The government’s potential reboot of onshore shale oil and gas projects after the test wells made by Cuadrilla sent Egdon Resources (EDR) shares up 11 per cent on 6 April, thanks to the company's East Midlands shale holdings.
"While shale gas extraction is not the solution to near-term price issues, it is right that all possible energy generation and production methods are kept on the table following the unprovoked invasion of Ukraine by President Putin’s regime,” a government statement said.
The British Geological Survey will look at whether there are “new techniques in use [in hydraulic fracturing, or fracking] which could reduce the risk and magnitude of seismic events”. The suspension of fracking came in 2019 after Cuadrilla’s Lancashire wells caused tremors during testing, including a quake that registered 2.9 on the Richter scale.
Professor Michael Bradshaw, co-director of the UK Energy Research Centre, said research had shown it would be “difficult for the industry to meet” the safe, sustainable and minimal disturbance threshold the government wants. “This is because the orientation of existing geological faults means they may be more likely to be reactivated during the hydraulic fracturing operations required to extract shale gas from the rocks,” he said.
The UK’s oil and gas regulator, the North Sea Transition Authority (NSTA), signalled a shift in policy last week, agreeing to a Cuadrilla application to push back a deadline to plug the Lancashire wells.
Business and energy secretary Kwasi Kwarteng said it was "absolutely right that we explore all possible domestic energy sources", although cautioned that it would "take years of exploration and development before commercial quantities of gas could be produced for the market".
Egdon managing director Mark Abbott called the overall fracking review a “logical and welcome” move. "UK shale gas could be a strategically important national resource with the potential to reduce the UK's growing reliance on gas imports, whilst reducing gas prices, improving our balance of payments, increasing tax revenues and creating skilled jobs whilst importantly also reducing the carbon footprint of the gas we all use," he added.
Through a 2018 test programme, Egdon failed to find major oil reserves but said the Tinker Lane well did "encounter shales with a high gas content".
Bradshaw was sceptical that bringing shale wells online would have much impact at all even in the long term, and said cutting demand was the answer rather than finding new domestic supply.
"The inconvenient truth is that there are no easy ways to increase domestic gas supply in the UK," he said. "The North Sea is mature and the emphasis is on maximising recovery of remaining reserves as production continues to decline [so] the UK’s dependence on gas imports is set to keep increasing, reaching 70 per cent by the end of this decade."
