Scottish Government reports show economic case for unconventional gas says UKOOG

8 November 2016

UKOOG, the trade body for the onshore oil and gas industry, welcomes today’s publication of studies into unconventional oil and gas by the Scottish Government which clearly demonstrate the economic case for promoting exploration in Scotland while showing a pathway for other risks to be mitigated. The industry will participate fully in the consultation announced by the Scottish Government and believes that the case for lifting the moratorium on unconventional oil and gas development has been made.

Ken Cronin, chief executive of UKOOG, said:

“The studies by experts including Health Protection Scotland, KPMG and the British Geological Survey, clearly demonstrate the case for lifting the moratorium on unconventional oil and gas development in Scotland.

“The experts show that the Scottish economy could benefit by over £11bn including up to £6.5 billion of spending in Scotland, creating over 3000 much needed jobs from unconventional oil and gas development and meeting up to 18 years of current Scottish gas consumption. This excludes the additional and important economic benefits to the chemical industry in Scotland including Grangemouth. In addition, local communities could be expected to receive up to £1bn in community benefits. The risks for issues like seismicity are said to be low, there is “inadequate evidence” of any detrimental health impacts and in all cases the risks can be mitigated by good industry practice - much of which is already in place - with industry guidance already published - and the strong regulation.

“We hope that the publication of these studies can lead to a reasoned debate across a wider audience about the future of the onshore oil and gas industry in Scotland.

“Gas plays an important role in Scotland’s domestic economy, with 79% of domestic heating provided by gas. In addition, industrial and commercial gas consumption makes up 43% of all gas consumed in Scotland. Scotland has the highest mean domestic consumption and also one of the highest commercial consumptions in the UK reflecting the industrial positon of Scotland. In fact, in 2013 88% of all Scotland’s energy came from either oil or gas.

“As an industry based on over 50 years of experience both onshore and offshore, we are confident that hydraulic fracturing can be done safely and environmentally sensitively within the regulatory environment in Scotland.

“We have had a well regulated industry in Scotland for many decades. We have drilled over 30 wells in the last 20 years. One of the first hydraulic fractures in the UK took place in Airdrie nearly 50 years ago and fracking also took place inside the Glasgow city boundary in 1989 at Easterhouse.

“The oil and gas industry has made a huge contribution to the economy of Scotland. Onshore gas and oil will benefit the Scottish economy, not only directly, with jobs created through oil and gas extraction, but also indirectly, as oil and gas is a critical raw material for the chemicals industry at facilities such as Grangemouth.

“The onshore oil and gas industry has also committed to a multimillion pound programme of benefits for local communities and stakeholders as well as boosting contributions to local councils.”


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Notes to editors

About UKOOG:

UKOOG is the representative body for the UK onshore oil and gas industry, including exploration, production and storage. The organisation’s objectives are to enhance the profile of the onshore industry, promote better and more open dialogue with key stakeholders, deliver industry wide initiatives and programmes and to ensure standards in safety, the environment and operations are maintained to the highest possible level. Membership is open to all companies active in the onshore industry including those involved in the supply chain.