UK Government To Announce Onshore Oil & Gas Licensing Round Results

LONDON (Alliance News) - The UK government is set to announce the results of the first tranche of the 14th licensing round for onshore oil and gas licenses in the country, raising the fears of anti-fracking campaigners that the new Conservative majority government will open the door for companies to exploit the country's shale reserves.

The 14th landward licensing round opened in July 2014 and the results will be in two tranches, the first of which will be announced in August and the second tranche "later in the year".

The first tranche will be for those licence blocks that have been screened out as not requiring further environmental assessment under the Conservation of Habitats and Species Regulations 2010. A consultation for the second tranche will be held in August.

When it launched the licensing round in 2014, the Coalition government at the time said: "It is important to note that this Coalition government recognises there are areas of outstanding landscape and scenic beauty where the environmental and heritage qualities need to be carefully balanced against the benefits of oil and gas from unconventional hydrocarbons."

"In considering applications for unconventional hydrocarbon development in National Parks, the Broads and Areas of Outstanding Natural Beauty, mineral planning authorities should give great weight to conserving their landscape and scenic beauty," it added.

The government went on to say at the time that any "major development" applications in those areas should be refused "except in exceptional circumstances" and also said World Heritage Sites were of the "highest significance".

However, it also said mineral planning authorities should take account of government energy policy, which "makes it clear that energy supplies should come from a variety of sources", including onshore oil and gas.

Since the Conservatives won the General Election in May with an outright majority, the government has made it clear that it is in support of fracking. Most notably, it has said that fracking would be allowed to happen underneath those areas of interest as long as the wells are not drilled on the surface.

That means companies could drill into the ground on the borders of National Parks for example, before drilling vertically underneath to extract gas.

The licensing round is significant, mainly due to the sheer size and number of blocks on offer, with hundreds available that stretch between the south coast of England, including the whole of the Isle of Man, to as north as Scotland.

To put the amount of blocks into perspective, the Express newspaper cited eco-charity Friends of the Earth on Sunday claiming that up to 43% of Britain's land mass is covered by the blocks on offer under the licensing round, and according to The Guardian around 40% of the blocks on offer cover protected areas.

At the moment, two companies are in the spotlight and leading the charge over fracking in the UK. Cuadrilla Resources has launched an appeal after two applications to frack in Lancashire were rejected by local authorities, which it is likely to win, and Third Energy have an application to frack in Yorkshire, where it has already drilled one well.

Yorkshire is already in the spotlight after the North York Moors National Park in Yorkshire gave the green light for Sirius Minerals PLC to build the world's largest potash mine in the national park, a sore point for environmentalists.

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.

AIM-listed company IGas Energy PLC is currently working on a five-year plan to develop shale gas sites in the North West and East Midlands, just south of Cuadrilla's sites, alongside major international partners Total, GDF Suez and INEOS.

Frack Off, a grassroots direct action campaign aimed at stopping the extraction of unconventional resources in the UK, lists a number of listed companies as interested or engaged in fracking within the UK. Whether or not they intend to apply for licenses to frack or not, these companies are the most likely to be active in the licensing round.

They include Dart Energy, which is a subsidiary of IGas, 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.

Also, there has been previous mentions in the media that the companies involved in the much-highlighted Horse Hill discovery near Gatwick airport may consider fracking the site. Those companies involved comprise UK Oil and Gas Investments PLC, Doriemus PLC, Stellar Resources PLC, Solo Oil PLC, Alba Mineral Resources PLC and Evocutis PLC.

Cluff Natural Resources PLC and Europa also are listed by Frack Off as companies interested in underground coal gasification, which extracts gas from old coal deposits using a similar technique to fracking.

On Monday, the results of the the 28th Seaward Licensing Round were released, which focuses on offshore licenses in the North Sea. So far, only one listed company has said it has been awarded a license after Europa Oil and Gas (Holdings) PLC on Tuesday said it has been conditionally awarded a promote license over block 41/24 in the southern North Sea.

By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance

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