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EU Red Tape Threat To UK Shale Boom

Tim Ross, The Sunday Telegraph

Britain’s fracking industry is being held back by environmental regulations drawn up in Brussels, a senior committee of the House of Lords is expected to say this week.

In a major report, the Lords are expected to call for permits to be granted more quickly to drilling companies to allow them to test the potential of newly drilled shale gas wells.

Government experts believe that Britain’s shale gas and oil reserves, buried deep underground, could generate billions of pounds worth of fuel in future.

Ministers hope that exploiting the shale gas and oil reserves, through the controversial process of fracking, could help secure a home-grown energy supply and reduce household gas and electricity bills in future.

David Cameron has said the Ukraine crisis should act as a spur to encourage Britain and the rest of the European Union to embrace fracking and reduce its reliance on imported gas from Russia.

But the House of Lords Economic Affairs Committee, whose members include the former Conservative chancellor, Lord Lawson of Blaby, is expected to conclude that it is impossible to know what the UK’s shale reserves will be worth without more widespread fracking.

The Lords committee has been investigating the potential impact of shale gas and oil on the UK economy and energy policy since October 2013.

They are expected to conclude that the potential benefits to Britain from fracking are huge but that progress in the exploration of new wells, and testing the “flow rate” of gas and oil from these wells, should be accelerated.

Hydraulic fracturing, or “fracking”, involves pumping water, sand and chemicals at high pressure into shale rock deep underground, which then fractures, releasing its reserves of gas and oil.

Environmental concerns have been raised over the potential risks to drinking water supplies from contamination by fracking waste chemicals and water, and the danger of causing earth tremors.

Cuadrilla, the shale gas exploration company, has written to the committee warning that progress has so far been slow due to the “very lengthy” process of agreeing permits to frack with the Environment Agency, the state regulator.

The company’s chief executive, Francis Egan, told the Lords committee that the past two years had seen “a huge amount of debate and development of environmental permit requirements for shale, not least in respect of the application of various European Union Directives”.

The company will submit fresh applications for fracking permits to the Environment Agency, including proposals to develop several new sites, “in the near future”, he said, adding that he hoped the regulator’s response would be “speedy”.

Industry groups warned the committee that Britain’s onshore oil and gas businesses were governed by 14 separate EU directives, ranging from water directives to minor waste regulations.

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