London — The UK shale gas industry has vowed to continue efforts to prove it can operate safely despite the UK government introducing a moratorium on the use of hydraulic fracturing -- or fracking -- in a U-turn on its previous policy of support for the sector.
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The government -- which had previously said it supported the development of shale gas -- said Saturday it would put in place a moratorium on fracking in England "with immediate effect" after an analysis of the environmental impact of work at the Cuadrilla Resources-operated Preston New Road site.
Cuadrilla was forced to suspend work at Preston New Road after a magnitude 2.9 tremor occurred on August 26 and the Oil and Gas Authority said its latest scientific report found it was impossible to predict accurately the magnitude of future earthquakes caused by fracking.
The decision effectively kills off the UK's nascent shale gas industry, which has suffered a number of setbacks and widespread opposition from local communities in recent years.
CEO of industry group UK Onshore Oil and Gas, Ken Cronin, said the shale gas industry would, however, continue to work with the UK authorities in a bid to ensure the country's "world-class resource" did not stay in the ground.
"We are fully committed to working closely with the OGA and other relevant regulators to demonstrate that we can operate safely and environmentally responsibly," Cronin said in a statement.
"Given the size of the prize at stake -- the significantly lower carbon footprint of domestic gas compared to imports and the significant investment the industry and the government have already made -- we believe this is the right approach," Cronin said.
Cronin said the UK had "no excuse" to continue importing gas from overseas when it was home to so much gas of its own.
Cuadrilla on Monday said it would review the latest report from the OGA in detail and would continue to work "constructively" with the agency.
It said it would provide further detailed data -- including from the second fracked well at Preston New Road -- to address concerns "sothat the moratorium can be lifted and the highly prospective Bowland gas resource further appraised and developed."
Fellow shale gas explorer IGas -- which operates the Springs Road and Tinker Lane sites in central England -- also said it would spend time understanding the detail within the report.
"We have confirmed a world-class resource at our site in North Nottinghamshire and remain committed to working with regulators to demonstrate that we can operate safely and environmentally responsibly," CEO Stephen Bowler said.
Bowler pointed out that each site and basin can have "substantially different" geology. "We continue to analyze and understand the dataavailable to us," he said.
"Given the learnings from the wells that have been drilled recently by the industry, not least the well drilled in our acreage at Springs Road, we know that UK shale has the opportunity to contribute meaningfully to the UK's energy requirements," he said.
Analysts, though, have questioned the commerciality of shale gas in the UK, with S&P Global Platts Analytics having previously assumed just negligible production later in the 2020s.
"Political support was always tentative and the economics questionable," Platts Analytics managing analyst James Huckstepp said Monday.
The government's move -- which was criticized by the the leader of the main opposition Labour party's leader, Jeremy Corbyn, as a pre-election stunt -- follows a report last month from the government spending watchdog pointing to the slow pace of work in the UK.
The National Audit Office said the UK government in 2016 said it had hoped that up to 20 wells would be fracked by mid-2020, but that only three wells have been fracked to date.
All the other major political parties in the UK have said they wanted an outright ban on fracking, with the governing Conservative Party until Friday the only group to support fracking.
The UK is holding a general election on December 12.
The UK shale gas industry was dealt two major blows in August, first when new research suggested the country's recoverable shale gas reserves could be up to five times lower than thought, and secondly when fracking was halted at Preston New Road after the large earth tremor.
The research, supported by the British Geological Survey, said economically recoverable reserves of Bowland shale gas could be less than 10 years of current UK gas consumption -- implying a ceiling of around 800 Bcm.
In 2013, the BGS estimated that the Bowland Shale could hold up to 1,329 Tcf (37.6 Tcm) of gas in place. With a recovery rate of 10% this would mean recoverable reserves of as much as 3.8 Tcm, enough to meet the UK's current gas demand for almost 50 years.
-- Stuart Elliott, Stuart.Elliott@spglobal.com
-- Edited by Jonathan Dart, email@example.com