Politics

Estimates of UK shale gas wells “out of date”, says minister

Fracking Week in Parliament

pnr 171226 Ros Wills 5

Cuadrilla’s shale gas well at Preston New Road, near Blackpool, 26 December 2017. Photo: Ros Wills

The Government has disclosed that an estimate of 155 UK shale gas wells by 2025 is now considered to be out of date and there are no new figures.

The estimate was revealed last month by Greenpeace UK’s investigative journalism unit, Unearthed, following a Freedom of Information request (DrillOrDrop report).

Based on a 2016 Cabinet Office report, the estimate was far less ambitious than that developed by the Institute of Directors of 4,000 wells by 2032.

carolinelucas

The latest information from the Government came in an answer to the Green Party MP, Caroline Lucas (right), this week.

Ms Lucas asked about estimates of the number of shale gas wells in 2025 and 2030. She also asked whether those estimates had changed since 2012 and 2015.

The Energy Minister, Claire Perry, replied:

“Based on information provided by industry dating from 2016, BEIS [the Department for Business, Energy and Industrial Strategy] previously estimated in 2017 that there could be around 155 wells by around 2025.

“This figure is now considered to be out of date.

“The Secretary of State has not made any new estimates for the period to 2025 and has not made any estimates for the period to 2030.

“The Secretary of State did not make estimates in 2012 or 2015.”

Update

On 8 March, Caroline Lucas asked a follow up question:

“To ask the Secretary of State for Business, Energy and Industrial Strategy, pursuant to the Answer of 27 February 2018 to Question 128441, Fracking Wells, what the evidential basis is for the statement that the estimate that there could be 155 fracking wells by around 2025 is considered out of date.”

Claire Perry replied for the Business Secretary:

“We consider the estimate to be out-of-date based on progress of the industry to date and the number of sites currently going through planning”

In response to a related question, Claire Perry added:

“The Department of Business, Energy and Industrial Strategy has not made any estimates of the potential effect on employment from the future development of the shale gas industry.”

What will shale gas be worth to the UK?

The Government was also asked about the value of UK shale gas reserves, the technical terms for recoverable hydrocarbons.

Jim CunninghamLabour’s Jim Cunningham (left) asked the Treasury what estimates had been made.

Robert Jenrick MPThe Exchequer Secretary, Robert Jenrick (right), pointed to the most recent Economic and Fiscal Outlook from the Office of Budget Responsibility, which has forecasts of UK oil and gas tax receipts.

This 264-page document has no reference to shale gas, hydraulic fracturing or fracking.

It said it had revised down the forecast for UK oil and gas revenues (not separated between onshore and offshore) by £0.4bn a year, reflecting new methods of calculation, a lower outlook for sterling oil prices and weaker gas prices.

Figures on receipts from UK oil and gas, comprising offshore corporation tax and petroleum revenue tax, ranged from close to zero in 2016-17 and were expected to reach just £0.7bn in 2017-2018.

The report said oil and gas company revenues had risen because of an increase in the oil price and falling capital expenditure. But it added:

“The high level of trading losses accumulated within the industry in recent years means that these can be used to offset future profits. This will be a drag on receipts throughout the forecast period.”

No news on Third Energy’s fracking consent

Ms Lucas also asked about the assessment of financial resilience being carried out on Third Energy before a decision could be made on consent for fracking at its Kirby Misperton site in North Yorkshire.

She asked the Business Secretary:

“What financial benchmarks his Department plans to use to inform its consideration, based on an assessment by the Infrastructure and Projects Authority, of the financial resilience of (a) Third Energy UK Gas Limited and (b) other companies proposing to carry out hydraulic fracturing operations.”

Claire PerryReplying for Greg Clark, Claire Perry said:

“As set out in the Written Ministerial Statement of 25 January 2018, my rt. hon. Friend the Secretary of State has asked the Infrastructure and Projects Authority to assess the financial resilience of Third Energy UK Gas Ltd, including its ability to fund decommissioning costs.

“That process is still ongoing.

“The Department will respond further, as appropriate, in due course.”

Water contamination

Alex SobelLabour’s Alex Sobel asked whether there had been any water contamination as a result of fracking in the Yorkshire and Humber region.

Therese CoffeyThe Environment Minister, Therese Coffey, replied that there had been no high volume hydraulic fracturing in Yorkshire and said none was permitted to take place in the Humber.

Referring to Third Energy’s site at Kirby Misperton, she added:

“The water environment around the Yorkshire site is being monitored which is required to be assessed in accordance with the environmental permit, before, during and after fracking.”

