Total SA’s Chief Executive Officer Christophe de Margerie told the British Broadcasting Corp. the company is interested in exploring for shale in Britain. Royal Dutch Shell Plc has also expressed interest. Centrica Plc, the largest energy supplier to U.K. households, and France’s GDF Suez bought stakes in acreages this year.

Energy Minister Michael Fallon said he expects “a degree of interest by the majors” in the 14th licensing round, to begin in early summer following a three-month public consultation. The government released a regulatory report today to clarify the permits developers need prior to drilling.

Boost Growth

The report, which was compiled by Amec Plc, showed that large-scale production in the country in the next decade will boost economic growth, create as many as 32,000 jobs and give almost 1 billion pounds ($1.6 billion) back to local communities.

Opponents of hydraulic fracturing, or fracking, for shale are concerned that the technique may pollute air and water and marr the English countryside. Protests this year halted drilling in the south of England.

“Michael Fallon is desperate to put a positive spin on this report, but what it actually shows is that the government wants to open two thirds of England up to fracking, with all the associated risks,” Greenpeace energy campaigner Anna Jones said in an e-mail. “Enough waste water to fill 40,000 Olympic sized swimming pools could be created, and tiny villages could experience up to 50 truck movements per day.”

The U.K. imports about half its gas, Fallon said. If shale gas isn’t developed, the country’s imports will rise to 70 percent by 2020, he said.

Before it's here, it's on the Bloomberg Terminal.