Cuadrilla’s Australian owner has condemned the reinstatement of the moratorium on fracking in England as a betrayal of the shale gas industry.
Speaking at the AJ Lucas annual meeting today, group chief executive Brett Tredinnick said:
“There is no rational scientific basis for the re-imposing of the moratorium, and it is a betrayal of an industry that has the potential to create tens of thousands of jobs across the North of England, generate billions in private sector investment, and provide local councils with much-needed tax revenue.”
Mr Tredinnick said the company had been “shocked” at the decision by Rishi Sunak to restore the moratorium last month.
He said the company would “continue to push for the removal of the moratorium to ensure shale gas can play a role in alleviating the UK’s energy crisis”.
A J Lucas raised nearly $20m in a share placing a week after the lifting of the moratorium by Liz Truss in September. The money was needed to fund A J Lucas’s operations in the UK, including spending on plant and equipment.
A J Lucas’s chairman, Andrew Purcell, told the meeting in Brisbane the return of the moratorium was a “profoundly disappointing decision”. He described it as:
“a curt dismissal of the genuine and considerable good faith effort invested by Francis Egan, CEO of our UK operations, towards a restart of our operations”.
He said the introduction of the moratorium in November 2019 was “unfair” and “its reintroduction particularly so”. He said:
“We and our partners have invested significant amounts of money in the UK and have always performed in full compliance with our licence conditions.”
The moratorium was introduced following fracking-induced earthquakes at Cuadrilla’s Preston New Road shale gas site near Blackpool in 2018 and 2019. The stronger seismic events were felt across the Fylde region. Nearly 200 people reported damage to buildings from the 2.9ML earthquake on 26 August 2019.
Cuadrilla has complained that construction and extractive industries have been allowed to generate higher levels of surface seismicity than shale gas operations.
Mr Purcell suggested that the real purpose of the moratorium for the UK government was “to provide a thin veil for a mindset of outsourcing fossil fuel production whilst loudly proclaiming green credentials to the domestic electorate”.
Cuadrilla has the largest acreage of shale gas licences in England. It said it spent $1.1m in the past year on maintaining its licences and pursuing strategies to overturn the moratorium.
The AJ Lucas statements did not refer to a court challenge on the moratorium. IGas, another leading UK shale gas licence-holder, has said it reserved the right to take legal action recover “significant” investment.
But Mr Purcell said:
“Increasing domestic production of gas, should be a national priority. However, imposing windfall taxes on oil and gas production and a vacillating position on fracking only underscores the regulatory risks associated with making long term investment decisions in the UK.”