DrillOrDrop’s round-up of the possible action on UK fracking and onshore oil and gas developments in 2020.
Will England see fracking in 2020? That depends on whether the government lifts its moratorium imposed in November 2019 because of the risk of earth tremors.
The government said the moratorium would stay in force until “compelling new evidence” was provided that fracking could be carried out safely.
So far, there’s been no indication of any new evidence, how long the moratorium will last and whether it will be challenged in court by the industry.
But Cuadrilla, the company whose Lancashire fracking operations caused tremors in 2018 and 2019, said in November it would “continue to work constructively” with the Oil & Gas Authority (OGA) to provide detailed data to address the concerns and lift the moratorium.
Just before Christmas, the Financial Times reported that Cuadrilla was lobbying the OGA to find “possible ways forward” for the fracking industry.
On the other side of the argument, opponents of fracking have called for a permanent ban and a halt to acid stimulation of oil and gas wells.
Cuadrilla’s planning permission to frack expired at the end of November 2019. The company said it would submit a new application to extend the duration of the permission but there’s no news about when this will happen.
The only other company granted planning consent for UK fracking is Third Energy. It failed to secure final government approval and was later sold to the subsidiary of a US company. In August 2019, Third Energy told residents it was focusing on conventional gas extraction. It did not, however, rule out fracking in future.
Will the government change the fracking regulations? During 2018 and 2019, the shale gas industry argued for a review of the traffic light system that regulates seismicity caused by fracking. Under the current system, fracking must pause if it induces tremors measuring 0.5ML or more. The industry said this was too cautious and the threshold should be raised. Cuadrilla argued that the regulations should take into account ground vibration.
The result of a public inquiry into Egdon Resources’ plans for long-term oil production at Wressle, north Lincolnshire, is likely to be announced early in 2020. If the result goes in Egdon’s favour, the company is expected to begin site operations quickly.
The inspector who heard the inquiry into Ineos shale gas exploration plans at Woodsetts in South Yorkshire must submit her report by 13 January 2020. The appeal has been recovered, which means the final decision will be made by the local government secretary, Robert Jenrick.
Mr Jenrick will also make the final decision on the inquiry into IGas plans to test its shale gas site at Ellesmere Port in Cheshire. This inspector’s report must be submitted by 23 January 2020.
Despite the moratorium, Aurora Resources is pursuing its planning application to drill and frack two wells at Great Altcar, near Formby. Lancashire County Council has carried out a public consultation exercise but there’s no news yet on when the application will be decided. The National Trust called for information to assess the impact on protected wildlife sites nearby. The government’s wildlife adviser, Natural England, said some surveys accompanying the application were incomplete and did not follow suggested methodology. It also said ecological and noise data should be reassessed.
Two UKOG planning applications (links here and here) to drill and test vertical and sidetrack wells at Dunsfold, in Surrey, are likely to be decided in early 2020. Surrey County Council’s current estimated committee date is 27 February 2019 but the application has been delayed five times so far.
We’ll also be watching for the submission of UKOG’s applications, expected soon, to drill for oil at Arreton and Godshill on the Isle of Wight.
Angus Energy’s planning application for production test at Balcombe, in West Sussex, will not be discussed, as expected, in January 2020. The proposal is not listed on the agenda for the 7 January planning meeting. A report by planning officers said “Environment Agency has objected. Awaiting further information from agent/applicant”. The next scheduled meeting is 4 February 2020.
West Sussex is also considering applications by UKOG for retention of its site at Broadford Bridge for 24 months and for retention of fencing, cabins and gates. The deadline for comments is 30 January 2020.
2020 could see companies reveal new drilling sites.
IGas said in July 2019 that it had identified a site near Dunsfold in Surrey, in the neighbouring PEDL licence to UKOG. A drop-in information event in August 2019 was cancelled. So far, there has been no information about a replacement date or news of an application.
In June 2019, UKOG said it was “making good progress” in finding drilling locations in PEDL143, in Surrey. They would be a replacement for Bury Hill Wood (Leith Hill), which was abandoned without site construction or drilling when the Secretary of State refused to renew the site lease. The PEDL, formerly known as Holmwood and operated by Europa, is now operated by UKOG and referred to as the A24 licence. The location of the sites has not yet been disclosed.
Will Cuadrilla announce plans for its licences in Yorkshire? Its Australian partner, AJ Lucas, announced recently that during 2020 Cuadrilla would “conduct an examination of various acreages ahead of an anticipated resumption of exploration activities.”
Several sites with planning permission could see work start or continue in 2020.
