Slow shale development could cause UK to lose energy-intensive industries such as petrochemicals

08-May-14

Britain could lose energy-intensive industries such as petrochemicals to regions with lower energy costs such as the United States and Middle East if it does not speed up shale gas extraction, as per the House of Lords Economic Affairs Committee report, as per Reuters. The report revealed UK’s competitive disadvantage in comparison with peers in other parts of the world who pay a third less for their energy use. Britain is in the early stages of extracting shale gas resources to lower its dependence on energy imports, and the government has promised favourable tax terms to companies looking for the unconventional gas. Progress has been slow, however, due to public opposition to hydraulic fracturing - the process of injecting water and chemicals at high pressure into underground rock formations to push out gas - and stringent environmental regulation. Critics say fracking can pollute water supplies and trigger small earthquakes. Advocates say it has a strong safety record and point to countries like the United States, where fracking has driven down energy prices and put them on the path to energy independence. The House of Lords committee recommended the government should amend existing legislation to speed up subsurface drilling for shale gas. Under current law, landowners need to give permission for companies to drill below their land although they do not own rights to the minerals their land contains. This has slowed down shale gas planning and the government said it was already considering how to address this issue. Environmental group Greenpeace says shale gas fracking pollutes groundwater and condemned the committee's report.