UK to set up office for unconventional gas, oil

UK Chancellor George Osborne and Energy Sec. Ed Davey emphasized the need for new natural gas supplies, saying the government plans to establish an Office for Unconventional Gas and Oil.

The announcement came as Osborne released the Autumn Statement, and he said the UK Treasury will review possible tax incentives for companies seeking to develop shale gas.

The unconventional office will be established to bring together responsibilities from across government agencies and provide a single point of contact, officials said, adding any shale gas production will have to meet “high standards of safety and environmental protection.”

Davey is expected soon to lift a moratorium imposed after investigators found a high probability that hydraulic fracturing contributed to minor earthquakes last year.

The fracing was done by Cuadrilla Resources Ltd. Researchers said the events resulted from a rare combination of geological conditions around a gas well near Poulton-le-Fylde (OGJ Online, Nov. 3, 2011).

The well was in a Bowland basin shale, which Cuadrilla has said might hold 200 tcf of natural gas in place in its 437-sq-mile license area between Blackpool and Preston (OGJ Online, Sept. 22, 2011).

None of the seismic events caused structural damage. The largest event, in April 2011, had a magnitude of 2.3.

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