Shale Gas Drilling 'Huge Boost' To UK Economy

Richard Suchet, Sky News Reporter
Shale Gas Drilling 'Huge Boost' To UK Economy

Drilling for shale gas could create "tens of thousands" of jobs in the UK and generate vast sums of money for the Treasury, according to a UK-based exploration company.

Cuadrilla chief executive Francis Egan has told the Commons Energy and Climate Change Committee that the controversial process will also reduce Britain's dependency on imported gas.

Opponents say the method of hydraulic fracturing - or 'fracking' - which involves pumping water into rock to push out natural gas, carries numerous environmental risks.

But Mr Egan insists there are huge benefits, and that everything is being done to negate the dangers.

"The UK is importing most of its gas. In 10, 20, 30 years it will be importing virtually all of its gas," he said.

" ... If [fracking] is successfully developed, it will generate significant tax revenues and employment."

Bulgaria and France have both banned shale gas exploration, and in Britain it has yet to receive full Government approval.

"The only way we can prove the safety of shale gas exploration is by doing it and demonstrating we can be good neighbours," Mr Egan told the committee of MPs.

He added: "I think that's the case for any industry that's starting up. You have to do it, show that you are doing it properly and then you win trust. We can't talk the gas out of the ground."

Cuadrilla Resources estimates that its Bowland Basin site in Lancashire contains as much as 200 trillion cubic feet of gas.

If even a fraction of that is extracted, the company says it could make a significant contribution to Britain's energy supplies and be good news for the economy, with the potential to create "thousands to tens of thousands" of jobs.

"We have spoken of meeting 25% of the UK's gas demand. You can't do that without generating thousands of jobs.

"The oil and gas industry creates jobs across the full range of disciplines: Engineering jobs, accounting jobs, technician jobs, security guard jobs and out from that into the supply business," said Mr Egan.

Corin Taylor from the Institute of Directors added: "A lot of these jobs will be in parts of the UK that really need them so I think it's an important part of re-balancing the economy."

Also giving evidence to the committee was Graham Tiley, general manager of Shell, Ukraine.

He told the panel he sympathised with public concern and that the term "unconventional gas" had been misunderstood.

"The term 'unconventional' has a very specific meaning. It means 'unconventionally trapped hydrocarbons'.

"It's fine for a bunch of geologists to throw these words around but when that comes out in a public sphere, it leads to concern and unease.

"Hydraulic fracturing is a very descriptive and straightforward term. That's what you do. You use water to fracture the rock.

"Unfortunately the shorthand version of 'fracking' has become almost an accepted swear word these days.

"I think what the industry has recognised is that we have done a very poor job of communicating our activities to the public," he said.

Mr Egan also told MPs that the drilling company is still in consultation with the Treasury about tax arrangements.

He said: "We're potentially at the point of starting a whole new industry in the UK.

"If that industry is allowed to grow up into a tax-paying adult, it will pay a lot of tax. But it is in its infancy.

"There is a concern that the infant could be strangled at birth if the tax system isn't appropriate."