(Alliance News) - IGas Energy PLC on Friday said it was "shocked and disappointed" by the UK government's decision to declare another moratorium on fracking in England, and warned it may pursue legal action in light of losses it has incurred.
In a written ministerial statement on Thursday, Grant Shapps, the latest secretary of state for the UK Department of Business, Energy & Industrial Strategy, confirmed the government is taking a "presumption against" the issue of any more hydraulic fracking consents.
"This position, an effective moratorium, will be maintained until compelling new evidence is provided which addresses the concerns around the prediction and management of induced seismicity," Shapps said.
IGas shares were down 1.1% to 27.40 pence in London on Friday morning. The stock had slumped 27% on Wednesday, in light of the fracking news.
"Literally a few weeks ago this government lifted the moratorium paving the way for the timely development of shale in the UK providing jobs, tax revenue, energy security and significant community benefits in the middle of an energy crisis - all totally compatible with net zero," IGas said.
Under Liz Truss's premiership, the ban on fracking was lifted in late September, as Truss sought to shore up UK energy security, citing the Russian war in Ukraine.
IGas contends it has significant recoverable gas resource in the Gainsborough Trough in the East Midlands.
It estimates there are 630 billion cubic feet of gas in place per square mile, "following interpretation of the cores taken across the 500 metre Shale horizon at Springs Road". When extrapolated out to its whole acreage in the East Midlands, it said this would be the equivalent of around 270 trillion feet of "high quality" natural gas.
"At expected recovery rates, this would equate to satisfying up to 19 years of the UK's gas demand giving this country both energy security for years to come as well as providing billions of pounds of investment into the East Midlands and the creation of thousands of skilled jobs," IGas contended.
Explaining the rationale behind the moratorium, Shapps noted uncertainty around the occurrence of large earthquakes.
"Having listened to local communities and assessed the state of the science, we ruled out changes to the planning system... We will not support shale extraction unless the science shows categorically that it can be done safely," Shapps said.
IGas maintains that fracking for shale gas "can and will" be done in a safe and environmentally responsible way.
Alongside its partners and investors, the firm said it has invested "significant sums" to develop shale gas before the 2019 moratorium and during the developments in recent weeks.
"In light of the government's totally unwarranted U-turn and, in the interest of our shareholders, we reserve the right to pursue any legal process available to us to recover the losses that we have incurred," the firm warned.
By Elizabeth Winter; elizabethwinter@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
