Fracking Licence Clear Out: Preparation For Sell Off

Impending Onshore Licensing Round Could See Up To 60 Percent Of UK (Orange Area) Handed To Fracking Companies (Click To Enlarge)

The Official Journal of the European Union recently (20 June 2014) published a notice from the UK government (PDF) advertising the imminent start of the 14th Onshore (Landward) Oil and Gas Licensing Round. This is a necessary precondition (PDF) for the licensing round and while there is a pretense that no decisions have been made, the government is busy preparing to get it underway. In this licensing round the government intends to give away the rights to frack up to 60 percent of the UK.

A Marcellus Shale Drilling Site And Associated Waste Pits In Pennsylvania Where Over 6,000 Wells Have Already Been Drilled (Click To Enlarge)

In the last few months fracking companies in the UK have given up a significant number of so called Petroleum Exploration And Development Licences (PEDL). These licences include Cuadrilla’s PEDL 247 covering a large area around Crowborough in East Sussex, two of UK Methane’s licences in Somerset (PEDL 226 covering an area around Chew Magna and PEDL 228 covering an area to the south of Keynsham), Dart Energy’s PEDL 211 which covers the Mawr in South Wales and Dart Energy’s PEDL 161 north of Largo Bay in East Fife.

Other companies that have given up some licences include IGas Energy, Celtique Energie, Egdon Resources and Coastal Oil & Gas, as well a number of other onshore oil and gas companies, so far less associated with frcaking. In all at least 26 licences across the country have been relinquished since February (see table below for a full list). This represents a small fraction of the current 170 onshore oil and gas licences in the UK but this sudden rash of relinquishments is not an everyday occurrence.

Marcellus Shale Drilling Site In Close Proximity To Community Infrastructure In Pennsylvania (Click To Enlarge)

While this may seem like a cause for celebration, especially if you live in one of these licences, the reality is somewhat different. In many cases these companies have been forced to relinquish the licences because they have failed to comply with certain conditions associated with the licence: usually to drill one or more exploration wells within a certain time period. One of the main reasons for these failures to drill within the allotted time is likely to be the strength of the anti-fracking movement in the UK.

However, the timing of these relinquishments, in the run up to the 14th Onshore Licencing Round suggests there will be little respite for local communities. The government (DECC) is forcing these companies to hand back the licences so that it can hand them out to other companies. The licensing system is designed to maximise fossil fuel extraction and if companies sit on licenses without drilling, or aren’t aggressive enough in fighting community opposition, they are likely to lose them.

While the exact timing of the new licensing round is unclear, it could begin as soon as the end of this month, and will likely completed during the second half of this year. Many of these relinquished licences could then be re-licensed, if interest is not muted by the present intensity of anti-fracking resistance. Large additional areas of the country where there are no licences at present, will also be handed out to fracking companies. Now is the time for communities to get organised to resist this threat.

Table of onshore licences relinquished in the last few months