The issue of land ownership in terms of drilling for shale gas in the UK will be ‘critical’, the Energy Minister says.
Energy Minister Charles Hendry told the Commons Energy and Climate Change Committee inquiry into shale gas the issue of land ownership was a “very critical one” and individual land owners would need to give consent.
Shale gas in the UK would not be a ‘game changer’ in the same way as the US, or expected to have the same impact on prices, because of the flexibility of the UK market and the different sources of gas, Hendry said.
“Shale gas is not essentially a new technology; it’s a new strata using an existing technology.”
Hendry also said that the EU could be useful in terms of sharing information and making sure that best practice was understood for shale gas, but he was not persuaded about a common European standard.
“My nervousness about common standards is they sometimes end up being the lowest common denominator.”
Hendry was also questioned by committee members on the Budget announcement to have a windfall tax on North Sea oil firm profits.
He said Chancellor George Osborne was “right to make an assessment - the balance needed to be progressed to protect consumers at a time when there was significant extra gains being made for the people who were developing offshore”.
“We understand it is not popular, that’s why we’ve had discussions with the industry, that’s why we are continuing to look at whether there are areas where we can respond to some of the concerns which are being expressed.”
The committee has announced it will hold a one-off oral evidence session on the implications of the oil tax hike in May. It will hear from Energy Secretary Chris Huhne, and the oil and gas industry.