2020 was a frack free year in the UK because the shale gas industry failed to persuade ministers to lift blocks on the process.
Other key projects planned for 2020 were cancelled or delayed by the Covid-19 outbreak and low oil prices.
In this review of the year, we’ve picked out key events and developments. The red links in the text will take you to the original DrillOrDrop news articles. Please let us know what we have missed.
2020 was the first year since 2017 when there was no high volume hydraulic fracturing in the UK.
A moratorium, imposed in November 2019, remained in force in England. Presumptions against fracking also continued in Scotland, Wales and Northern Ireland.
On the first anniversary of the English moratorium, the regulator, the Oil & Gas Authority (OGA), dismissed industry research proposals to better predict induced seismicity.
It told DrillOrDrop:
“the research proposed thus far by industry would be insufficient to satisfy us that associated hydraulic fracturing could take place consistent with the government’s policy aims.”
In December, the OGA published studies on the 2019 earthquakes caused by fracking at Cuadrilla’s Preston New Road site in Lancashire. They concluded that induced seismicity from fracking was unpredictable and difficult to manage.
The Department of Business, Energy and Industrial Strategy, which imposed the moratorium, responded:
“The government maintains its position that fracking will not be allowed to proceed in England unless compelling new scientific evidence is provided.”
Previously, the energy minister, Kwasi Kwarteng, had said the debate on fracking had “moved on”. It was, he said “not something that we’re looking to do”. Opponents said it was time for the fracking industry to give up. But the minister dismissed calls to extend the moratorium to other forms of well stimulation, such as acidisation.
During 2020, Cuadrilla cleared most of the equipment from the Preston New Road site. The company described itself as largely non-operational” and declared a £38m loss. It gave up its headquarters at Bamber Bridge, near Preston. Key members of staff have left the company and costs were “very significantly reduced”. In December, the Environment Agency reported that Cuadrilla had surrendered its permits for drilling, fracking and flaring.
But the company said it had retained its “extensive technical database, corporate knowledge and access to technical and operational capability”. It predicted the value of UK gas would be re-evaluated in the future and that Cuadrilla remained “well positioned to respond”.
The industry repeatedly said earthquakes caused by fracking were relatively rare and the risks varied by formation. It said other industries, such as quarrying, construction geothermal, caused seismic events but were allowed to operate.
Aurora drops Altcar Moss fracking plan
In July, Aurora Energy Resources withdrew its plans to frack at Altcar Moss, near Formby in Lancashire.
The announcement, a year after the application was first submitted, blamed the moratorium on fracking.
Lancashire County Council had been expected to decide the application within weeks. A council consultant had recommended it should not be approved because there was insufficient evidence to support Aurora’s conclusion that would be no likely significant effects on protected wildlife.
IGas seeks more time at Misson shale gas site
IGas announced it wanted to keep open its Misson shale gas site in north Nottinghamshire for future fracking and drilling.
The company had drilled one of two permitted shale gas wells at the site under the current planning consent, which expired in November. In an application for another three years, IGas said it would not carry out any exploration work while the fracking moratorium was in place. But it said if the moratorium were lifted it would seek to drill and frack at the site.
In Cheshire, IGas saw delays and disappointments. There was no news on the outcome of the inquiry into its plans to test its Ellesmere Port shale gas site. The decision by the Secretary of State for Housing, Communities and Local Government had been due by 8 April 2020. There is no new decision date.
IGas plans to drill and frack nearby at Ince Marshes also looked in doubt in 2020. The landowner, Peel Holdings, said there were “currently no plans to drill at any of the plots under the consented Protos development”. It said the plot previously allocated to IGas had been “taken forward for another development which will form part of the Plastic Park planned at Protos”.
Ineos cuts value of shale assets
In October, Ineos, the biggest shale gas licence holder in the UK, cut the value of shale assets to zero, in response to the moratorium on fracking. Accounts for the year to December 2019 wrote down the entire value of more than £63m in exploration and evaluation assets and almost £1m in oil and gas properties.
