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Cuadrilla’s Two-Year UK Fracking Battle Set to End Thursday

Kelly Gilblom, Bloomberg

A two-and-a-half year battle over whether Cuadrilla Resources Ltd. can hydraulically fracture as many as eight wells in the British countryside is scheduled to end with an announcement from the government.

U.K. Secretary of State for Communities Sajid Javid has said he will make a decision on whether Cuadrilla can resume work after the company caused two small earthquakes at a separate site in 2011. A one-year ban on fracking followed the tremors and exploration of the U.K.’s shale basins using the technique has been effectively paused for five years.

The ruling will be the final word on whether Cuadrilla can move forward, unless opponents to the decision mount a legal challenge, and the decision is a bellwether for the European gas industry. As domestic gas supplies decline, other U.K. fracking hopefuls from Ineos Group Holdings Ltd. to IGas Energy Plc are seeking clues about sentiment toward the controversial practice.

“An authorization will allow the U.K. to see if they can extract this unconventional resource in a competitive way,” Thierry Bros, a senior research fellow at the Oxford Institute for Energy Studies and a former gas analyst at Societe Generale SA, said by e-mail. “If this is not possible, like Poland, then this will not happen anywhere in Europe.”

Cuadrilla CEO Francis Egan has said approval will give the country a better sense of its shale gas resource base and may quell opposition to the practice if the wells are drilled without any incidents. If it can be done in a profitable way, it will push other European states from France to Germany and the Netherlands to review bans on the practice, said Bros.

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