The UK’s leading shale gas company hopes to overturn a government moratorium on fracking by proving that it can be safe despite triggering earthquakes.
Cuadrilla has said it would provide the oil and gas regulator with new data to address the concerns of communities near active fracking sites so the suspension of its operations can be lifted.
The company said it would continue to make the case for fracking after a government U-turn last week sounded a potential death knell for the industry by halting fracking in England because of concerns about earthquakes.
Cuadrilla’s fracking has led to a number of tremors near its Preston New Road site in Lancashire, including a 2.9-magnitude quake in August.
It was forced to stop work at the site just weeks before the licence was due to expire at the end of this month, and will not be allowed to apply for an extension.
Fracking, or hydraulic fracturing, is a way of extracting natural gas from shale rock formations that are often deep underground. It involves pumping water, chemicals and usually sand underground at high pressure to fracture shale – hence the name – and release the gas trapped within to be collected back at the surface.
The technology has transformed the US energy landscape in the last decade, owing to the combination of high-volume fracking – 1.5m gallons of water per well, on average – and the relatively modern ability to drill horizontally into shale after a vertical well has been drilled.
In England, the government placed a moratorium on fracking in November 2019 after protests, legal challenges and planning rejections. A year earlier, the energy company Cuadrilla was forced to stop work at its Preston New Road site in Lancashire twice in four days due to minor earthquakes occurring while it was fracking. The tremors breached a seismic threshold imposed after fracking caused minor earthquakes at a nearby Cuadrilla site in 2011. In March 2019 the high court ruled that the government's fracking guidelines were unlawful because they had failed to sufficiently consider scientific evidence against fracking.
The government said ministers would not approve any new fracking permits after a report found that it was impossible to accurately predict the severity of any future seismic activity.
The business and energy secretary, Andrea Leadsom, said the moratorium was based on current scientific information, and that it would remain in place “until compelling new evidence is provided” to allay concerns.
The Labour leader, Jeremy Corbyn, described the decision as an election stunt. “I think it sounds like fracking would come back on 13 December if they were elected back into office,” he said on Saturday.
Cuadrilla said it would review the report in detail, and would work with the Oil and Gas Authority so that its Bowland Shale reserves could be appraised and developed. The company is understood to have spent about £200m trying to lead a British shale gas revolution to rival the US, but has yet to produce any commercial gas.
Its work in Lancashire has been slowed by tough government safety regulation which forces workers to down tools if the fracking causes tremorsgreater than magnitude 0.5.
The process of extracting gas from shale formations beneath the earth’s surface by hydraulic fracturing involves pumping in a mix of chemicals and sand to break up the rock and release the gas.
Green groups welcomed the decision to halt fracking as a “victory for common sense”, based on their concerns that it could contaminate underground water sources and will contribute to global heating.
It is a blow to companies including the chemicals giant Ineos, which have spent hundreds of millions of pounds developing fracking sites with capital from their investors.
Cuadrilla is owned by AJ Lucas, an Australian energy services group, and the private equity group Riverstone Holdings. It also has the backing of Centrica, the owner of British Gas, which has ploughed about £60m into the business in recent years.
A spokesman for Centrica said: “It was logical to examine the UK’s indigenous gas resource to understand the potential before decisions about what should be done with that resource. However, we respect the decision and recognise that how onshore exploration is regulated is very important.”
Phil Arnall, the chairman of AJ Lucas, said it would continue to give its full support to Cuadrilla despite the “disappointing” government decision because “the size of the prize is clear”.
He said fracking would offer “benefits to the economy and the environment” because “domestically produced shale gas has a far lower carbon footprint compared to imported gas”.
Ineos, which is owned by the billionaire Sir Jim Ratcliffe, declined to comment on the moratorium. It is the second major blow to the company’s shale gas ambitions, after Holyrood banned fracking in Scotland in October 2017.
The ban triggered a fierce response from Ineos which took the Scottish government to court over what it claimed was an unlawful decision that would cost the country thousands of jobs.