Cuadrilla still has consent to test the two wells at Preston New Road, near Blackpool, even though permission to drill and frack has expired. The company is currently doing a pressure test on the shale formation. We’ll be reporting on any developments at the site.
At Harthill in South Yorkshire, Ineos submitted a revised construction management plan in November 2019. Rotherham Council must approve this plan before work can begin on creating passing places on the proposed lorry route – a precondition of site construction.
Ineos’s other approved site, at Marsh Lane in Derbyshire, has seen no construction work. A spokesperson for Derbyshire County Council told us in November 2019 that planning officers had not heard from Ineos about how the company wanted to progress the scheme.
In an update last year, Reabold Resources, a partner in Rathlin Energy’s West Newton B site in East Yorkshire, said a vertical well would be drilled at the site in the first quarter of 2020 and a second, horizontal well, in the second quarter. Site construction at West Newton-B has not yet started and DrillOrDrop reported in November 2019 that an archaeological survey would be needed first.
Campaigners and investors are watching closely for a resumption of the well test on the second well at Rathlin’s nearby West Newton-A site. The test was suspended in August 2019 when oil, as well as the expected gas, was found. The partners in the project said the well test was being redesigned. The Environment Agency told campaigners in December 2019 that it had not been contacted about changes to the environmental permit.
Egdon Resources has planning permission until December 2020 for its oil exploration at North Kelsey, in Lincolnshire, where no work has yet been carried out on the pad. The company’s annual report said:
“Dependent upon securing a further farm-out, Egdon hopes to drill the North Kelsey Prospect in the next 12 months.”
Union Jack Oil has been raising money to fund its share of a sidetrack well at Biscathorpe, also in Lincolnshire. The well, spudded by Egdon resources in January 2018, was plugged and abandoned after it failed to find the primary target formation. But Egdon later said there was a “likely presence” of quality oil in the Dinantian limestone indicating “proximity to an effective petroleum system”.
UK Oil & Gas has planning permission for four new production wells and a water reinjection well, as well as long-term oil production at Horse Hill in Surrey. The Environment Agency has not yet granted an environmental permit for the new operations.
IGas has planning permission for a second well at Springs Road, Misson, in Nottinghamshire. So far, no detailed results of drilling the first well have been published and there’s no news on whether the company will seek permission to frack at the site or drill the second well.
Angus Energy’s cash flow depends on getting the gas flowing at its new site at Saltfleetby in Lincolnshire. The company said in December 2019 that it still needed approval from the OGA for a field development plan, as well as consents from the Environment Agency, Health and Safety Executive and North Lincolnshire Council.
Some of these projects could stand or fall on what happens to the wholesale price of gas.
DrillOrDrop reported today that the gas price ended the year at 29.8 pence per therm – significantly below the government’s central price assumption for 2020 of 48p.
Cuadrilla was reported in 2017 as saying its shale gas business could be viable at 40p.
If the price stays low, is UK shale gas viable in 2020?
News is expected early in 2020 about whether campaigners have won the right to make legal challenges to decisions by Surrey County Council and the OGA.
Sarah Finch, a Surrey resident, is challenging the grant of planning permission for oil production and extra wells at UKOG’s Horse Hill site (see above). She is expected to argue that the county council’s decision was unlawful because it failed to assess climate change impacts of the plans and oil produced by the site, as well as the impact on seismicity and development of green belt land.
Eddie Thornton is seeking a judicial review of the OGA’s decision to transfer the licence for gas production in Ryedale to Third Energy’s new owner. His case centres on who carries the cost of decommissioning.
The government opened the way in the Queen’s Speech for changes to the judicial review system. We’ll be following any proposals.
A decision by the Court of Appeal is also imminent in a challenge by the first campaigners to be found guilty of contempt of court for breaching a protest injunction. Two men and a woman, who took part in a protest outside Cuadrilla’s Preston New Road shale gas site, appealed against the finding and the suspended sentences imposed on them.
A trial of UKOG’s injunctions against protests outside its sites in Surrey and West Sussex could come to court in December 2020. This will be the first time an injunction against protests at UK oil and gas sites has been examined at a full trial at the High Court.
2020 could reveal answers to the following questions:
- Will Angus find a buyer for its Brockham licence in Surrey?
- Will Riverstone Holdings and Kerogen pursue the sale of their stake in Cuadrilla’s Lancashire licence, as reported in 2019?
- Will Third Energy maintain its reported focus on conventional gas – or will it seek another chance to frack at Kirby Misperton?
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