PM quizzed on INEOS land access techniques

May and Amesbury 180228

Also this week, the Prime Minister was asked about attempts by INEOS’s land agent to secure access to land for seismic testing. The Weaver Vale MP, Labour’s Mike Amesbury, said a constituent had been door-stepped by the agent and, despite refusing permission, then received a pre-named contract in the post. DrillOrDrop report


Transcripts

(In date order. Thanks to TheyWorkForYou.com)

Question by Jim Cunningham, Labour, Coventry South

To ask Mr Chancellor of the Exchequer, what estimate his Department has made of the potential future value of shale gas reserves to the public purse; and if he will make a statement.

Reply by Robert Jenrick, The Exchequer Secretary, Conservative, Newark

The independent Office for Budget Responsibility (OBR) produces forecasts for UK oil & gas tax receipts. Its latest Economic and Fiscal Outlook was published on 22 November 2017:

http://obr.uk/efo/economic-fiscal-outlook-november-2017/

The OBR also produces regular reports on wider trends in the economy that may affect tax revenues in the longer term.

Written question, 20 February 2018. Link to transcript

Question by Caroline Lucas Green, Brighton, Pavilion

To ask the Secretary of State for Business, Energy and Industrial Strategy, what financial benchmarks his Department plans to use to inform its consideration, based on an assessment by the Infrastructure and Projects Authority, of the financial resilience of (a) Third Energy UK Gas Limited and (b) other companies proposing to carry out hydraulic fracturing operations.

Reply by Claire Perry, Business Minister, Conservative, Devizes

As set out in the Written Ministerial Statement of 25 January 2018, my rt. hon. Friend the Secretary of State has asked the Infrastructure and Projects Authority to assess the financial resilience of Third Energy UK Gas Ltd, including its ability to fund decommissioning costs. That process is still ongoing. The Department will respond further, as appropriate, in due course.

Written question, 22 February 2018. Link to transcript

Question by Alex Sobel, Labour/Co-operative, Leeds North West

To ask the Secretary of State for Environment, Food and Rural Affairs, what recent assessment has been made of whether there has been any water contamination as a result of fracking in Yorkshire and the Humber.

Reply by Therese Coffey, Environment Minister, Conservative, Suffolk Coastal

There has not yet been any high volume hydraulic fracturing, or ‘fracking’, at the site in Yorkshire, and none is permitted to take place in the Humber. The water environment around the Yorkshire site is being monitored which is required to be assessed in accordance with the environmental permit, before, during and after fracking.

The Secretary of State for Business, Energy and Industrial Strategy made a written statement on 25 January regarding progress on the consent for fracking in Yorkshire.

Written question, 22 February 2018. Link to transcript

Question by Caroline Lucas

To ask the Secretary of State for Business, Energy and Industrial Strategy, what estimate he has made of the number of wells projected to be drilled by the shale gas industry in (a)2025 and (b) 2030; whether those estimates have changed since (i) 2012 and (ii) 2015; and if he will make a statement.

Reply by Claire Perry

Based on information provided by industry dating from 2016, BEIS previously estimated in 2017 that there could be around 155 wells by around 2025. This figure is now considered to be out of date. The Secretary of State has not made any new estimates for the period to 2025 and has not made any estimates for the period to 2030. The Secretary of State did not make estimates in 2012 or 2015.

Written question and answer, 27 February 2018. Link to transcript

Question by Mike Amesbury, Labour, Weaver Vale

Agents from the shale gas company INEOS recently posted a pre-named contract to my constituent Alison Davies, asking her to agree to a geological survey on her farm. Alison had already rejected this request when she was door-stepped a few days earlier. Does the Prime Minister know what it feels like to get an unsolicited letter from a group who will not take no for an answer, and will she join the Welsh and Scottish Governments by saying no to fracking in England?

Reply by Theresa May, Prime Minister, Conservative, Maidenhead

Shale gas extraction could be a very important part of ensuring energy security in this country, and I am sure all the hon. Gentleman’s constituents and the constituents of others represented in this House will want to ensure the Government are doing everything they can to make sure we maintain our energy security and we do not see the lights being turned off.

Prime Minister’s Questions, 28 February 2018. Link to transcript


Updated 11/3/2018 to include related question asked by Caroline Lucas on 8 March 2018

37 replies »

  1. In the recent Economic and Fiscal outlook it shows oil price forecasts to 2023.

    The price predictions in March 2017 were 41% lower than the March 2014 predictions.