The company also gave up plans to drill 22 new wells for coalbed methane at Airth in Falkirk. This was a long-running planning dispute dating back to a public inquiry in 2014. It had looked as if the inquiry might reopen but in March Ineos’s lawyers told the Scottish government it was withdrawing from the appeals.
Ineos carried out no work in 2020 at its permitted shale gas sites at Harthill in South Yorkshire and Marsh Lane in Derbyshire. There’s been no news on what is planned or when.
There was also no news on the outcome of a planning inquiry into Ineos’s third shale gas site at Woodsetts in south Yorkshire. The decision, to be made by the Secretary of State, had been due in April but was delayed with no new deadline date.
Drilling activity in 2020 centred on Rathlin Energy’s West Newton B site in East Yorkshire.
Site work started in April, just weeks before the planning deadline. Drilling began in October but the borehole missed one of the target formations. A sidetrack well drilled in December was said to have “exceeded expectations” with a “substantial hydrocarbon accumulation”.
There was also well intervention work at Horse Hill near Gatwick Airport, where UK Oil & Gas (UKOG) sought to improve disappointing oil flows. A test began in early November but no results have been publicly disclosed.
Company news: Ownership, Covid and cost cutting
Cuadrilla In February, the Australian mining group, AJ Lucas, took control of Cuadrilla, buying a 45% stake held by the New York-based private equity firm, Riverstone. Cuadrilla’s chief executive, Francis Egan, joined the AJ Lucas board. Another director of Hong Kong-based Kerogen Capital, a key investor in AJ Lucas, got a place on the Cuadrilla board. Later in the year, Centrica gave up its stake in Cuadrilla’s shale gas licence in Lancashire.
IGas In June, IGas announced redundancies, including its chief finance officer, and said it was giving up the lease on its London headquarters. The following month, IGas declared a pre-tax loss of £59.1m, up from £25.1m in the previous year. It shut in about 15 sites at the start of the Covid-19 outbreak. Five sites remained closed in September. Production in the first half of the year was down 18% at 1,940 barrels of oil equivalent per day.
Egdon Resources Egdon blamed Covid for its failure to construct and drill at North Kelsey in Lincolnshire and the need for an extension to its planning permission. See more in Planning.
Decisions At the start of the Covid-19 outbreak, councils in West Sussex and the Isle of Wight delayed decisions on oil and gas applications at Balcombe, Broadford Bridge and the Isle of Wight. See more in Planning.
What people think about fracking?
In the months following the fracking moratorium, a quarterly government survey revealed record high opposition to UK shale gas and record low levels of support.
The survey carried out in March found opposition was 45%, growing from a low of 21% in December 2013. Support for fracking fell to 8%, down from a record high of 29% in March 2014.
Changes to the survey fieldwork because of Covid-19 meant that the next two surveys in 2020 could not be compared with March results. The September survey, carried out online rather than face-to-face, found that 36% opposed fracking and 24% supported it.
In January, Egdon Resources finally secured planning permission to produce oil for 15 years at its exploration site at Wressle, near Scunthorpe. The decision by a planning inspector brought to an end a dispute between Egdon and North Lincolnshire Council, which dated back to 2016. The scheme had been refused three times and gone through two public inquiries. The council, which withdrew its case four months before the second inquiry, was ordered to pay £403,000 in costs.
Preparation work has been carried out at the site but, so far, no oil has been produced. The company dropped plans to stimulate the oil flow by acidisation. But it confirmed in September it would use proppant squeeze, a form of small-scale fracking. Local campaigners remain concerned about what they see as “considerable hazard” of proppant squeeze in a deviated well.
The workover rig for the proppant squeeze is expected in the New Year. The Wressle site is critically important to the commercial future of Egdon. The company announced that its late life oil fields were unprofitable at prices in April 2020.
Dunsfold – rejected twice
UKOG was twice refused planning permission to drill for gas at Loxley, near the village of Dunsfold in Surrey. The first refusal, in June, was later declared invalid because of technical problems with the online planning meeting. The second refusal was by the same margin. UKOG said it would appeal.
Elswick: Lancashire County Council agreed in July extend the life of Cuadrilla’s Elswick gas site for another five years. The company said it wanted to do maintenance work on the well and replace an existing unit which generated electricity from the site’s gas.
