Fracking firms plan £1bn legal fight over shale gas extraction ban

The fracking industry is exploring a mammoth legal challenge of between £500m and £1billion against the Government after it suddenly re-banned shale gas extraction last month. 

Companies and other groups connected to the sector are considering launching one or multiple cases. 

Liz Truss lifted a moratorium on fracking during her brief prime ministership, claiming that kickstarting Britain’s shale industry could bolster the country’s energy security. 

Concern: The key reason the Government has turned against fracking is because it can cause minor earthquakes

The UK is estimated to be sitting on up to 50 years of shale gas deposits. But companies and investors were left furious after the moratorium was swiftly reimposed when Rishi Sunak took power, in line with a pledge in the 2019 Conservative manifesto. 

If putting pressure on the Government to re-lift the ban does not work, the industry is now keen for compensation for years of investment. 

A source said: ‘It would almost certainly reach hundreds of millions of pounds – at least £500m and potentially as much as £1billion.’ 

Ministers claim that they would need new scientific evidence that fracking does not cause harm. The process involves pumping a mixture of sand, water and chemicals into the earth to crack shale rock and release trapped gas. 

The key reason the Government has turned against fracking is because it can cause minor earthquakes. 

Fracking is subject to more stringent requirements than many other industries. The source said: ‘If the same rules applied, the UK would have no quarrying, construction or geothermal energy.’ 

The Mail understands the sector was drawing up a strategy with civil servants until the day before the U-turn. 

Industry sources claim the plans could have seen UK-produced natural gas being supplied within two years. 

The main operators are Cuadrilla, Jim Ratcliffe’s Ineos, Aurora Energy Resources and the listed firms Egdon Resources and IGas, whose investors include the fund run by financier Crispin Odey. 

In a statement in response to the ban, IGas said it was ‘shocked and disappointed’ about the decision and that it ‘reserved the right to pursue any legal process available.’ 

A spokesman for the industry body UK Onshore Oil & Gas said ‘no option’ was off the table after the U-turn.