Politics

Has government gone cold on onshore oil and gas? What ministers and industry said last week

palace of westminster

Palace of Westminster Source:  By Superikonoskop [CC BY-SA 3.0], from Wikimedia Commons

Ministers said last week they were doing everything they could to promote UK onshore oil and gas production. But that’s not how it looked to the industry speaking to investors at the weekend. 

In this post, Paul Seaman reports on the contrasting views at key events in Westminster:  a parliamentary debate and question time on onshore oil and gas production;  and the UK Investor Show at the Queen Elizabeth Conference Centre.

Peers question ministers on gas production

Baroness FeatherstoneThe Lib Dem’s Energy Spokesperson, Baroness Featherstone, (left) asked the government:

“What is their assessment of the extent to which indigenous gas production is needed for energy security.”

Lord HenleyLord Henley (right),  an Energy Minister, said indigenous gas production met 46% of the country’s gas demands in 2016.  Other gas came from a “diverse and flexible” system of gas sources, including Norway, Europe and via LNG gas terminals, he said.

Baroness Featherstone asked:

“Does he agree that it would be good to end the ugly and unnecessary distraction of fracking?”

Lord Henley replied:

“As regards production of domestic shale gas, I think we should do everything we can to tap into this potential resource.”

Lord PolakThe Conservative, Lord Polak (left) asked what the government were doing to help the shale gas industry.

Lord Henley replied:

“I hope that we are giving every possible encouragement to the shale gas industry. We think that the economic impact of shale, both locally and nationally, could be very large indeed. There will be opportunities for jobs and energy security, and in a great many other areas, through supporting that industry.

baroness-mcintoshLord Henley failed to confirm there would no fracking in national parks or areas of outstanding natural beauty. He was replying to a question by Baroness McIntosh (right), the former Conservative MP for Thirsk and Malton, where companies have licences in the North York Moors National Park. Lord Henley would not comment on individual applications for the exploration of domestic gas.

The former Conservative Chancellor, Lord Lawson, suggested the strongest opponents of fracking, both in the UK and Europe, were the Russians, who relied on exporting their gas.

Claire PerryMPs debate UK oil and gas industry

In a Westminster House debate, the Energy Minister, Claire Perry, told MPs:

“I, the Government and many industry commentators absolutely see a role for oil and gas in the mix going forward, with a shift towards gas.

“The Government are committed to gas—it is not just me; it is other international parties as well—but finding ways that can help us take carbon out to keep the energy supply flowing is also part of that mix.”

She also added:

“Could I put on record that I am a little mystified about the Scottish Government’s decision to refuse to allow exploration for gas onshore when we know it is there because it is a geologically identical strata?”

colin clarkOpening the debate, Colin Clark, Conservative MP for Gordon, quoted Lord Turner, a former chairman of the Committee on Climate Change, who said oil and gas would be a major source of energy at least into the next century.

Mr Clark said hydraulic fracturing of rock formations has been carried out safely under the North Sea for 30 years.  He said he respected communities that did not want fracking but he said:

“Let us be frank: it is about nimbyism. They do not want it in their backyards. That is what it is about, rather than a denigration of the science and technology of those sectors.”

kirsty blackmanKirsty Blackman, SNP deputy leader at Westminster, said the benefits of fracking were not as big as they had been made out to be.

There would be little in the way of jobs or tax take, she said. It would not compensate for the upheaval caused to alan brownlocal communities.

Alan Brown, the SNP’s energy spokesman, defended the Scottish government’s decision  not to support applications for fracking. He said Texas, had now banned the process, despite developing modern fracking techniques.

Onshore industry is “not a priority” for ministers, says oil boss

QEIINew

Last week’s warm words from ministers failed to convince one industry executive speaking at the 2018 UK Investor Show.

Jonathan Tidswell-Pretorius

Photo: Angus Energy

Asked whether the government was encouraging onshore development, Jonathan Tidswell, of Angus Energy , the operator of sites at Lidsey in West Sussex and Brockham in Surrey, said:

“I don’t think it’s a priority at the moment for the UK Government, whatsoever.  It certainly doesn’t come across that way if you’re on the ground.”

Speaking during a panel event on exploration in southern England, Mr Tidwell said:

“We’re not exactly re-inventing the wheel.  It’s all been done in the last ten or fifteen years to be sure, but the issue is being allowed to implement it correctly and safely in the UK.

“At this point that’s not happening, certainly not very quickly.”

He said most of the time it took to drill a well was spent on the planning process:

“At the moment I’d say we take eighteen months from identifying the target to drilling.  The engineering part of that is a month – it’s the council and planning which takes the other 17 months.

“With the team I’ve got, I can drill probably about five wells a year without having to hire anybody else.  Whether I drill one well in two years, or five wells in a year, I still have the same team, so if I can upscale that, I’m a very happy customer.”

He added that different planning authorities took very  different approaches:

“The problem is not the planning itself, it’s that local authorities have different views.

“So in West Sussex, they have a very pragmatic approach.  In Surrey, they take a lot of convincing.

“Literally, you drill a well one mile either way and you have a completely different set of guidelines.”

Flow testing at Balcombe

Balcombe,West Sussex, UK Anti Fracking protests..16th September

Cuadrilla tanker leaves the Balcombe site  August, 2013

Angus Energy is waiting for approval to take over from Cuadrilla as operator of the Balcombe licence in West Sussex.

DrillOrDrop asked Jonathan Tidswell at the UK Investor’s Show how he planned to get acceptance from the local community for flow testing at Balcombe, due to take place this year.

He told us:

“My understanding is that the main objection is not coming from the town itself, but from a small minority of the town and external factors.  The idea of taking over is that we are a non-fracking company.  The idea will be to somehow convince the locals over the next few months that there will never be any fracking on the site.”

So was the fact that Angus haven’t been involved in fracking a factor in the deal? Mr Tidswell said:

“Yes, effectively, we had various discussions with them [Cuadrilla], and the idea was they are a fracking company and are not welcomed at the site. We are not a fracking company. We don’t inject into formations.  Hopefully we can get that across, but until the deal concludes we haven’t really started community engagement.”

Links

Questions on onshore oil and gas 17th April 2018

Westminster House debate on UK oil and gas industry, 19 April 2018

49 replies »

  1. It is your previous posts that indicate a weakness regarding questions PhilipP. Who owns TE?

    Find the facts, and stick with them-quite straight forward. Not rocket science.

    If you want to play the anti capitalist card then one little problem. Alphabet, owner of Giggle, unveiled bumper quarterly profits of $9.4 billion last night. Maybe that’s an excuse for not doing the research?

  2. Nothing anti-capitalist about any of my arguments Martin. It just suits you to fit that smear into your narrative while avoiding the real issues e.g. take responsible capitalism for instance – with a triple bottom line: economic, social AND environmental. That’s not rocket science either. But try doing some real research to include all three … too much like hard work for some I’ve noticed.

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