Government’s next move on shale gas significant for companies like PR Marriott Drilling
After the Conservatives were re-elected to government in December, a number of firms and environment campaigners will be anxious to discover whether the indefinite suspension on fracking is set to continue.
Shale gas extraction in England was suspended in August 2019 over earthquake fears, after an earthquake with a 2.9 magnitude was brought on by activity at a Cuadrilla Resources- the only company fully consented to extract shale gas- site in Lancashire.
After a subsequent report produced by the Oil and Gas Authority suggested that it was impossible to predict the probability or size of earth tremors caused by fracking activity, the Department for Business, Energy and Industrial Strategy announced in November that "further consents for fracking will not be granted" unless the industry "can reliably predict and control tremors”.
Business secretary Andrea Leadsom emphasised that the shutdown was a temporary measure and hinted that the suspension may be lifted if the extraction of shale gas is proven safe by science.
Labour, the Liberal Democrats and the Green Party favoured a permanent ban in the run-up to the election, yet the Conservatives have stopped short on committing to one.
Indeed, Leadsom believes that shale gas is a resource that the UK will “need for several years”.
She said at the time: "We will follow the science and it is quite clear that we can't be certain. The science isn't accurate enough to be able to assess the fault lines, the geological studies have been shown to be inaccurate. So therefore, unless and until we can be absolutely certain, we are imposing a moratorium.”
One firm which shares the sentiment that fracking presents a positive opportunity is PR Marriott Drilling, and so the government’s next move on the issue will likely be one of importance.
The firm, established since 1947 and headquartered close to Chesterfield, Derbyshire, provides specialist drilling and associated services to the oil, gas, gas storage, shale gas, coal bed methane, geothermal, mining, geoscience and water industries.
Speaking to The Parliamentary Review, director John Beswick discussed the benefits of the domestic shale gas sector and the need for an assured market and government support in order to allow it to thrive. Importantly, however, in Beswick’s view, if the suspension on shale gas is to be lifted, the regulatory regime surrounding extraction activity will then need to bee reviewed at government level in order to provide in incentive for other firms to extend their hand in the industry.
Beswick said: “The focus of shale gas as a potential source of cheaper gas in the UK could offer significant opportunities for us in our home market, but only if an assured market develops.
“The right support from government is also crucial. So far, the burdensome regulatory regime makes exploiting gas from shale unattractive, which, together with the failure by both industry and government to present a strong PR case, may prohibit significant exploration and development due to the high cost, even if exploitation is shown to be feasible.
“With a more positive outcome in the UK market, we could grow further in the shale gas business. This would help to channel the benefits to the UK economy by establishing local manufacturing facilities and workshops in shale gas areas and providing employment and training programmes for both younger and older workers."
Furthermore, Beswick believes that a thriving shale gas industry in the UK could generate further employment in the supply chain.
“Some of the drilling rig and associated components could be manufactured or assembled in the UK, given the right environment and local personnel, particularly the young unemployed. They could also be trained to crew the rigs and maintain the equipment, with very significant benefits to the local communities and the UK’s industrial future.”
The future of fracking in the UK and whether firms like PR Marriott Drilling can strengthen their hand in the field will depend heavily on whether such activity can be proven safe scientifically, but also on the impact of pressure from elsewhere to end it altogether.
The Green Party’s Jonathan Bartley called on the government to make an “absolute commitment” to end fracking prior to the election, while Jeremy Corbyn pushed the message as part of Labour’s failed election campaign that he’d seek to implement a permanent ban.
Besides tremors, other environmental impacts must also be taken into account, including the risks of carcinogenic chemicals escaping during extraction and contaminating groundwater.
Tony Bosworth, a campaigner from Friends of the Earth, believes that the focus on fracking is also taking emphasis away from pursuing renewable energy sources.
Bosworth said: "Shale gas is not the solution to the UK's energy challenges. We need a 21st Century energy revolution based on efficiency and renewables, not more fossil fuels that will add to climate change.”
The issue for businesses working in the sector is that they have to weigh up whether it is worth investing in the shale gas industry in the hope that science will one day rule in its favour. However, with two suspensions having entered force in the space of ten years, the sentiment may also begin to arise that fracking has little or no future on UK shores.
The current regulatory environment certainly renders it impractical for industry operators to attempt to continue. The eventual outcome of the suspension is one issue, but if it is to be lifted, whether the regulations surrounding the sector change is very much another.