Referenced Stocks

Report gives green light to UK fracking operations as shale reserve estimates skyrocket

By Doug Sweeney,  April 18, 2012, 11:00:46 AM EDT

In a move that might not please people eagerly anticipating the arrival of Earth Day, an independent report recommended that hydraulic fracturing could resume in the U.K.

Hydraulic fracturing - more widely known as fracking - was temporarily banned in the country after a company's operations caused two minor earthquakes. However, it looks like fracking might resume in the country shortly following the report commissioned by the U.K.'s Department of Energy and Climate Change that found operations should be allowed to recommence provided that "robust" precautionary measures are taken.

"The risk of seismic activity associated with hydraulic fracking operations is small, and the probability of damage is extremely small. We suggest fracking can continue under our recommendations," report author Brian Baptie of the British Geological Society said at a briefing.

Last April, fracking operations conducted by Cuadrilla Resources Ltd. allegedly caused a tremor measuring 2.3 on the Richter scale. The following month another one - recorded at 1.5 - was observed. The report recommended that a quake of 0.5 be the threshold level for when operations should be halted. Such a tremor would be significantly below the level that would cause surface damage.

Over the course of the coming weeks the U.K.'s energy ministry will be accepting public comment on the report and then it will determine the future of shale gas exploration in the country.

The ministry's decision on fracking operations will be significant as the industry could prove to be a major boon for the U.K.'s energy needs.

Reuters reports that estimates of onshore shale gas reserves in the country are 200 trillion cubic feet, but that figure pales in comparison to recent estimates that offshore reserves could total 1 quadrillion cubic feet.

"There will be a lot more offshore shale gas and oil resources than onshore," Nigel Smith, a subsurface geologist and geophysicist with the British Geological Survey ( BGS ), told Reuters. Smith added that offshore reserves could actually be 10 times the size of onshore ones.

The U.K. has a substantial history with developing offshore conventional gas in the North Sea, so Smith believes the country is well positioned to develop potential unconventional gas reserves.

The increased shale estimates in the U.K. come shortly after Poland - which was once viewed as Europe's potential shale gas powerhouse - saw estimates of its reserves vastly downgraded.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: News Headlines, Commodities, International

Referenced Stocks: BGS



Latest News Video






Most Active by Volume:

Company Last Sale Change Net / %
S $ 7.10 0.22  3.01%
PFE $ 29.665 0.27  0.90%
MU $ 13.785 0.04  0.25%
BAC $ 13.27 unch
SIRI $ 3.455 0.06  1.62%
BBRY $ 14.15 0.69  4.65%
NWSAV $ 15.66 unch
WY $ 27.70 0.54  1.91%