Broadford Bridge: West Sussex County Council approved plans by UK Oil & Gas for another two years at the Broadford Bridge oil site. The decision, also in July, was the third time extension at the site near Billingshurst. It was approved by 10 votes to 1.
North Kelsey: In September, Lincolnshire County Council extended the life, for a second time, of Egdon Resources’ North Kelsey site. The site was first granted planning permission in 2014 but, so far, the only work carried out has been the site entrance and two laybys
Arreton: UKOG applied for permission in March to drill for oil at Arreton on the Isle of Wight. Highways officials recommended refusal of the application on road safety grounds. In December, the officers lifted their objection to a revised application, which is subject to public consultation in January 2021.
Balcombe: Angus Energy withdrew plans for a three-year well test at Balcombe in West Sussex after council planners recommended refusal. They said the proposal was “not in the public interest” and “not appropriate to the area”. In August, revised plans for a shorter test were published. A decision on the second application is expected in early 2021.
Puddletown: South Western Energy’s application to drill for oil in Dorset has not yet been decided. In February, the Environment Agency objected to the application over a failure to assess the risk to water. An extension date of 28 January 2021 has been agreed between Dorset County Council and the company.
Biscathorpe: In November, Egdon Resources announced it would seek to drill a sidetrack well at its oil exploration site at Biscathorpe in Lincolnshire. The application is expected by the end of February, the company said. A previous well at the site failed to find its target.
West Newton: Rathlin Energy announced plans for two new well sites in East Yorkshire, which it is calling West Newton C and D. East Riding of Yorkshire Council decided that there was no need for environmental impact assessments.
Environmental campaigner Sarah Finch lost her legal challenge to the decision by Surrey County Council to grant permission for 20 years of oil production at the Horse Hill site. The case became nationally important when it sought to bring UK planning policy into line with climate change strategy. If it had been successful, it would have required future fossil fuel projects to consider the carbon emissions from the use of oil or gas.
Four women campaigners won the right to continue their long-running opposition to an injunction against protests at UKOG oil sites in Sussex and Surrey. A hearing at the High Court is expected in February 2021.
In October, another campaigner, Eddie Thornton, lost his judicial review case over the way the OGA handled the sale of Third Energy. He had argued that the OGA failed to take account of the risks that Third Energy could not afford to pay for well decommissioning. But Mr Justice Robin Knowles concluded:
“In my judgment Mr Thornton’s proposed Grounds are not made out. In the present case I consider the appropriate course is to refuse permission to bring a judicial review.”
The first anti-fracking campaigners found guilty of breach a protest injunction failed to overturn the judgement against them. Appeal court judges ruled that Katrina Lawrie, Christopher Wilson and Lee Walsh were in contempt of court. A suspended prison sentence imposed on Ms Lawrie was reduced from two months to four weeks.
Cuadrilla abandoned key parts of its injunction against protests at Preston New Road. The changes brought the injunction into line with a ruling at the Court of Appeal on the Ineos injunction in 2019 and met demands by campaigners made at the High Court.
In October, two activists occupied the rig at Horse Hill, in protest at oil production at the site. Lindsay Parkin, a management consultant from Brighton, has denied aggravated trespass. His trial is due in 2021. Alistair Sandell, a horticulturalist from Uckfield, admitted the same charge and was fined £360.
This was the latest in a series of protests about activities at Horse Hill. In June, two people blocked the site entrance and another two unfurled a banner inside the site. The Crown Prosecution Service (CPS) discontinued cases against them, saying there was “not enough evidence to provide a realistic prospect of conviction”.
The CPS also abandoned a trial against 12 anti-fracking campaigners who parked a caravan in front of Cuadrilla’s Preston New Road site. The case, which became known as the ‘Caravan of Love’ trial, had been expected to be heard at Preston Magistrates Court in June, more than two years after the protest. But the CPS said a prosecution was “not needed in the public interest”.
Research and briefings
A study by Manchester University concluded that a methane release at Cuadrilla’s Preston New Road shale gas site was equivalent to 143 transatlantic flights. The release of unburnt methane happened from 11-16 January 2019 during a nitrogen lift operation.
