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UPDATE 1-Britain awards more shale gas licences
December 17, 2015 / 1:15 PM / in 2 years

UPDATE 1-Britain awards more shale gas licences

* Britain awards total of 159 new onshore oil, gas licences

* IGas, Egdon Resources, Cuadrilla among licence winners

* INEOS says is now UK’s largest shale gas developer by acreage (Updates throughout)

By Karolin Schaps

LONDON, Dec 17 (Reuters) - Britain awarded another 132 new onshore oil and gas exploration licences on Thursday, giving developers access to more land for shale gas fracking for the first time in seven years.

Britain is estimated to have substantial amounts of gas trapped in underground shale rocks and Prime Minister David Cameron has pledged to go “all out” to extract these reserves, to help offset declining North Sea oil and gas output, despite opposition from environmental campaigners.

Many other European countries, including France and Germany, have banned the use of shale gas hydraulic fracturing, or fracking, due to environmental concerns.

The latest awards conclude Britain’s first onshore oil and gas licensing round in seven years. Overall, it awarded 159 licences and 75 percent of the blocks covered were related to shale gas or oil, the government said.

Companies which obtained new licences include established shale gas companies IGas, Egdon Resources, Cuadrilla Resources and INEOS. The latter won 21 new licences which it said now made it Britain’s biggest shale gas by acreage.

“We currently import around half of our gas needs, but by 2030 that could be as high as 75 percent,” said British Energy Minister Andrea Leadsome in a written statement to parliament.

“That’s why we’re encouraging investment in our shale gas exploration so we can add new sources of home-grown supply to our real diversity of imports.”

Britain on Thursday also said it will cut subsidies to renewable energy projects less than a week after a global climate change agreement was struck to wipe out carbon emissions this century.

So far, shale gas fracking in its modern form has only taken place at one site in northeastern England. Local planning approvals for new projects have been slow because of concerns by residents about environmental, noise and visual impact.

“The real challenge companies face is obtaining planning permission from local planning authorities, as the refusal of Cuadrilla’s applications in June demonstrated,” said Catherine Howard, a planning partner law firm Herbert Smith Freehills.

Cuadrilla was refused planning permission for two shale gas projects earlier this year but the government has since announced it would use new powers to make its own decision on the matter.

On Wednesday, lawmakers voted in favour of the use of fracking to extract shale gas under national parks, weakening a decision against fracking in national parks made earlier this year and giving shale gas explorers access to more resources. (Additional reporting by Nina Chestney and William James; editing by Jason Neely and William Hardy)

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