Yahoo Finance Shale sector still shackled by local opposition, warns Fitch
The burgeoning shale gas sector will remain shackled by strong opposition to fracking despite a fresh Government push to support onshore fossil fuel producers, ratings agency Fitch has warned.
The recent flurry of support from Government ministers could in fact strengthen grass-roots opposition to further drilling projects, Fitch added.
Cuadrilla is due to restart fracking at its Preston New Road site after a seven-year hiatus later this week after years of political indecision over the safety of shale gas extraction.
It brushed off a last-ditch appeal to block drilling through a temporary court injunction to be heard on Wednesday, and has vowed to press ahead within days.
However, while the restart is “significant” it “will not mark an inflection point for the industry”, according to Fitch.
“Vehement social opposition to the development of a shale gas industry in the UK will remain the largest barrier to progress,” the report said.
“Even in the event of positive results from the latest set of drilling, public opinion and social opposition to fracking is unlikely to change in the short to medium term. Conversely, disappointing or average results from the Lancashire wells will likely dent public support for shale development even further,” it added.
The Government has established a Shale Commission to help pave a path for would-be frackers.
Last week energy minister Claire Perry appointed former Labour MP Natascha Engel as the first Shale Commissioner saying it was important to “get the facts straight on shale gas”.
“This new role will provide a single point of contact for local residents to get the information they need and have their questions answered,” she said.
Fitch said the new proposals would most likely improve the lead times for unconventional drilling projects by removing “some of the bureaucratic barriers” that have strangled projects in the past.
“However, the backlash from the proposal is likely to be significant, with the perception that local views are being removed from the development process. This could in fact strengthen grass-root opposition to further drilling projects,” it said.
