Dan Byles is the MP for North Warwickshire and Bedworth and chairman of the UK’s all-party parliamentary group for unconventional oil and gas. Natural Gas Europe spoke with him about the prospects of shale gas in the United Kingdom, with an eye on the coming changes in the regulatory framework.
Pundits suggest that the UK will probably be the first country in Europe to produce commercial shale gas. Do you agree with this statement?
The UK is, of course, currently behind Poland in terms of exploration. However with the problems we have seen recently in Poland and given the strong political support in the UK for developing shale gas, I expect the UK to move forward slowly and steadily. I believe we will see the UK lead the way in setting high regulatory standards and in developing a safe and productive shale gas industry. I have had conversations with a number of investors and multinational companies who are all looking to the UK to lead the way in Europe.
How politicized is shale gas? How can it influence the next general elections?
There is currently widespread political consensus in favour of developing shale gas. The Conservative Party is strongly in favour, with both the Prime Minister (David Cameron) and the Chancellor (George Osborne) in favour. The current Secretary of State for Energy & Climate Change (Ed Davey) is a Liberal Democrat, and he is in favour of developing shale gas. The official Labour Party position is in favour of developing shale gas. Where I expect to see strong political arguments are at a local level, where shale gas may well influence local council elections. But I don’t expect it to significantly influence general elections.
In this context, what is the role of local politicians? Do you think that they are generally in favour?
Local politics is more complex, and I expect to see significant differences of opinion that will vary from location to location. Ultimately, for local politicians to support shale gas we will need to see a strong community benefit scheme that ensures local people share in the financial benefits of shale gas. Opinion polling across the UK shows that public acceptance of shale gas has been slowly but steadily rising over the past three years, and public fears have been falling. I believe that once we see a number of shale gas pads in operation, people will see that they are not as frightening as the opponents claim and they will see the benefits to local communities in terms of jobs and financial benefit. This will help to boost local acceptance.
How do you plan to create a mechanism to ensure that local communities benefit financially from shale gas developments?
This very subject is currently being considered by the government, and there is widespread agreement among all stakeholders that local communities must benefit from shale gas developments in their areas. We expect an initial announcement on draft proposals in July. I expect the new scheme will involve a percentage of revenue annually from each well going to the local community in some form.
Do you expect further changes in the UK regulatory framework?
Yes, the UK is currently reviewing a number of national policies relating to shale gas. These include: national guidance on the local planning rules for shale gas infrastructure, national guidance on ‘community benefit’ for local communities in the areas where shale gas will be developed, review of the regulatory framework for shale gas. Some of these are expected to be announced by the middle of July 2013. The UK has set up a new government body called the Office of Unconventional Gas and Oil with a remit to coordinate between government departments and to streamline regulations to help promote shale gas development.