UKOOG Fit to Frack response

14 March 2014

UK Onshore Oil and Gas, the representative body of the UK’s onshore oil and gas industry, notes the contribution made by leading conservation charities to the debate on shale gas regulation in their report: “Are We Fit To Frack.” Of the 10 recommendations in the report, the vast majority are already in place or are in discussion. We look forward to being able to discuss with the six bodies who contributed to this report about the best way forward so that we ensure all misconceptions about the shale gas industry in the UK can be addressed.

Ken Cronin Chief Executive UKOOG commented “We have studied this this report and the fact that many of the recommendations are already in place in the UK or are in the process of being put in place. We hope that the publication of this report, despite a number of critical inaccuracies, will kickstart a process of open dialogue which we have already proposed to conservation agencies. The economic and environmental imperative to use the UK’s indigenous resources of gas is clear. The US has managed to lower both emissions and energy prices at the same time as maintaining investment in low carbon technologies such as renewables and increasing investment in manufacturing industries, while in Europe we have increased emissions, increased coal consumption, increased prices and are suffering economically. A well regulated shale industry has an important part to play in the UK energy mix and economy.”

The UK onshore oil and gas industry is one of the heaviest regulated industries in the UK and our regulators regime already acts as an exemplar for the rest of Europe, as borne out by the recommendations made by the EU Commission recently. The report published today leans heavily on certain reports from the US where the regulatory system is different, less stringent and suffers from the fact that no measurements were ever made before drilling making comparisons of before and after extremely difficult.

The Government recently published a regulatory roadmap that shows the industry is separately regulated by four layers of oversight provided by the Environment Agencies (EA, SEPA, NRW), the Health and Safety Executive (HSE), the Mineral Planning Authorities (MPAs) and by The Department of Energy and Climate Change (DECC).

The industry currently has to comply with 17 European Directives, has to apply for up to nine separate environmental permits and has to reach binding agreements on noise, hours of operation and other local social issues. In compliance with the Industry’s engagement charter, each operator engages with the public at six points during the pre-consultation, planning and permitting stage.

The report centres initially on climate change and the decarbonisation of the electricity sector but completely ignores the fact that gas currently provides over 80% of heat in our homes and businesses and provides vital feedstocks for our industries that produce products ranging from toothpaste through to plastics for day to day items.

The use of natural gas extracted from shale reservoirs has significant potential to reduce the UK’s overall carbon emissions. Recent reductions in the UK’s carbon emissions have been largely due to the displacement of coal-based power generation in favour of natural gas. In 2011, this accounted for 35% of the UK’s primary energy consumption compared to just 16% for coal. However, plenty of scope still remains to reduce the UK’s reliance on coal. DECC figures show that in 2012, coal power had overtaken gas to become the biggest single source of UK electricity generation.

Despite this, most forecasts show that by 2030 the UK will be 80% reliant on our gas supplies from outside the UK using transportation methods that are far more harmful to the environment and produced under regulatory regimes that are far less stringent and transparent than in the UK.

The approach of industry in the UK has allowed time for thorough research of shale gas and hydraulic fracturing by leading scientific institutions, including the Royal Society, the British Geological Society, the British Geological Survey, WaterUK, the Chartered Institute of Water and Environmental Management (CIWEM), Public Health England and Durham University. These studies have shown in a properly regulated industry the risks can be minimised. We believe that the industry is properly regulated and can provide significant economic benefits through energy security, job creation, supply chain enhancement and direct and indirect community benefits.