Report prepared by UK Parliament Committee urges development of natural gas and the use of hydraulic fracturing

On May 8, 2014, the House of Lord s Economic Affairs Committee strongly endorsed the United Kingdom’s development of shale gas resources and the use of hydraulic fracturing in its report entitled “The Economic Impact on UK Energy Policy of Shale Gas and Oil.” Successful development would provide substantial economic benefits, reduce imports, and help maintain security of supply.

Pointing to the successful development of shale gas in the United States, the Committee states that “exploration and appraisal are urgently needed to establish the economic potential of the UK’s shale gas and oil resource.” Without timely development, the UK “runs a serious risk of losing the energy intensive and petrochemical industries which depend on competitively-priced energy and raw materials…”

While recognizing that the public’s concerns about environmental and human health issues “must be taken seriously and every possible effort made to reduce or eliminate risk and provide reassurance,” the Committee considers these risks to be “low if shale development is properly regulated…,” with wells properly constructed and sealed.

Urging that the UK “seize the opportunity” to develop its shale resources, the Committee expresses concern that “regulatory uncertainty is blocking development” because the UK Environment Agency has not received or approved any permit applications since the fracking moratorium was lifted in 2012.

Seeing the development of shale oil and gas as “an urgent national priority,” the Committee recommends that the Government “go all out for shale” by streamlining its regulatory structure and by reassuring the public that environmental and health risks are low with proper regulation. Also the Committee suggests that energy companies should improve their presentation and communication skills to help secure public support.


This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.