    The UK shale gas industry set off in 2009 with prices trending up towards $120 a barrel which gave it a glimmer of hope of being viable.

    The forecast now to 2023 is just over $60 a barrel

    The fluctuation of oil prices is reflected in gas prices

    $60 is enough for our North sea to make profit but nowhere near enough for an onshore shale industry according to figures published by EY, OIES, Bloomberg and Centrica.

    No wonder there is no mention in the report of the value of shale oil and gas.

  2. I think she’s lost it , let me know if you ever come across it. Her sanity went for a long, long, walk one day. May must know that we know she’s lost it. If you should find it, send it to Liz Truss just for a laugh.

    • After nearly eight years, fracking activity has produced no gas for heating, and by recent accounts will be primarily used to produce plastics that are poisoning our oceans and water supply and choking birds and ocean wildlife.

      What it has done however is to invade this country without one iota of truth about the highly dangerous polluting process that has caused ecological disaster across the planet and has accelerated climate change to boot.
      Fracking and it’s associated processes are nothing more than profiteering, it has nothing to do with providing heat for homes, the gas will be sold on the international market and the homeowner will be no better off, it’s a scam pure and simple.

      What It has done however is that it has divided up and carved up communities, bullied and intimidated and criminalised legal democratic rights and allow an exploiting aggressor to carve up our country into blight sized chunks and set up shop in our most precious beauty spots.
      And then misused the secret court system to crush democratic rights of protest and objection to being invaded and exploited with a well known polluting process.

      And then we get this triumphant crowing that the industry is needed because that same climate change fluctuation that has been caused by such processes in the first place as some sort of twisted justification for more insanity.

      That is just crass exploitation and provides no answers to true long term “energy security” because that solution dwells elsewhere in renewable sane energy processes provided practically freely by the sun and our own natural energy systems.

      So no, still no go on justifying fracking, if indeed that was the implication?

      [Typo corrected at poster’s request]

      • A little Gascentric of you Kisheny,

        BTW, In fact Wind Turbines do produce electricity which powers the pumps for gas systems and combi boiler radiator systems and also powers the compressors that pump the gas through the distribution pipes, and so do indeed heat homes, or have you never heard of electricity?

        Such narrow maladministration of the word “heating” is therefore a typical oversimplification of any reason or sense?

        So people do heat their homes by electricity produced by wind turbines don’t they?

        Ohhh well, back to the drawing board Kisheny.

  3. John still concerned about his N.Sea investments.

    Wholesale gas prices now spiking at THREE TIMES recent levels. Shame today’s reality is with us, but yesterday’s speculation has been, gone and forgotten about. There has not been a medium to long term forecast for gas and oil prices that has been correct in recent history. Hardly surprising as, apart from the good work done in USA, the rest of the market is a CARTEL. Those of us who remember the good old ’70s, know that means if the cartel want to move the price by 400% they can do so. Obviously, less so due to the BENEFITS of US fracking but the means are still there, and they do not inform the markets of their intentions far ahead of the move. Neither do conflicts within key production areas get notified years in advance. Global demand depends upon global growth which has a nasty habit of being at variance with many “experts”.

    No wonder there is no value for shale. Hmm. Based upon what John? It would either be speculation or fabrication as nothing has been produced. But, that would seem to be the premise behind most of your comments.

    Building on sand, John.

    • Have you noticed a lot of posters “SHOUT” now?

      We are not “DEAF!” We are not “STUPID!” We also have a vocabulary that precludes the need for such amplified emphasis.

      So i think in future i will grade such posts accordingly, this one is a -3, because of the “SHOUTS!”…….ooops!…..-4!

      • Phil C; am afraid the script writer has left the building. The repeats are worse than the TV. It’s like the Englishman who SHOUTS at a non English speaker thinking they will understand volume not words. It is clear those who do not support fracking (84%) are much more articulate and have amazing command of the written language as each pro fracking post is decimated into a thousand pieces to be blown away by the winds of time…….
        Sorry, is that a 1?

        • Yep, That’s +83 and -1 and change, but i forgive you! This is a +17 and change.

          Is that OCD? Ooops, sorry, +22, -2!

  4. Your shock doctrine tactics are misguided Martin. There was a good summary on Newsnight (last night) of how the short-lived price spikes work to activate a market mechanisms and how things normalised pretty quickly afterwards. There was also a discussion of the case for more storage – a good idea but not urgent it seemed.

