The first national UK shale colleges are getting the go-ahead today from Business, Enterprise & Energy Minister Matthew Hancock MP.

The Department for Energy and Climaste Change said the new centres of excellence are being set up to train a generation of onshore oil and gas specialists and help the UK to take advantage of  the economic opportunities offered by natural shale gas.

The National College for Onshore Oil and Gas will be headquartered in Blackpool and linked to colleges in Chester, Redcar and Cleveland, Glasgow and Portsmouth.

Speaking at the college headquarters at Blackpool today, Business, Enterprise and Energy Minister Matthew Hancock is expected to say:

“Shale gas is an enormous opportunity for the UK and one that we simply can’t afford to miss out on. Imagine if we had passed up a similar opportunity to go into the North Sea some fifty years ago. What if we’d let that oil and gas stay in the ground? What if we’d said it was too difficult or too controversial?”

“I am not prepared to pass up a once-in-a-generation economic opportunity, with the potential for industry to invest up to £33 billion in the next 15 years or so. Families, villages and towns across the UK could benefit from this new industry and its supply chain which could create 64,500 jobs.”

Industry group, the United Kingdom Onshore Oil and Gas (UKOOG), led the bid to set up the College. The Government is providing £750,000 of development funding which will be matched by industry bodies and education providers to develop the College.  Further capital funding will be available from the National College programme to support the college on an industry-matched investment basis.

Mattehw Hancock added that the aim is to make a world-class cluster of shale gas expertise in the North West of England, just as Aberdeen is a world class cluster of expertise for offshore oil and gas.

The National College will:

• Provide high level specialist skills needed by the industry from ‘A’ level equivalents right through to postgraduate degree level, and train teachers and regulators.
• Accredit relevant training and academic courses run by other institutions.
• Carry out research and development for improved equipment, materials and processes that will increase the efficiency and reduce the environmental impact of   operations.

Blackpool and the Fylde College’s Lancashire Energy HQ will deliver a comprehensive range of qualifications up to postgraduate level, with facilities including a drill simulator and emergency control simulator.

Shale gas investment could reach £3.7bn pa and support 74,000 jobs

UK investment could reach £3.7bn a year and support 74,000 jobs in the oil, gas, construction, engineering and chemicals sectors 2014 according to a report published by  Ernst and Young in April “Getting ready for UK shale gas Supply chain and skills requirements and opportunities.”

The report projects that the total investment required could be as high as £33bn between 2016 and-2032.

There are about a dozen companies actively considering exploratory drilling but the Government does not expect any hydraulic fracturing to take before 2015. Yesterday the Environment Agency said it is “minded to approve” an application by energy company Cuadrilla for planning permission at two Lancashire sites, including hydraulic fracturing; the planning decision is expected early next year.

The issue has been considered this week in two separate House of Lords debates. A proposed amendment to the Infrastructure Bill by Labour to make water companies statutory consultees for fracking planning applications was rejected by peers debating the report stage of the Bill.

Peers press for acceleration of planning process

A separate debate to discuss the report of the HoL Economic Affairs Committee (EAC) on The Economic Impact on UK Energy Policy of Shale Gas and Oil revealed strong support among peers for the UK to accelerate shale gas development in the UK.

Lord MacGregor of Pulham Market (Conservative) the current Committee chair, said the EAC had held 20 evidence sessions with a wide range of opinions from political, business and environmental groups. Based entirely on the evidence received, the questions asked and the Committee’s own analysis, the report was unanimous.

The Report, published in April, examined the production prospects in the UK, the potential benefits and the risks of not going ahead. It also covered the progress -  or lack of it - to date, the climate change effects, the environmental and regulatory concerns and what more needs to be done.

Arguments for swift development are compelling

Lord MacGregor said:

“As our report makes clear, the experience in the United States has been astonishing. New production techniques to release gas from shale rock have brought abundant and growing new supplies of gas to market in a short time. Shale oil production is also growing rapidly.”

“Gas prices have fallen to about one-third of the UK price level. Despite recent falls in oil prices on the world market, the benefits of shale oil and gas to the US remain substantial and long lasting, whereas world oil prices will continue to be volatile.”

He added that the Committee had identified substantial benefits if shale gas could be developed on a significant scale, commenting:

“Recent geological surveys, particularly that of the British Geological Survey, have shown where the shale gas and oil prospects are likely to be, but the crucial point—and I must stress this—is that we will not know the extent of actual production capacity until the exploratory wells are installed. So far, not a single one has been…….the arguments for swift development of our indigenous supplies remain compelling.”

Shale gas compatible with UK climate change commitments

In the Committee’s view, the development of shale gas in the UK is compatible with the UK’s commitments to reduce greenhouse gas emissions, because of the acknowledged role for gas and that substitution of British shale gas for imported LNG would also reduce the UK’s carbon footprint.

A large section of the report is concerned with examining the environmental impact of shale gas in the UK, covering ground water contamination, disposal and treatment of flow-back water, effect on UK water supply and seismic activity.

Lord Macgregor said:

“There is an impressive amount of scientific evidence that, with a robust regulatory regime, the risks to the environment and public health are low. We concluded that, with such a regime in place, the environmental risks are small, whereas the benefits, if shale gas development can take place, are substantial.”

More strongly co-ordinated government campaign needed

However, there continue to be concerns about the costs, complexities and delays involved in the planning process - an area which needs “continuing urgent action by Ministers.“

He drew attention to the Government’s response to its report which said:

“Development and production will take time. The first successful shale fracking demonstrations in the United States were in the early 1990s, but production at commercial scale did not get under way until the early 2000s”.

Lord Macgregor commented:

“I hope that is not the timescale by which the Government intend to judge themselves. We simply cannot wait that long.”

The Committee has called for a more strongly co-ordinated government campaign, and one given higher priority to put over the message constantly repeated and speed up the process.

The Committee also want the Prime Minister to establish a Cabinet Committee or Sub-Committee, chaired by the Chancellor of the Exchequer, to direct and coordinate policy on development of shale gas, with a mandate to promote "well regulated exploration and development" of the UK’s shale gas resource.