The future of shale gas production

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Large scale shale gas production could create thousands of jobs, improve energy security, boost economic growth and contribute almost £1billion to local communities through benefit schemes by 2020, according to a new government report.

Positive predictions

The Strategic Environmental Assessment (SEA) report, produced by AMEC, exhibits the prospective economic and environmental effects of further oil and gas activity in the UK, including shale oil and gas production.  This has been published ahead of the launch of a new licensing round for onshore oil and gas exploration.

The report compared ‘low activity’ and ‘high activity’ scenarios.  These indicated that 2020 could see the production of shale gas increase to around three times the current gas demand in the UK.  If so, this could result in up to 32,000 jobs created in the sector, around a 7% increase from today.  Communities would benefit from £100,000 per hydraulically fuelled site and then 1% of revenues for each well, which under the ‘high activity’ scenario would mean a pay out of almost £1billion.

To further encourage in shale gas development, the government has also announced that local councils would receive 100% of business rates collected from shale gas sites, worth up to £1.7million per year, on a typical site.

Minimise adverse impacts

However, the report does cautiously highlight the possible negative connotations of such activity.  These include increases in traffic congestion, emissions and more pressure on water resources.  The SEA does go on to suggest that existing regulatory controls, including the planning system, should ensure that any adverse impacts are minimised.

The Government has also produced a regulatory roadmap for shale gas.  This sets out the series of necessary permits and permissions required for developers to obtain, with a view to provide greater transparency around the permitting process for investors and local communities.

For more information, help or advice please contact Andrew Davison on 0191 211 7950.