UK Plans to Move Goal Posts for Shale Drilling

The UK government plans to ease the rules for exploration companies drilling for shale oil and gas as well as sweetening the pill for communities affected by the drilling.  At the same time, however, the rules would weaken the hand of property owners living above shale reserves.

Among the proposals drafted for inclusion in the Queen's speech to Parliament last week, which set out the legislative program for the year, is a new notification system to ensure that local communities are "well informed" about any shale development in their area.

The government is also proposing that exploration companies pay an additional £20,000 to those living above horizontal underground pipes. This would be in addition the £100,000 per site already planned.

Exploration companies already have committed to giving to local communities 1% of revenues from any successful well.

The energy ministry's initiative is also aimed at changing the rules under which property owners can be expropriated for shale gas and oil drilling. Current laws of trespass require owners to give their permission but if the new legislation passes, they would have to cede right of way.

The shale gas industry, which has seen the trespass law as a major obstacle to exploration, applauded the planned change as well timed.

The proposals came on the heels of a long-awaited report by the British Geological Survey (BGS) on the potential of shale reserves in the Weald basin below Kent, Sussex, Surrey and Hampshire.

BGS found that there could be anywhere from 2.2 billion to 8.6 billion barrels of shale oil in the basin, but also warned that "is not known how much of this could be extracted."

Seeming to throw cold water on British expectations of a shale boom similar to that being seen in the US, the geological authority said there appears to be "no significant gas resource."