The Office of Unconventional Gas and Oil

Duarte Figueira

South Downs NPA – 15 October 2013

Office for Unconventional Gas and Oil

• OUGO’s objectives

• Gas in our energy mix

• The potential benefits of

UK shale

• Regulating shale robustly

• Emissions from UK shale

• Public engagement

• Conclusions

Presentation structure

The role of gas in the UK

Energy security

In May, the Institute of Directors produced a

report based on available evidence. They

concluded:

• Shale gas production could potentially peak

at around 32 billion cubic metres per year

• Production of shale gas is likely to decrease

the use of imported gas

• The industry could support around 70,000

jobs.

• Production would provide a net benefit to the

Treasury.

Potential contribution of shale gas to

the UK – one scenario

Existing licences & SEA areas

In 2012 the Royal Academy of Engineering and the

Royal Society conducted an independent review of

the scientific and engineering evidence on the risks

associated with hydraulic fracturing for shale gas.

They concluded that:

• the risks can be managed effectively in the UK, if

operational best practices are implemented and

enforced through regulation.

A number of recommendations were made on the

safety of hydraulic fracturing in the UK, and have

been accepted in full by Government.

Royal Academy of Engineering / Royal

Society Report

The Regulatory Process - Exploration

DECC: online

application for

well consent.

DECC checks

with

HSE/EA/SEPA

before issuing

Consent.

EA/SEPA

Statutory

Consultee

DECC: award of exclusive licence after open

competition

Local Authority

Planning Permission

(with public consultation)

HSE

Notification

EA/SEPA • Notices, mining waste permits

• Abstraction licences

• Discharge and radioactive

substance permits

Exploration

Well

Seismic - Traffic light monitoring

system

• Shale gas exploration and production in the UK

should be accompanied by careful monitoring

and inspection of GHG emissions relating to all

aspects of exploration, pre-production and

production, at least until any particular production

technique is well understood and documented in

the context of UK usage.

• Operators should monitor their sites to: (1) ensure

early warning of unexpected leakages; and (2)

obtain emissions estimates for regulators and

government.

• Shale gas production in the UK should be

accompanied by research into development of

more effective extraction techniques, which

minimise wider environmental impacts including

whole-life-cycle GHG emissions.

Key recommendations of the Mackay

Stone Report

The shale industry has published its Community

Engagement Charter. This includes commitments to:

• engage early at each stage and in advance of

any planning application

• At exploration stage, £100,000 in community

benefits per well-site where fracking takes place

• 1% of revenues at production stage

• publish evidence each year of how these

commitments have been met

• regularly review the Charter as the industry

develops, and operators will consult further with

communities.

Engaging Communities

Conclusions

• Gas provides a bridge to a low-carbon future and will have a role

to 2050 and beyond

• UK shale gas will improve energy security, support economic

growth, job creation and tax revenues

• UK shale gas is subject to robust regulation

• Greenhouse gas emissions from UK shale will be relatively

small

• OUGO will co-ordinate work across Government to support

exploration – and inform the public

• Industry needs to engage early with local communities.

Thanks for listening

Duarte Figueira | Head - Office of Unconventional Gas and Oil

Department of Energy and Climate Change | 3 Whitehall Place | London

SW1A 2AW