Spin is beating science in the debate over unconventional oil and gas in Scotland, according to the boss of a leading engineering firm.
Keith Cochrane, chief executive of Weir Group, said he fears the country will be left behind if it does not take advantage of shale gas opportunities.
The Scottish Government has announced a moratorium on granting planning consents for hydraulic fracturing or “fracking” - the method by which the gas is extracted.
It will be in place while a full public consultation is carried out alongside further research into the technique to look at planning, environmental regulation and the impact on public health.
While US drilling on land has fallen along with the price of crude, the risky and expensive drive to pull oil from the depths of the Gulf of Mexico is showing little evidence of a slowdown.
Oil rigs working in the Gulf will increase by more than 30% this year compared with 2014, according to data from Wood Mackenzie, an industry consultant.
At the same time, the number of land-based rigs has fallen by a third since October, bearing the brunt of industry-wide cutbacks that have shed tens of thousands of jobs in the US.
Scotland’s future will be “poor and cold” unless it takes steps to replace the offshore oil industry with onshore shale gas fracking, an expert has claimed.
Economist Gordon Hughes, an Edinburgh University professor and former World Bank advisor, suggested that efforts to tackle social injustice in Scotland will be put at risk unless the controversial energy resource is developed.
At the same event yesterday, a boss at the giant Grangemouth petrochemicals plant warned that its future would be plunged into fresh doubt without a local shale gas industry.
Scotland’s largest petrochemical plant at Grangemouth is unlikely to have a long-term future unless an indigenous shale gas industry can be developed, according to the firm that owns it.
Chemicals giant Ineos proposes using shale gas as a raw material for its chemicals plants, and has revealed plans to put millions into exploration.
But developing the industry could be stalled or even prevented after the Scottish Government announced a moratorium on granting planning consents for hydraulic fracturing, or “fracking” - the means of extracting the gas.
The Government has been accused of watering down rules preventing fracking in protected areas.
Ministers accepted Labour moves to tighten fracking regulations in the Infrastructure Bill by imposing a number of conditions, including banning the process from protected areas such as national parks and groundwater protection zones which feed aquifers.
But campaigners warned the Government’s new amendment to the Bill, which is now being considered by the Lords, has weakened the rules by allowing ministers to define what counts as protected groundwater source areas and other protected areas.
The new amendment also removed the rule preventing drilling underneath protected areas, environmentalists said.
The UK should continue to look for onshore unconventional gas supplies to meet the country’s future energy demand, according to an oil and gas industry body.
Fossil fuels account for around two-thirds of the UK’s energy consumption, particularly in homes and transport, and domestic production must continue to avoid future reliance on costly imports, according to Oil & Gas UK.
The boom in unconventional gas released through “fracking” in the US has driven down oil prices and plunged the UK North Sea oil sector into crisis, prompting city leaders in Aberdeen to hold an emergency summit of politicians, industry representatives and unions today.
Lancashire County Council has deferred a decision on an application to explore for shale gas for a further eight weeks.
Councillors met today, a week after planning officers recommended the sites be refused planning permission due to noise and traffic.
A leaked letter has revealed the Government’s behind-the-scenes efforts to get fracking off the ground as MPs call for a moratorium on the controversial process.
The letter from Chancellor George Osborne, written last year, called on Cabinet colleagues to “make it a personal priority” to implement measures to help boost the shale industry.
He called for rapid progress on developing three or four “exemplar drilling sites” to prove the concept of safe shale gas exploration, contingency plans if Lancashire County Council turns down planning applications and a strategy to push fracking to the public.
A moratorium on fracking is needed amid concerns over local environmental risks and climate change, a committee of MPs has demanded.
The cross-party Environmental Audit Committee (EAC) warned extensive production of unconventional shale gas, which is extracted through the controversial process of fracking, is not compatible with the UK’s goals to cut greenhouse gas emissions.
The committee also called for fracking to be “prohibited outright” in protected areas such as national parks, areas of outstanding natural beauty and ancient woodlands, and banned in all water source protection zones, which feed drinking water aquifers.
Fracking could happen on a large scale in the UK despite a recommendation from council officer to refuse two applications in England.
Cuadrilla said it will appeal any decision made councillors following the findings of a report by Lancahire County Council planning officials.
The recommendations were made over fears regarding the amount of night time noise and traffic the applications would generate.
Nearly two-thirds of coalition MPs could face the prospect of fracking in areas that feed water supplies in their constituencies despite public opposition, environmental campaigners have claimed.
Analysis by Greenpeace shows the constituencies of 220 Conservative and Liberal Democrat MPs have an overlap between areas being made available for onshore oil and gas licences and groundwater source protection zones, which feed aquifers.
The research was published by the green group ahead of MPs voting on the Infrastructure Bill next week, which contains legislation on fracking.
Proposals for “fracking” for shale gas at two sites in Lancashire should be refused, planning officers have recommended.
Lancashire County Council has published reports with recommendations on planning applications from shale company Cuadrilla to develop two new sites to explore for shale gas by drilling, fracking and testing the flow of gas.
The council’s development control committee is due to make decisions next week on the planning applications for the two sites, at Preston New Road, near Little Plumpton, and Roseacre Wood, near Roseacre, both between Blackpool and Preston.
BHP Billiton Ltd. (BHP), the biggest overseas investor in US shale, will cut the number of its rigs there by about 40% as plunging petroleum prices add to concerns about lower iron ore earnings.