  5. Yes, PhilipP. There was also a good review from an analyst on Sky last night. She suggested there would probably be a benefit for a review regarding the importance of on shore gas in the UK. If you followed her analyses of the market as a whole that made a lot of sense. I will not burden you with the facts as they could just be too shocking. Elephants in the room are shocking.
    Probably a shock to some, PhilipP, but pretty darned logical to two thirds of those recently surveyed. (And, didn’t the “against” drop by around 10% before this awakening call?)
    Not sure the term misguided is apt. The tactic of using facts to counter speculation and fabrication seems to cause a disproportionate level of discomfort, which is a bit of a give away.

  6. Anyone see QT last night? Interesting that two Scots did the talking on anti fracking, locals aye! Blackpool is one of the poorest educated regions in England! Makes sense why the anti stance is prevalent within part of the poorer side of the local community.
    The guy that spoke in favour was articulate and smartly dressed in comparison. I bets in a line up of 9 antis and 1 pro I could identify them just by appearance.
    This cold spell has done wonders for our cause!

    • Keep it up GBK. Your comments have probably done more to stimulate the anti cause than most. We are grateful.

      An observed pattern in the States was that big O&G would move in on poorer areas first as their populations were less likely to try taking them to court, to be less aware of their rights, and to be more easily intimidated or bribed (hush money etc). That said, the resistance here has been impressive.

      • Lol good PP. I have absolutely no sleepless nights worrying about your barmy brigade. They will achieve nothing at the end of the day. We hold the power and the wealth and you’ll just have to suck it up.

    • Good Heavens! Well that was an embarrassing display of the lessons not learned from the dangers of revealing self exposure GottaBExtremist?

      Have you not noticed that there are life threatening issues at stake here? Its not a fashion show, though apparently some think so?

      Save us from over simplification of important issues into petty personal perceived potty hang ups?

      Its not about how we appear, that is irrelevant in any true situation, its just illusion and self delusion, its what and who we are inside and how heartfelt and honest we are in our regard and protection for each other and this poor benighted polluted under attack planet we all live on and cannot do without.

      its like talking to children sometimes on this site.

      The most humane people are beautiful on the inside, beauty on the outside is is a gift, but that is so often squandered on self regard and illusions of elite privilege?

      I have known and still know some truly beautiful looking people, some are shallow and self serving and some are just as beautiful on the inside, if not more so.

      Beauty inside and out is rare, because beauty on the outside only and an emptiness on the inside can lead to self regard and can twist a person into thinking that they have some sort of god given right to rule it over others and make shallow preconceptions about other people, just because they look good on a camera. but the simple truth is that we all have that “morning after look”, so called pretty people are no different in that regard, no makeup, a hangover and hair a mess.

      I have known some who shine like the sun, inside and out, but they would never make such crass remarks to either praise or denigrate another just for how they look.

      They are too intelligent for that mind trap.

    • Don’t be so quick to judge people, GBK. I know the Scottish lady who spoke so well on QT. She is in fact a local Doctor’s wife who lives in the Fylde. So, neither poor, uneducated or inarticulate.

  7. Interesting poor attempt to deflect there PhilipP. More re-education needed. The Sky interview was with an independent energy analyst.

    It works like this. Sky ask the questions and she gives the answers, not the other way round. You must have been watching too much RT.

    Keep on ignoring those elephants.

    I’ve given up on QT GBK. When they get the Momentum plants out of the audience so the rest are allowed a balanced debate, I may re-engage. My system can only digest so much propaganda.

    • No Martin. I’ve too much experience of working in the media to know that any interview can be curated (set up, and afterwars edited) to suit almost any outcome or view that you like.

      • i wonder if the anti antis will ever realise, that they are the elephants in the room? God those jumbo blinkers must weigh a tonne?

        • Well well, what a display from the anti anti’s?

          Here is Ian R Cranes video tribute for today out in the cold and snow, thanks Ian for braving the weather for this video.

          Ian speaks more sense about the truth of the shortage of gas myth, watch and see the truth.

          ( https://www.youtube.com/watch?v=nv2r8t05Rno&feature=em-lbcastemail )

          As always, no matter where you are, inside or out, fashion victims or not, normal, just keep warm and safe, and, Enjoy! Enjoy!

  8. Yes, too much RT. Not that sort of interview (certainly not a war) but widespread, looking at the overall market situation with the subject of security of supply being an obvious, and unedited category. But, then if you are wanting to avoid the elephant calf, then the bull elephant has to be avoided as well.

    Please try harder GBK. If posting on DOD since the start of this year has been a “stimulated” version of the antis, more effort is required! I’ve done my best to cheer them up but there seems to be a deep depression.

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