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Fracking: What will it do for construction?

Last month, the government announced the 14th round of licensing results for UK onshore oil and gas.

A total of 159 licences were offered, with 132 of these subject to further investigation under the habitats directive.

The announcement marked a welcome boost for the shale gas sector and, in turn, the construction and consulting industries.

The UK market is estimated to be worth up to £33bn, with potentially 4,000 wells to be brought into production.

Whether it will reach its full potential remains to be seen, as there has only been limited investigation of our complex deep shale resources and public acceptability of shale gas is still relatively low.

However, unconventional gas resources such as shale could boost the economy and provide greater energy security.

Sizeable opportunity

If shale gasdoes take off, construction and consulting can look at this sector as a significant future market.

While the UK industry is small, the US market makes a useful comparison. The US Unconventional Oil and Gas industry was worth $237.6bn in 2012; of this, $7.27bn was spent on the construction industry.

Similarly, around 15 per cent of the 1.7m employed in fracking in the US were identified as working in the construction sector as of 2012.

Much of the construction itself would be related to building well pads (the area prepared for a drilling rig) and associated infrastructure.

“About 15 per cent of the 1.7m employed by fracking in the USA were identified as working in the construction sector”

A report by the Institute of Directors in 2013 suggested each pad could generate around £10m of work, meaning every 100 pads would be worth £1bn.

Further construction opportunities will also present themselves, such as the construction of roads, pipelines, gathering stations and wastewater treatment facilities.

From experience in the US, the construction industry has also benefited from increases in the local economy for retail services and hotel rooms.

Tight regulation

Lessons learned elsewhere have fed into efforts to implement a safe and environmentally benign industry in the UK, which is being built around a tightly regulated platform on which these resources can firstly be explored and then viably extracted.

The considerable regulatory framework on the industry will provide new markets for the consultancy sector, as support will be required from obtaining environmental and regulatory approvals through to site decommissioning.

While shale may never reach the same levels as in the US, the industry should consider how it can support this energy source in a safe and sustainable way, as it has the potential to provide ample value for the UK consumer and huge opportunity for the UK construction sector.

Russell Thomas is a technical director within the environmental business at WSP | Parsons Brinckerhoff and a visiting professor at the University of Strathclyde.

Readers' comments (1)

  • The fracking debate will continue for many a year fuelled not least by the NIMBY and green brigade. When compared to fossil fuels fracking is far less intrusive and disruptive than say coal mining. It takes up far less area and leaves no contaminated spoil heaps. Remediation and reinstatement of a worked area is far less costly both in terms of surface area and the underground voids left by mining that may need grouting if the area is developed. I have never heard of a lung disease caused by fracking, or a lift plummeting to the bottom of a shaft, or explosions or noxious gasses, or widespread long term subsidence. I have never heard reported anyone dying as a direct result of fracking. Fracking has the potential to enhance and fund community projects instead of leaving a lasting legacy of scarred landscapes and painful lingering deaths. Fracking is the way forward if we are to solve our energy crisis and should be embraced. The government will have its way....eventually.

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