LONDON (Alliance News) - IGas Energy PLC Thursday welcomed the UK government's comments that fracking in the country is a "national priority" and the announcement that fracking applications will be fast-tracked to prevent lengthy delays by local councils.
Fracking in the UK is at a pivotal moment, with more companies trying to capitalise on the Conservative government's eagerness to unveil a shale revolution in the country amid falling oil and gas production from the UK North Sea.
However, local councils have debated at length about recent applications made by the likes of Cuadrilla Resources in Lancashire causing delays, which then resulted in applications be rejected over concerns about traffic and the "industrialisation of the countryside".
The UK government has been trying to promote and "educate" the public about fracking, or hydraulic fracturing" in order to gain public support so it can progress its energy plans.
"There is huge potential right across the country for safe and sustainable use of shale gas, to provide a clean long term energy source and create British jobs and growth," said Communities Secreatry Greg Clark on Thursday.
Secretary for Energy and Climate Change Amber Rudd added: "To ensure we get this industry up and running we can?t have a planning system that sees applications dragged out for months, or even years on end."
"We now need, above all else, a system that delivers timely planning decisions and works effectively for local people and developers," she added.
To combat delays, the government has decided to takeover any fracking applications that "take months or even years" from local councils to limit uncertainty for those companies and the local communities.
The main benefit for fracking companies is that applications will now have to be deliberated on within a 16 week period, compared to the current unlimited timeframe that companies face.
Clark will be personally responsible for calling in any delayed applications and has the job of "identifying councils that repeatedly fail to determine oil and gas applications within the 16 week statutory timeframe requirement".
"Today?s measures will mean ministers will consider calling in any application for shale exploration, and will recover appeals on a case-by-case basis," the Department for energy and Climate Change said.
The government's timing is significant as later this month, the results of the first tranche of the 14th licensing round for onshore oil and gas licenses will be announced with the second tranche being released "later in the year".
The companies that have applied for onshore licenses under the licensing round have not been released, but a series of listed companies may have potentially applied for licenses as they either already have licenses in the UK or have shown an interest in fracking in the past.
Those include IGas and its subsidiary Dart Energy, Infrastrata PLC, Egdon Resources PLC, Enegi Oil PLC, Alkane Energy PLC and Celtique Energy which is not listed but works with numerous companies including Egdon, Europa Oil and Gas (Holdings) PLC and Union Jack Oil PLC on the Wressle-1 discovery.
In addition, the government said it wants to ensure local communities that do have fracking nearby benefit from any financial gain that companies enjoy and said it will be presenting proposals later in the year on the design of a new sovereign wealth fund, something which has previously been outlined by Chancellor George Osborne, who cited it could tie in to the "Northern Powerhouse".
IGas said it welcomed the decision on Thursday and said shale gas can "provide a real alternative to imports", create jobs and provide tax to the UK economy.
Last Friday, Minister of State for Energy and Climate Change Andrea Leadsom visited Igas' proposed site in Warrington, Cheshire, to see "what a potential hydraulic fracturing site would look like".
IGas shares were up 5.6% to 28.50 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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