Show caption Cuadrilla said it had only been able to frack 5% of its well near Blackpool because of the earthquake rules. Photograph: Christopher Thomond/The Guardian Oil and gas companies UK fracking industry pushes for review of earthquake limits Firms say regulations forcing operations to stop if they trigger tremors greater than 0.5 magnitude threaten viability Adam Vaughan @adamvaughan_uk Sat 16 Feb 2019 16.00 GMT Share on Facebook

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The UK’s nascent fracking firms are headed for a crunch moment that will determine whether the industry has a future, according to observers and insiders.

The past fortnight has seen a concerted lobbying drive by two of the leading shale companies calling for the government to review rules on earthquakes caused by their operations.

The country’s richest person, Jim Ratcliffe, founder of the petrochemicals firm Ineos, branded the regulations “absurd” and “unworkable”, and implied the government should consider limits closer to those in the US.

Cuadrilla said it had only been able to frack 5% of its well near Blackpool because of the rules, and warned commercial fracking was not viable under the UK’s regulatory regime. Last week it also had a planning appeal for a second site rejected.

Neither firm has gone as far as saying it would pull the plug. But it is clear the sector is at an impasse and cannot proceed without a rethink by ministers and the Oil and Gas Authority (OGA), the industry regulator.

Both the government and the OGA have said they had no plans for a review of the “traffic light system”, which forces firms to stop fracking if they trigger tremors of greater than 0.5 in magnitude.

Claire Perry, the energy minister, has said repeatedly in the past few months that there were no plans for a review. But she has previously privately said the threshold could be “adjusted upwards” as the industry gains experience.

Q&A What is fracking? Fracking, or hydraulic fracturing, is a way of extracting natural gas from shale rock formations that are often deep underground. It involves pumping water, chemicals and usually sand underground at high pressure to fracture shale – hence the name – and release the gas trapped within to be collected back at the surface. The technology has transformed the US energy landscape in the last decade, owing to the combination of high-volume fracking – 1.5m gallons of water per well, on average – and the relatively modern ability to drill horizontally into shale after a vertical well has been drilled. In England, the government placed a moratorium on fracking in November 2019 after protests, legal challenges and planning rejections. A year earlier, the energy company Cuadrilla was forced to stop work at its Preston New Road site in Lancashire twice in four days due to minor earthquakes occurring while it was fracking. The tremors breached a seismic threshold imposed after fracking caused minor earthquakes at a nearby Cuadrilla site in 2011. In March 2019 the high court ruled that the government's fracking guidelines were unlawful because they had failed to sufficiently consider scientific evidence against fracking. Show Hide

There are signs the lobbying could be falling on receptive ears, with reports that a review of the rules will be announced within weeks.

Ken Cronin, chief executive of the shale industry group Ukoog, said now was the time to revisit the regulations, as the industry had evidence from Cuadrilla’s fracking.

“It’s right and proper now to say we’ve done a fairly major operation in Lancashire, we have 40,000 data points, let’s do the review,” he said.

Cronin said the industry had invested £400m-500m so far on exploring for shale, but investor confidence would be hurt if a review did not materialise, given companies’ expectations.

He added: “It becomes very, very difficult to warrant any more fracturing [without a review]. I think it’s highly unlikely companies will invest based on what is the current [regulatory] position.”

Natascha Engel, the government’s independent commissioner for shale gas, said the industry was on the cusp of finding out how much of the gas was trapped underground, but seismicity rules were holding it back. She urged the OGA to undertake a review.

“Opponents are saying don’t lift it, don’t review it, which makes no sense. It’s been made into a political decision rather than a technical decision and I think that’s a mistake,” she said.

Companies could not wait forever for a review, she said. “Things are coming to a head. We’ve had a stalemate. Decisions will have to be made.”

While Cuadrilla has come to a natural pause in operations after fracking its Blackpool well, other companies are still active.

Tom Pickering, chief operating officer of Ineos’s shale unit, said the company was still working on its sites. One in South Yorkshire and one in Derbyshire have planning approval. A third, also in South Yorkshire, is waiting on a planning appeal that could take up to a year to decide.

IGas Energy, in which Ineos has a stake, failed to find the shale formation it was targeting at a site in Nottinghamshire and has abandoned it. But it said this week that drilling at Springs Road, also in the county, had “augured well for the future”.

The public remain opposed to fracking, with recent government polls finding 37% against and only 17% in favour. Photograph: Ian Francis/Alamy

Another firm, Third Energy, which wants to frack an existing well in North Yorkshire, has experienced repeated delays, and concerns over its finances triggered new government checks. But this week it emerged that the company had submitted new plans to the OGA committing it to frack before the year is out.

The public remains opposed to fracking. Government polling this month found 35% against, 13% in favour and 47% neither for or against, while the rest did not know.

Opponents said the lobbying drive showed companies were in trouble.

“We are seeing an industry that is desperate and knows it’s not viable. I think you’re really seeing an industry in its death throes,” said Jamie Peters, an anti-fracking campaigner at Friends of the Earth.

Communities near prospective fracking sites had been promised by industry and government that tough regulations would protect them, so they would feel betrayed by a U-turn, he added.