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Drilling firm confident it will have the all-clear to resume fracking within a few weeks

IT was the sort of discovery that might make a minister for energy feel he had won the lottery in a world of rising energy prices and relentless pressure to reduce carbon emissions.

Chris Huhne, Britain’s Secretary for Energy, was told last month that Cuadrilla Resources, a 41 per cent Australian-owned exploration firm, had discovered massive deposits of clean, cheap gas in shale rock around Blackpool in northern England.

Cuadrilla said its exploration territory contained 56 times Britain’s annual gas needs.

Only 10-20 per cent of that might be recoverable, but Cuadrilla said there were several potentially similar sites around the country and that Britain was sitting on the sort of bonanza that had allowed the US to more than halve its gas prices in a decade.

But Huhne has not been celebrating loudly.

“I think he is still trying to work out how he should respond,” says Kevin Anderson, professor of energy and climate change at the University of Manchester.

“As the Energy Minister it could be very nice news, given that a lot of people in Britain are struggling to pay their fuel bills and a lot of our existing stock of nuclear and other power stations are due to go offline before too long. His problem is that he is also the Minister for Climate Change and I think he is genuinely committed to trying to do something about reducing Britain’s carbon emissions.”

Anderson says the development of a cheap new energy source with half the carbon emissions of coal could make it politically difficult to continue subsidising the creation of a major renewable energy industry, based largely on expensive offshore wind turbines. “From a climate change perspective, we should be leaving new fossil fuels like this in the ground and pushing on with renewables, but that will be a whole lot harder if the claims about these shale gas reserves turn out to be true,” he says.

“Yes, gas is cleaner than coal, but it would not end up displacing coal; it would displace renewables. The coal would still be used somewhere and the renewables would not be built.”

Two days before Cuadrilla’s September 21 announcement of its find, Huhne told the Liberal Democrats’ annual conference that he would stop the “dash for gas”, warning that the growth of gas-fired power plants, if left unchecked, would break Britain’s promise to cut carbon emissions and promote renewable energy.

“We will not consent to so much gas plant as to endanger our carbon dioxide goals,” he told the Liberal Democrats.

Asked about the extraction of shale gas, Huhne said the film Gasland showed “some extremely alarming pictures of people setting fire to their (water) taps because of methane gas” and was “a bit of a wake-up call”.

Such health hazards had occurred in the US because the Bush administration had changed clean water regulations to exempt hydraulic fracturing, or “fracking”, the process of forcing water into shale to cause small cracks and release the trapped gas.

“We have not exempted fracking from any environmental regulations in this country and we do not intend to,” Huhne said.

Asked in parliament about the Blackpool discovery, Huhne said if it did prove to be a massive source of cheap gas, “then obviously the technological imperative is to go forward with carbon capture and storage so we can use that gas in an environmentally friendly way”.

Supporters of shale gas say that is a worrying qualification because Britain has done precious little research on catching and storing the carbon emissions of coal, and virtually none relating to gas.

Fracking has been banned in France, New York and Pennsylvania because of safety concerns, and in Britain it has attracted its own opposition lobby group, Frack Off. The opponents say that fracking risks contaminating water supplies and releases some methane into the atmosphere, making the process as dirty as coal.

Anderson dismisses those concerns, even though he would prefer to see Britain rely on renewables rather than shale gas.

“We have produced a report saying that there are some challenges around water pollution and fugitive emissions but they can be controlled with the appropriate regulatory framework,” he says.

There is some scepticism in the resources industry about Cuadrilla’s projections for its gas reserves.

Mike Stephenson of the British Geological Study notes that his government-funded body has independently estimated the reserves at just 2.4 per cent of the amount claimed by Cuadrilla.

The test wells were shut down in May after two small earthquakes that Stephenson believes were caused by the test fracking.

“Tremors are part and parcel of fracking but normally they are tiny and these ones were a bit larger,” he says.

Paul Kelly, a spokesman for Cuadrilla, which is part owned by Australian oil services group AJ Lucas, says the firm is confident it will have the all-clear to resume fracking within a few weeks and hopes to announce details of the project’s commercial viability next year.

The Australian, 28 October 2011