LONDON – The ruling Conservative Party is lining up investors to kick-start fracking across swathes of rural Britain and challenge opposition from the village halls and country estates in its political heartland.
Britain got 95 bids for onshore oil and gas licenses this year, after 60 in the last round in 2008, Energy Minister Matthew Hancock said. Celtique Energie, Ineos Group and IGas Energy were among bidders, as interest in hydraulic fracturing grows even after protests stalled earlier projects.
That's testament to the Conservative-led coalition's drive to emulate a U.S. shale gas boom that profited producers, cut energy bills and created scores of overnight millionaires.
Britain offers tax breaks to explorers and plans to change laws on trespass to allow drilling under land without owners' consent. Chancellor of the Exchequer George Osborne says he's proposing the world's most generous tax system for shale.
"There's clearly a large amount of interest in license applications despite some of the negative press coverage, local opposition campaigns and environmental concerns," said Caroline May, a lawyer at Norton Rose Fulbright in London who has advised U.S. operators seeking to enter the British market. "There is a determination to see shale gas succeed."
In the affluent village of Fernhurst, nestled in West Sussex's rolling green hills 40 miles southwest of London, 70-year-old Aphra Peard is having none of it.
"It's terribly dangerous," Peard said in the village community center, where she was finishing off a woolly hat with her knitting group. "If they're successful, there'll be a well every 2 miles. Every well needs 4 acres of heavy industry with traffic going backwards and forwards." The trucks threaten houses in the village like hers built 350 years ago, she said.
The local South Downs National Park Authority declined an application by London-based Celtique, which won a British license in an earlier bidding round, to drill at a site at Fernhurst after receiving about 5,000 objections to its plans.
Michael Pearson, the fourth Viscount Cowdray, whose estate hosts the competition for polo's most coveted trophy, is among opponents. Pearson, a Buddhist whose great grandfather struck oil in Mexico in the 19th century, has obtained a preservation order for ancient oak trees lining the access road.
Even the area's Conservative lawmaker, Andrew Tyrie, wrote to the national park planning officer to voice locals' concerns.
Celtique, which partnered with Magellan Petroleum Corp. of the United States, on Tuesday said it was considering its options for Fernhurst, after the company filed an appeal over a rejected application in the nearby settlement of Wisborough Green.
"While the government takes seemingly positive steps in support of the shale-gas concept such as the trespass law, the reality is the onus is on the explorers to go out and show the public that it technically works and is safe," Mark Wilson, an oil analyst at Jefferies Group in London, said by phone.
High population density in Britain relative to the U.S. and the lack of the mineral rights laws that enriched American landowners make it harder to win over local communities.
Cuadrilla Resources, faced with protests over plans to drill at Roseacre village and Preston New Road in England's northwest, is considering ways to curb trucks coming into its project. It is studying recycling waste water on site, as well as seeking permission to use alternative routes.
The government sees such efforts and its argument that the United Kingdom needs to secure low-cost energy supplies winning the day.
"I am not prepared to pass up a once-in-a-generation economic opportunity," Hancock, a Conservative lawmaker, said as he opened the National College for Onshore Oil and Gas on Friday. "Shale gas is an enormous opportunity for the U.K. and one that we simply can't afford to miss out on."
