UK lifts moratorium on shale gas exploration, pressured by supply shock

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Amid the prospect of a worsening energy crisis that rocks Europe due to the shortfall in gas supplies from Russia, the UK government today formally lifted the moratorium on shale gas production in England, which had remained in place since 2019.

At the same time, it confirmed its support for a new oil and gas licensing round, expected to be launched by the North Sea Transitional Authority (NSTA) in early October.

According to the British government, the two measures are aimed at strengthening the country’s energy security. To this end, it believes it is appropriate to seek all means to increase UK oil and gas production, including through new oil and gas licenses and shale gas extraction.

According to the Secretary of Business and Energy, Jacob Rees-Mogg, in the current situation, strengthening energy security is an absolute priority. “As the prime minister (Liz Truss) said, let’s ensure that the UK is a net energy exporter by 2040,” he said.

Under the new round of permits, the NSTA is expected to make a number of new production blocks available on the UK continental shelf. These licenses will allow developers to seek commercially viable oil and gas sources within their areas of their licenses.

Investors will need to seek regulatory approval for any activities carried out within their licensed area, such as drilling or infrastructure construction.

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seismic events

Regarding the stimulation of hydraulic fracturing for shale gas, the government informed that it will consider future requests, but also foresees the need to obtain licenses and permits for the start of operations.

The decision is immersed in a great environmental controversy. The moratorium on shale exploration was imposed in 2019, following the record the previous year of seismic events in the Lancashire region during drilling carried out by the British company Cuadrilla.

Rees-Mogg said only 3 test wells have been hydraulically fractured in the UK so far and that more drilling sites are needed to collect more concrete data and improve the evidence base on potential risks.

“Lifting the pause on shale gas extraction will allow drilling to collect this additional data, building an understanding of the UK’s shale gas resources and how we can safely carry out the extraction,” he said.