(Reuters) – Britain’s first round of shale gas licensing in six years is attracting solid interest from investors, according to business and energy minister Matt Hancock, who says the country has a duty to use fracking to secure its future energy supply.
Energy security sits high on Britain’s list of political priorities as its once-plentiful North Sea oil and gas resources dwindle and the geopolitical risks of relying on energy imports rise.
In response, the government is trying to foster investment from firms who can extract oil and gas trapped in the porous rocks underneath swathes of the British countryside using a process known as fracking.
“I feel like it’s the duty of any government to ensure that this potential is explored … fracking has the potential to be very important for the security of our energy supplies,” Hancock told Reuters on the sidelines of his Conservative party’s annual conference in Birmingham.
“We’ve been a huge beneficiary of having domestic energy supplies under the North Sea for 30 years and we need to make sure that continues,” he added.
Fracking could meet a third of the country’s gas needs by the early 2030s, Britain’s gas pipeline manager National Grid estimates.
In the United States, massive private investment in fracking has unlocked huge gas reserve, revolutionising the country’s energy production, diminishing the need for imports and lowering consumer and industry energy bills.
However Britain’s efforts to replicate that success have progressed much more slowly.
The government has offered generous tax breaks to encourage firms to invest, but the start of shale gas fracking has been slow – in part due to strict regulation guidelines and vocal public opposition to the process over fears it is environmentally damaging. Protestors last year blocked access to an oil exploration site run by Cuadrilla Resources.
However Hancock said the government’s latest batch of exploration licences, which were put up for offer in July, were attracting interest from investors.
“I’m confident that it will be successful,” he said. “There’s clearly more and more big companies coming into this space with the resources they bring with them, and I warmly welcome that.”
Last week Swiss-based chemicals group Ineos acquired a stake in a shale oil and gas licence in Scotland.
Other companies involved in shale gas exploration in Britain include IGas, Cuadrilla and Egdon Resources. (Additional reporting by Karolin Schaps; editing by Stephen Addison)