Emeritus professor David Smythe argued in a paper that “woefully inadequate” regulation of UK onshore oil and gas risked environmental damage
Research by the University of Stirling concluded that public health concerns about fracking and shale gas were either marginalised or ignored in England.
A briefing by the Weald Action Group made the case that the use of hydrogen was no justification for onshore oil and gas expansion
Climate change and diversification
The hydrocarbon industry received formal warnings during 2020 to take climate change seriously.
Lord Deben, chair of the Committee on Climate Change, the government’s climate advisor, told hydrocarbon companies they would need to become “wholly different businesses” if they were to “maintain their position” in the economy.
A report by the UK Citizens Assembly on Climate Change rejected fossil fuels and carbon capture and storage.
Tim Eggar, the chair of the Oil & Gas Authority, warned companies to stop “navel gazing” and do much more to solve the challenges of climate change.
The government’s long-awaited Energy White Paper warned the oil and gas sector it “must go considerably faster in reducing its own carbon footprint or risk losing its social licences to operate”.
Several companies announced plans for diversification, some of which involved low carbon plans.
Third Energy told DrillOrDrop it was looking to use old gas wells in the Ryedale district of North Yorkshire to produce geothermal heat.
Angus Energy is also considering geothermal schemes and IGas acquired a geothermal firm which has plans for a deep renewable heat scheme in Stoke-on-Trent in Staffordshire. IGas also announced a partnership with a US company to turn methane extracted from sites in south east England into hydrogen. Initially, IGas said, it would produce grey hydrogen, where carbon was not captured or stored.
The industry continued to argue that onshore oil and gas had a lower carbon footprint that imported production.
Licence surrenders and extensions
UKOG relinquished its licence PEDL143 in the Surrey Hills area of outstanding natural beauty. This brought an end to a long-running campaign to prevent oil drilling in the area. UKOG had acquired operation of the licence from Europa Oil & Gas, which had sought to drill near the Leith Hill beauty spot. That scheme went through two planning inquiries and two court cases before it collapsed when the Forestry Commission refused to renew the site lease.
The only current petroleum licence in Northern Ireland was also surrendered. Terrain Energy gave up PL1/10 which had allowed controversial drilling for oil in Woodburn Forest in 2016. That operation had prompted protests and a legal challenge. The well was plugged and abandoned when two sandstone targets were found to be water wet.
The Oil & Gas Authority extended the exploration phase of 23 licences across England in 2020.
In Lancashire, Cuadrilla got another three years for PEDL165 near Blackpool and Aurora Energy Resources got two more years for PEDL164 near Formby. Rathlin Energy got two more years to drill in PEDL183 in East Yorkshire. Its partner in the licence, Reabold Resources increased its stake to 56%.
Another UKOG licence, PEDL234, which straddles the West Sussex/Surrey border, was extended for two years. There was also more time for the Balcombe licence in West Sussex (PEDL244), Horse Hill in Surrey (PEDL246), and PL235 at Brockham, also in Surrey.
What didn’t happen in 2020
A year ago, we predicted that Rathlin Energy would drill at its West Newton B site. And, as we’ve reported, it did. But there’s been no news on several of the potential developments we mentioned.
- IGas did not publicly identify a new site in the neighbouring PEDL licence to Dunsfold in Surrey
- Cuadrilla did not disclose the results of a promised “examination of various acreages ahead of an anticipated resumption of exploration activities”.
- There’s been no progress at Ineos shale gas sites in South Yorkshire or Derbyshire
- Egdon Resources did not drill at North Kelsey or Biscathorpe in Lincolnshire
- UKOG did not drill any of its four new production wells permitted at Horse Hill site in Surrey
- IGas did not drill a second shale gas well at Misson in north Nottinghamshire
- Angus Energy did not find a buyer for its Brockham licence in Surrey
Please keep in touch
DrillOrDrop is always very grateful for news about the onshore oil and gas industry across the UK. Please let us know about events and key issues that you think we should be reporting on. Contact here
Look out for our article on what to watch our for in 2021