The UK government yesterday confirmed its support for shale gas
exploration by launching a Gas Generation Strategy that will
incentivise investigations on the UK coastal shelf.
Cuadrilla are using silica sand proppant material,
supplied by Sibelco
measures to be launched next year, including an Office for
Unconventional Gas and Oil, a targeted tax regime for the shale gas industry is now under
consultation, the Chancellor of the Exchequer, George Osborne,
fracturing, or fracking, is the process used to extract natural
oil and gas, including shale gas, from the earth by pumping a
mixture of water, silica frac (frac sand) and chemicals
under high pressure into drilled wells.
unique tax breaks for the shale gas industry, the UK follows
other similar schemes in countries including Poland and Russia,
where government incentives have kick-started natural gas
an article published in IMs November
issue, written by Vasili Nicoletopoulos who owns Natural
Resources GP, there is no shale gas
production and no published estimate for unconventional
reserves in Russia, however, it is the largest natural gas
supplier in Europe.
government hopes to unlock what may be the worlds richest
shale gas plays in western Siberia by using tax incentives
to coax international companies to invest in the new
In Poland, the potential for shale gas and oil is seen as a
promising alternative to Russian energy imports.
A new tax was proposed on hydrocarbon production to ensure
that there is a fair return for Poland but without discouraging
investment from foreign companies who have the means and
knowledge to help take projects forward.
The countrys Finance Minister Mikolaj Budzanowski said
on 13 October that Poland will invest 50bn zlotys ($16bn) in
the exploration of shale gas by 2020.
exploration is also taking place in Hungary, which saw the
first major milestone of shale gas development in 2007 with a
joint venture between Hungarian gas and oil company MOL and
ExxonMobil to evaluate the unconventional potential of the
Makó and Békés basins.
incentive scheme in the UK will boost the unconventional gas
sector, it is also expected to increase the countrys
demand for proppant material, which is used in the fracking
There are two
main types proppant used in fracking frac sand and
ceramic proppants. Ceramic proppants are made up of sintered
(burnt) bauxite or kaolin.
Resources confirmed to IM that it will be
using silica sand proppant material, supplied by Cheshire-based
Sibelco. It remains to be seen, however, whether new fracking
players will enter the market and therefore increase proppant
Fracking in the UK
has been historically linked to the fracking process in the UK
after operations run by Cuadrilla, were put on hold last year
following two earth tremors.
Due to the
newly-announced government incentive scheme, it now appears
fracking activity could be up-and-running as early as next
successful UK shale gas industry has the potential to create
jobs and support UK energy security, benefiting the economy and
taxpayers, a government release stated.
welcome the government's initiative to help the emerging shale
gas industry get established," Francis Egan, Cuadrillas
CEO, told IM.
The Office for Unconventional Gas
and Oil is expected to join up responsibilities across
government and provide a single point of contact for investors
and streamline the regulatory process.
UK, our activities fully comply with one of the worlds
tightest regulatory systems for oil and gas, Egan told
welcome any initiative that streamlines decision-making
processes while ensuring that all shale gas extraction conforms
to the highest environmental and health and safety
standards, he added.
measures to encourage gas storage in the UK are expected to be
published in spring 2013.