Cuadrilla Resources Ltd.’s plans to drill for shale gas in northwest England were rejected by local officials, the latest blow to the U.K. government’s ambitions for a domestic fracking industry, Bloomberg said.
Lancashire Council voted Monday against the company’s plans to drill at its Preston New Road site, according to the authority’s Twitter feed. Council officials had previously recommended drilling at the site be approved.
The rejection is also a setback for David Cameron’s government, which has sought to promote the nascent hydraulic fracturing industry by cutting taxes and relaxing planning rules to lower reliance on imported gas. That backing has been challenged by local communities, which fear that injecting chemically treated water into the ground will pollute the environment and cause earthquakes.
“This is a fantastic victory for the people of Lancashire, and the campaigners who have fought so hard to increase awareness of the dangers of fracking,” said Caroline Lucas, a U.K. lawmaker for the Green Party. “Today’s decision proves that, in spite of all the government’s efforts to force through fracking, local communities can prevent it from going ahead.”
Cuadrilla’s rejection is the latest sign that fracking may remain the preserve of U.S. drillers after Poland’s attempts to promote domestic shale-gas also foundered. Difficult geological conditions, fierce environmental opposition and the collapse of the oil price have stymied development of a fracking industry in Europe. Fracking involves blasting a mix of water, sand and chemicals into rock to release oil and gas.
“The expectation must be that Cuadrilla will appeal this decision,” said John Williams, a consultant at Poyry Management Consulting. “However, this decision is a serious setback for shale gas in the U.K. and many must be wondering if it can ever reach production phase.”
The decision comes after the council last week rejected Cuadrilla’s plans for a well at the nearby Roseacre site and is the latest in a series of blows to the company. Cuadrilla was forced to scale back drilling proposals earlier this year after council planners opposed its applications for eight wells at the two sites, citing concerns over noise and traffic.
Cuadrilla said it was “surprised and disappointed” by the council’s ruling, according to a statement on its website.
Stratas Advisors forecasts a 53 Bcf injection into gas storage for the week ended Aug. 16.
The spread between Brent and WTI has narrowed, making US oil less attractive.
The Freeport LNG project in Texas started production at its first liquefaction train on Aug. 12 and aims to start commercial operation in the fall this year.