Newsnet Scotland: Unconventional Gas - Who are Dart Energy and is fracking on its way here?
Chancellor George Osborne, in his Autumn Statement, announced the establishment of a single dedicated office for the unconventional gas industry. It is hoped the office will ensure a “simplified and streamlined” regulation process.
Plans to introduce tax rebates to encourage excavation of unconventional gas were also announced.
The Chancellor is keen for the UK to follow the example of the USA where the price of gas has dropped by some 87%. The British Geological Survey estimates that there is significantly more gas in the form of shale gas and coalbed methane in the ground than in the North Sea. Mr Osborne believes that the unconventional gas industry will secure the UK's energy supplies into the future and slash energy prices.
Opponents point out that European countries have tougher environmental regulation than in the USA and this will push up the costs of production. The USA 2005 Energy Policy Act gave specific exemption, for fracking, from the underground injection control provisions in the Safe Drinking Water Act.
In common parlance this is called the 'Halliburton Loophole' as Dick Cheney was running Halliburton at the time that they lobbied for the exemption. Later as Vice President, he went on to include it in the energy plan that he produced for the Bush administration.
Exemptions to the Clean Air Act have also been granted. Environmentalists point out that there are more paid oil and gas industry lobbyists in the USA than there are members of congress.
Estimates produced by the Deutsche Bank put the cost of producing unconventional gas in Europe significantly higher than in the USA. Gas is currently produced at less than $5 per unit in the USA, they estimate a figure of $8 per unit in the UK and $11 per unit in Ireland.
Some sites in Scotland have already been earmarked for development of coal bed methane extraction with the one at Letham Moss in Airth having the potential to stretch from Stirling to Linlithgow and into Fife. The company involved, Dart Energy International, has applied for permission to sink 14 new wells in the area but it is thought that they have big ambitions for their Airth field. A raft of new licenses covering most of Central Region will be up for grabs in the new year.