Earlier this week, the Lancashire County Council rejected a bid by the energy company Cuadrilla to start drilling and fracking (fracture stimulation) to extract gas on the Fylde coast in Lancashire at the village of Little Plumpton, between Preston and Blackpool.

An application to start a fracking operation at Roseacre Wood, also in Lancashire, was similarly rejected on June 23, even though the county council’s planning officials recommended both projects be given approval.

The latest decision is obviously a disappointment for Cuadrilla, partly owned by Centrica (LON:CNA), which has been banned from fracking since 2011 when two of its wells were felt to have caused small earthquakes near Blackpool.

It is also a set-back for the supporters of the controversial fracking process, which involves pumping chemicals and lots of water into a well to break up the shale rocks and extract the gas.

Supporters thought approval in Lancashire would amount to the equivalent of a starting gun shot for a so-called shale revolution in which the UK would replicate the one in the US.

This single development has led to a sharp fall in the price of gas and brought about a renaissance in industrial in investment because of lower American energy costs as well as reduced the country’s dependence on foreign imports of oil.

Judy Hobson, the BBC North West Tonight environment correspondent, commenting on the Preston decisions said: “Anti-fracking campaigners are celebrating but this decision does not spell the end of fracking in the North West or the UK.

“The government could overrule the decision - and this government is committed to establishing a shale gas industry.”

Well, maybe it might happen elsewhere in UK but probably not in the Home Counties in the south of England any time soon.

The Weald Basin is described as the UK’s second largest belt of shale after the Bowland. It covers the South Downs National Park, which stretches across East Sussex, West Sussex and parts of Hampshire, the Surrey Hills and High Weald areas of outstanding national beauty.

There is an important difference between the Bowland and the Weald Basins, however, and that is, while the Bowland contains mostly gas, the Weald Basin is oil prone.

Oil is a more difficult sell to environmentalists than gas. Extracting oil is a far messier business than pumping gas. Also, oil is more potent as a fossil fuel than gas in terms of carbon emissions, particularly when used as a transport fuel. This makes an unpopular fuel for many.

It can also be notoriously difficult to estimate how much oil is in-place and especially to know how much of the “in-place” oil is recoverable.

Doubts about recovery rates can encourage oil companies to frack under the belief that it can greatly increase output; and this makes oil doubly unpopular.

Horse Hill is a case in point. There has been a lot excitement about the recent Horse Hill discovery, which is three kilometres from Gatwick airport in the Surrey/ West Sussex border area, and it is in the Weald Basin.

It has been estimated there could be 9.2bn barrels of in oil-in-place, with broader estimates in a range between 3.1bn and 17bn barrels. This would, on the face of it, make Horse Hill a world class discovery.

But Horse HiIl is a complex multi- zoned hybrid play. Hybrid plays in the US typically have recovery rates of between three and 15%. They also typically, in part at least, include shale. That usually involves fracking.

David Lenigas, chairman of UKOG, the biggest UK listed stakeholder in Horse Hill with 20%, has repeatedly said that fracking is not on the agenda for Horse Hill. But what if the conventional drilling does not work?

Here the argument takes an interesting twist and turn. About a year ago now the British Geological Society (BGS), with the enthusiastic backing of the government, said there could indeed be oil in them there hills under Surrey, Kent and Sussex. But geologists say it is doubtful how much is recoverable and no–one should expect a bonanza.

The BGS report said there could be between 2bn and 8bn barrels of oil-in-place, with a best, mean case of 4bn barrels.

Robert Gatliff, director of energy and marine geo-science at the BGS, said extraction rates are likely to be no higher than 10%, which would be equivalent to 100th of the amount of North Sea oil already extracted.

He added that there was no evidence to support the existence of shale gas in the Weald Basin. “It won’t be a big bonanza,” he explained.

Andrew Aplin, the professor of earth sciences at Durham University, went further: “Data from the US suggests that, at best, only 5% of the oil may be extracted from shale.

“Since neither the rock nor the oil is of optimal quality in the Weald, we might estimate that 1% of the Weald oil resource might be recoverable.”

He calculated that this equated to 50mln barrels, or a few months of UK consumption and concluded: “From a national perspective, this seems to be a rather small prize.”

Of course, success at Horse Hill could change all this, but not for a long time.

In the meantime there is the consideration that, if there are real doubts about recovery rates, is it worth the disruption?

And this is before we look at the potential environmental damage, or the political unpopularity that would follow the controversial decision to drill.

Remember the context. Many, if not most councillors in Sussex and Surrey, are usually conservative in the traditional sense of the word, that is conservative with a small “c”.

No-one wants to insult the charms and attractions of Lancashire, but as colleague Jamie Ashcroft put it when writing about Horse Hill: “In the countryside of Surrey, Sussex, Hampshire and Kent, building a housing development can be difficult enough never mind an oilfield.

“With its rolling hills, farmland and castles the area remains very much an archetypal image of England’s green and pleasant land.”

Following the demonstrations at Balcombe last year, which were livelier and more violent than those in Lancashire, there have been two rejections of fracking proposals in Sussex.

The South Downs National Park Authority (SDNPA) threw out an application from Celtique Energie for a drill that could have led to a frack at the picturesque village at Fernhust in West Sussex.

A second at Wisborough Green, also in West Sussex, was rejected by the West Sussex Council on the grounds that the traffic carrying the equipment would cause too much disruption. I suspect they will not be the last rejections in the area.

Source: www.proactiveinvestors.co.uk

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