Drilling and development spending on US onshore oil and gas fell to $1.9 billion in the six months to December 31 from $2.1 billion a year ago, the Melbourne-based company said today in a statement. BHP will cut the number of active rigs to 16 from 26 by July, it said.
Brent crude, a benchmark for more than half of the world’s oil, declined 48 percent last year as increasing output in the US contributed to a global glut.
Oil traded near $50 after capping its first weekly gain in two months as investors weigh rising OPEC output against speculation supply from outside the group will slow.
Futures were little changed in London and New York.
Iraq is pumping at a record pace of 4 million barrels a day, Oil Minister Adel Abdul Mahdi said. Non-OPEC nations will boost output this year at a weaker rate than previously forecast, according to the International Energy Agency.
West Texas Intermediate oil fell for the fourth time in five days as OPEC said it expects weaker demand for its crude and US output climbed to the highest in records dating to January 1983.
Demand for oil from the Organization of Petroleum Exporting Countries will average 28.8 million barrels a day, about 100,000 barrels less than forecast last month, the Vienna-based organization said in a monthly report.
US output surged to 9.19 million barrels a day last week, the Energy Information Administration reported yesterday.
Oil resumed its decline after the biggest gain since June 2012 as US crude production increased, bolstering speculation a global supply glut that spurred last year’s price collapse may persist.
Futures dropped as much as 1.8% in New York. US output surged to 9.19 million barrels a day last week, the fastest pace in weekly records dating back to January 1983, the Energy Information Administration reported.
Crude may fall below a six-month forecast of $39 a barrel and rallies could be thwarted by the speed at which lost shale production can recover, according to Goldman Sachs Group Inc.
Oil fell for a fourth day, extending losses from the lowest close in more than five and half years as the United Arab Emirates and Kuwait predicted a global supply glut will persist to at least the second half of 2015.
Futures dropped as much as 1.5% in New York.
The market may recover only when demand improves later this year, Ali Al Yabhouni, the UAE’s governor to the Organization of Petroleum Exporting Countries, said yesterday.
During the holidays, a friend was driving home and said she spotted a fracking well soon after she crossed into Texas.
She wasn’t happy about it. Another friend posted on Facebook a picture of gas prices below $2 a gallon — something that hasn’t happened in more than five years — and commented that the low price made him feel as if “he was stealing something.”
In America, the world’s largest energy-consuming nation, the biggest fractures occur not in deep underground shale formations but in the way we separate our perceptions of energy from reality.
OPEC nations can withstand a drop in crude prices to the lowest in more than five years, while shale drillers will probably be the first to curb production amid the collapse, the United Arab Emirates’ energy minister said.
Oil slumped almost 50% last year, the most since the 2008 financial crisis, amid a supply surplus that the U.A.E. and Qatar estimate at 2 million barrels a day.
The Organization of Petroleum Exporting Countries is battling a US shale boom by resisting production cuts, signaling its readiness to let prices fall to a level that slows American output, which has surged to a three-decade high.
If there ever was doubt about the strategy of the Organization of Petroleum Exporting Countries, its wealthiest members are putting that issue to rest.
Representatives of Saudi Arabia, the United Arab Emirates and Kuwait stressed a dozen times in the past six weeks that the group won’t curb output to halt the biggest drop in crude since 2008.
Qatar’s estimate for the global oversupply is among the biggest of any producing country. These countries actually want -- and are achieving -- further price declines as part of an attempt to hasten cutbacks by US shale drillers, according to Barclays Plc and Commerzbank AG.
Oil extended its rally amid speculation that the US shale boom is slowing and will reduce a global glut that’s driven prices to the lowest in 5 1/2 years.
Futures rose as much as 1.7% in New York, trimming a seventh weekly decline. US producers are bailing out of long-term contracts for drilling rigs as prices slide below $50 a barrel.
The United Arab Emirates has no plans to reduce output no matter how low prices drop, according to Yousef Al Otaiba, the nation’s ambassador to the US.
Oil was steady as analysts said a supply glut that’s driven prices to the lowest level in more than five years will linger through the first half of 2015.
Crude has dropped by more than half since June as US output surged and the Organization of Petroleum Exporting Countries decided to maintain its production ceiling.
Saudi Arabia won’t cut its output, though producers outside the group are welcome to do so, Ali Al-Naimi, that country’s oil minister, said at a conference in Abu Dhabi last month.
Encouraging economic news and a rare rise in oil prices helped give the US stock market its first gain in the new year.
Major indexes started climbing from the opening bell, following a report from ADP, the payroll processor, which showed that businesses hired more workers last month.
Companies added 241,000 workers in December, an increase from the previous month.
Oil prices have almost bottomed out and “some recovery” is likely by the second half of the year as demand picks up, commodity hedge fund manager Andrew J. Hall told investors.
Crude could trade in the $40-a-barrel range in 2015, close to “an absolute price floor,” the head of Astenbeck Capital Management wrote in a letter.
The US exported a record amount of crude oil in November after a five-year run of production growth that has made the country the most oil-independent in 20 years.
Shipments surged 34% to average 502,000 barrels a day in November, the highest on record dating back to 1920, surpassing the previous monthly peak of 455,000 barrels set in March 1957, data from the US Census Bureau and the Energy Information Administration show.
The US is now the 17th-largest exporter.
