UKOOG responds to Welsh Affairs Committee report on shale gas

16 June 2014

United Kingdom Onshore Oil and Gas (UKOOG) notes the Welsh Affairs Committee report on shale published today and welcomes the conclusion that natural gas forms a key part of the UK’s energy supply. The committee correctly identified that natural gas produced in the UK is important not only for electricity production, but also for domestic heating, cooking and industrial production and the Committee considers it to be vital that the UK identifies new sources of gas if it is to safeguard the UK’s security of supply.

Ken Cronin, CEO of UKOOG, said “We are committed to working with both the UK and Welsh Governments to ensure that we achieve the significant potential benefits that shale can bring to Wales and the UK as a whole. We are at an early stage in the development of shale gas in Wales as well as the rest of the UK and it is vital that we now get on and drill exploratory wells that will provide the basis for a commercial industry.”

The Study on Skills and Supply Chain Opportunities, produced by EY earlier this year and commissioned by UKOOG, estimated that the industry will invest up to £33bn and create 64,500 jobs in the UK, many of which are likely to be in Wales. The report identified gaps and opportunities and a series of recommendations which are now being addressed. Included in this report there were a number of recommendations with respect to water and waste management.

The UK has a long, safe and successful history of oil and gas production both onshore and offshore. The UK has already drilled more than 2000 wells onshore and about 10% have used hydraulic fracturing techniques. A significant number of these sites exist or co-exist within areas of outstanding natural beauty, nature reserves and sites of special scientific interest (SSSI). The industry has been present in communities and touristic destinations for decades without disruption or cause for locals to be alarmed.

The industry and regulators look at each site on its merits including geography, topography and geology, this is the right scientific approach. Any hydraulic fracturing proposals would be subject to a rigorous, evidence-based approach in the development and deployment of this technology, there is no evidence that a buffer zone adds to the mitigation of risk. The industry already employs alongside the environmental regulators practical buffer zones to take in consideration issues around water, other bore holes, mining activity, rivers, noise etc.

The rules around Environmental Impact Assessments (EIA) are governed by European legislation. In 2013 the industry in the UK made clear that it would go further than the European regulation and ensure that all proposed operations involving hydraulic fracturing would be covered by an EIA, agreed with MPAs. In addition to this each operator will compile an early environmental risk assessment (ERA) which will be discussed with local communities. The purpose of compiling an ERA for shale gas projects is to provide at an early stage a comprehensive review of all potential safety and environmental (including health) risks relevant to the proposed shale gas activities, and to show how these will be mitigated and managed. As part of pre-application consultations, each Operator will engage directly with local communities on the contents of the ERA. This document will then inform the Environmental Impact Assessment and the environmental permits.