The UK Government has welcomed the £33bn shale gas supply chain report published today - Business and Energy Minister Michael Fallon said the report showed “the huge prize at stake” for the UK in terms of jobs and manufacturing in the supply chain for the onshore oil and gas industry.

Shale gas could create a new onshore supply chain market for equipment, services and skills across a number of industry sectors worth up to £33 billion by 2032, creating over 64,000 jobs, according to the EY report published today by trade body United Kingdom Onshore Operators Group. The UK could also lead the way in technology and skills across Europe, a significant and untapped market.

Michael Fallon also announced the launch of a £2 million competition by the Technology Strategy Board to support innovative ideas to produce or explore for shale gas, particularly focused on projects reducing environmental impact. The Department for Energy and Climate Change and the TSB will provide two million pounds funding for projects run by firms with innovative ideas for improved or new techniques to produce or explore for shale gas, including environmental management and reservoir monitoring.

The Minister said the Government also fully accepted the recommendations of the MacKay/Stone report to monitor the carbon footprint of domestic shale gas. The Government has committed to:

• Pursue a detailed scientific research programme to monitor emissions relating to shale gas exploration and production, to increase the evidence base and inform regulatory monitoring;
• Require shale firms to use the best technologies available to capture emissions from operations; and
• Research with industry new techniques to minimise GHG emissions, water demand and vehicle movements.

Energy and Climate Change Secretary Ed Davey commented:

“We must explore the benefits and investment shale gas may bring but that should not come at the expense of the environment. Over the past year the scientific evidence has allowed us to conclude that shale production can be managed effectively as long as best practices are implemented and enforced.”

“Today, by fully accepting the recommendations of the Stone/MacKay report, we are setting out how we will regulate and monitor shale gas keeping our carbon emissions to a minimum.”

“This £2 million funding we have announced shows our continuing commitment to remain at the forefront of new technology and techniques to efficiently and cleanly explore and produce shale gas.”

DECC are requiring firms to assess the potential environmental risks from their projects at an early stage so that these can be addressed and communities can engage early – the Department has today launched guidance to industry on the Environmental Risk Assessment.