UK shale oil and gas renaissance at risk from new ‘eco-warriors’

The Cuadrilla drilling site in Balcombe. Gareth Fuller / Reuters

A few months ago, British politicians were rubbing their hands with glee at the thought of another energy boom, this one based on drilling shale gas.
Now, the country's leaders need to start worrying about the return of Swampy - an environmental hero of yesteryear - as the controversy surrounding shale gas deepens in the United Kingdom.
Swampy shot to prominence in 1996 when he was the last man to be removed from a series of tunnels built in the path of construction vehicles trying to build a road extension in Devon.
Now, such so-called eco warriors are back and disrupting the governments hopes of uncovering huge domestic resources of natural gas onshore, in the heart of its rural communities.
And the environmentalists and activists could soon have a raft of sites to target, as the UK is set to embark on its 14th round of licence applications for onshore oil and gas exploration.
The licensing round will be the first to take place since the US shale gas revolution of the past two or three years, which has triggered the global interest in extracting gas trapped in layers of shale rock.
The UK process will see companies apply for plots of land for oil or gas extraction, although a spokesman from the British department of energy and climate change (Decc) says acquiring a licence will not give a company a right to begin fracking - further permissions are needed to carry out that work.
Michael Fallon, the minister for energy, confirmed last month the latest licensing round will go ahead early next year.
Energy experts believe there will be unprecedented interest in bidding for the licences, despite the increasingly heated anti-fracking protests that have hit the few sites in the UK where testing for shale gas in underway.
Mr Fallon told Bloomberg News the UK would drill as many as 40 shale exploration wells over the next two years.
"We've had more and more interest in shale," he said.
"We've seen enormous benefits of shale to households and businesses in the US."However, Mr Fallon insists no fracking will be allowed in the southern English county of Sussex, the site of recent protests, unless it is absolutely safe and the environment is protected.
Residents of Balcombe, a relatively affluent village in Sussex where one firm, Cuadrilla Resources, wants to test drill, have been joined in their protests by a large camp of eco-warriors who object to shale gas in general and fracking in particular. Last month, a parliamentarian from the British Green Party was arrested at demonstrations in Sussex.
However, it has emerged some residents of the village, about 80km south of London, are unhappy their cause has been taken over by outsiders.
The protests in Sussex may have caught the headlines but in truth they did not hold up the exploratory drilling for long - just under a week.
Cuadrilla, which is chaired by Lord Browne, the former chief executive of BP, hopes to finish its work by the end of this month, although it will not say when it will be able to assess whether there is sufficient oil in the area to extract.
Ironically, Balcombe - the focus of the protests - is very unlikely to become a production site, according to a company spokesman. And the firm is targeting oil, not gas, in a layer of rock called micrite, rather than shale.
"Our licence area is very big - 772km squared - and there are places in that licence area that are much better suited for production of oil," the spokesman said.
He would not say whether the company would be participating in the 14th round of licence applications, for commercial reasons and for fear of antagonising the environmental lobby.
But Tim Pugh, a partner at law firm Berwin Leighton Paisner, says it is unlikely Westminister will budge.
"I would expect the government to stick to its guns. The market needs to be confident the government is behind this before the next licensing round," he says.
"I expect real interest from some of the bigger multinational players."
Companies applying for licences under this round will be considered for their suitability to carry out onshore exploration - their expertise, track record, financial record and ability to return the land to its original state - for a 25-year period.
According to Decc, licensing rounds yield better quality bids than other methods.
"Unlike auctions, for instance, licensing rounds do not divert significant sums of money away from exploration work and they give a much better expectation that a licence will be awarded to the bid that promises to optimise exploitation of the UK's petroleum resources," it says on oys website.
Work started on the 14th round of onshore licensing in 2010 but it was halted when seismic tremors were encountered during fracking operations in Lancasire.
In December the government gave the green light for fracking once again, after it had announced new controls. At the same time it said the licensing round would be restarted.
The hopes for shale gas in Britain have increased dramatically since the publication in June of a report by the British Geological Society, which said there was evidence Britain had perhaps double the reserves of shale gas it had estimated. The survey said the rocks of the Bowland shale area, which stretches from the Lancashire coast in the north-west of England to Scarborough on the east coast, holds 1,300 trillion cubic feet of gas.
According to Peter Styles,a professor of applied and environmental geophysics at Keele University, extracting just 10 per cent of the gas could supply the UK with gas for 25 years. Furthermore, the study only applies to one region of the UK. With further shale deposits to investigate in other regions, the full scale of the UK's resources could be even more substantial.
The British prime minister David Cameron is pushing the case for shale because he believes it will boost the moribund economy by creating a whole new industry, as well as help to keep a lid on energy bills for consumers.
The UK has been a net importer of gas since 2004 and the predictions are that Britain will be importing 80 per cent of its gas by 2030, so a new domestic source would clearly be of great value in a world where demand for energy is increasing rapidly.
Yet the environmental lobby - which resembles a close relation of the anti-capitalism protest movement that targeted St Paul's Cathedral two years ago - will continue to protest against shale gas, which they consider to be as damaging as any other fossil fuel.
The original Swampy - real name Daniel Hooper - has retired from activism now, according to The Sun newspaper, and is happy living in a yurt with his kids.
But the British government and the energy industry should not underestimate the determination of his successors to deflate the great shale gas gambit.
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