In the latest round of new fracking licences awarded to onshore gas and oil exploration in England, licences were awarded in 159 blocks to Aurora Energy, Cuadrilla, GDF Suez, Hutton Energy, Ineos, and UK Oil & Gas. What does this mean for the cost of energy in the UK?
Andy Samuel, The Oil and Gas Authority chief executive, said:
“I am pleased that the 14th onshore round attracted strong interest and a high quality of proposed work programmes. This round enables a significant amount of the UK’s shale prospects to be taken forward to be explored and tested.
“Upon acceptance of these offers, applicants will be issued with licences and will be able to begin planning their future strategies for exploration activities. These will be subject to further local planning, safety, environmental and other authorisations.”
Will these new fracking licences reduce the cost of gas in the UK?
Historically, the UK has drawn on the resources of the North Sea to fulfil our oil and gas needs. This has comfortably provided enough to provide for every home and business in the UK, meaning we were completely energy independent. However, this has now changed, and as North Sea resources fall, the UK has had to look overseas for resources, which means purchasing these commodities from other countries. We are now energy dependent, as Ken Cronin, chief executive of United Kingdom Onshore Oil and Gas, explains:
“Today we are dependent for nearly 50% of our oil and gas from overseas and that is going to rise to over 75% in the next 15 years without further onshore production,”
The steady increases in the amount of oil and gas imported to the UK has had significant influence on the price we pay for our energy. The hope, of course, is that by harvesting the shale gas from under our feet, we can return to becoming more energy independent again as a nation, and thus reducing the cost.
A warning though, from across the pond: Shale gas in the US saw a dramatic fall in domestic prices, but many fracking companies are now in difficulty as the fall in oil prices has left them with large debts.
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