The Business and Energy Minister Matthew Hancock MP and Communities Minister Lord Ahmad of Wimbledon have today (28 July) launched the bidding process for onshore oil and gas exploration licences, including those for shale gas.

Alongside conventional onshore oil and gas exploration and development, the licensing round covers exploration and development of tight gas, coalbed methane, mine vent gas, oil shale and shale gas.

The latter technique involves pumping water, chemicals and sand into rock beds to artificially induce fractures through which natural gas can flow.

If granted, the licences will provide businesses with the first step to starting drilling – but do not give absolute agreement to drill.

On top of a licence, any further drilling application will then require planning permission, as well as permits from the Environment Agency and sign-off from the Health and Safety Executive.

Exploring Areas of Outstanding Natural Beauty

Controversially, the licenses do allow for unconventional hydrocarbon exploration in Areas of Outstanding Natural Beauty, World Heritage Sites and National Parks (despite ‘strong support’ for the exclusion from licensing of environmentally sensitive sites), but these will be subject to additional planning guidance, details of which have also been released today.

The Department of Energy and Climate Change (DECC), has said that these areas will also require detailed Statements of Environmental Awareness that ‘demonstrate applicants’ understanding of the environmental sensitivities relevant to the area proposed’. It added that unless the department was ‘satisfied’ with the statement, the application would be rejected.

Further to this, Communities Secretary Eric Pickles is expected to give ‘particular consideration’ to recovering planning appeals arising from these types of developments for ‘at least the next 12 months’.

Lord Ahmad said: “We recognise there are areas of outstanding landscape and scenic beauty where the environmental and heritage qualities need to be carefully balanced against the benefits of oil and gas from unconventional hydrocarbons.

“For this reason, I am today making clear our approach to planning for unconventional hydrocarbons in National Parks, the Broads, Areas of Outstanding Natural Beauty and World Heritage Sites. Proposals for such development must recognise the importance of these sites.”

‘A key part of the UK’s answer to climate change’

The licensing round forms part of the Coalition Government’s wish to “put Britain at the forefront of exploiting shale gas", as it believes that the fossil fuel has the potential to provide the UK with greater energy security, growth and jobs.

Alongside the launch of the licensing round, the DECC has also published guidance on how companies should complete their applications to secure a license.

Matthew Hancock MP said: “Unlocking shale gas in Britain has the potential to provide us with greater energy security, jobs and growth. We must act carefully, minimising risks, to explore how much of our large resource can be recovered to give the UK a new home-grown source of energy. As one of the cleanest fossil fuels, shale gas can be a key part of the UK’s answer to climate change and a bridge to a much greener future.

“The new guidance published today will protect Britain’s great national parks and outstanding landscapes. Building on the existing rules that ensure operational best practices are implemented and robustly enforced. Ultimately, done right, speeding up shale will mean more jobs and opportunities for people and help ensure long-term economic and energy security for our country.”

Shale gas controversy

The process of extracting shale gas from the earth through hydraulic fracturing, also known as fracking, has become deeply controversial, as opponents have listed a number of environmental and safety concerns resulting from the process.

Environmentalists have warned that shale gas exploration could prolong the country’s reliance on fossil fuels, contribute to climate change, cause air pollution, contaminate drinking supplies with methane and toxic chemicals, and trigger earthquakes. (Protests reached fever pitch last year, when a sit-in held at energy firm Cuadrilla’s Balcombe site led to the arrest of Green MP for Brighton Pavillion and former leader of the Green Party, Caroline Lucas.)

Indeed, preparations for this onshore licensing round were delayed in 2011 when two seismic tremors were triggered in April and May of 2011 by fracking operations at Preese Hall in Lancashire.

‘Fracking is not the answer to our energy problems’

Speaking after the licensing announcement today, Tony Bosworth, the Energy Campaigner for environmental campaigning body Friends of the Earth, said: “By protecting national parks and other special places, ministers accept that fracking risks impacts [sic] on the local environment – this safeguard should be offered to communities too.

“The government’s desperate obsession with shale gas will continue to send shock waves across the UK, with millions of people now facing the prospect of fracking on their doorstep.

“The benefits of UK shale gas have been seriously over-blown, and most experts agree that it won’t cut fuel bills…Fracking is not the answer to our energy problems. If we want to boost energy security, tackle rising fuel prices and cut carbon we should be investing in efficiency and renewable power.”

However, supporters of shale gas exploration, including the present government, point to the transformative effect exploration can have for energy security, using the US as an example of the potential benefits and proponents argue that, if carefully regulated, fracking can be done safely. (Comparisons with the US have been criticised however, as there remain many differences to the context of drilling between UK and US.)

Read more about the licensing announcement, the issues of fracking, and Remsol MD Lee Petts’s response to concerns about water treatment needed for fracking.