Fracking for shale gas in the UK: property and investment issues
| DOI | https://doi.org/10.1108/JPIF-04-2014-0022 |
| Date | 29 July 2014 |
| Published date | 29 July 2014 |
| Pages | 505-517 |
| Author | Peter Jones,Daphne Comfort,David Hillier |
| Subject Matter | Property management & built environment,Real estate & property,Property valuation & finance |
PRACTICE BRIEFING
Fracking for shale gas in the UK:
property and investment issues
Peter Jones and Daphne Comfort
Business School, University of Gloucestershire, Cheltenham, UK, and
David Hillier
Centre for Police Sciences, University of South Wales, Glamorgan, UK
Abstract
Purpose – Large-scale shale gas reserves have recently been identified under many parts of the UK.
Development pressure for detailed exploration and possibly the exploitation of these reserves by
hydraulic fracturing, popularly described as fracking is growing rapidly and seems to have UK
Government support. With this in mind the purpose of this paper is to offer a general review of the
possible development of shale gas reserves by fracking within the UK and to explore a number of
the property and investment issues associated with such development.
Design/methodology/approach – The briefing note begins with an outline of the characteristics of
shale oil and the fracking process and of the initial developments within the UK and discusses some of the
property and investment issues associated with such developments. The note is based upon information
drawn from the internet sources, principally national and local governments, property, financial and
environmental organisations and onvisits to a small number of sites of exploratory fracking.
Findings – The paper identifies a wide range of potential environmental impacts associated with the
development of shale gas reserves by fracking and reveals growing awareness in the UK that such
development could have a major impact on property values, on the availability of mortgages and
on property insurance. At the same time the paper also suggests that financial institutions are
increasingly taking steps to minimise risks to their investments and reputation from potential
environmental impacts.
Practical implications – The paper suggests a number of issues property managers and
consultants will need to address in monitoring the impact of shale gas development by fracking on
property values and it offers some guidelines to investment managers.
Originality/value – This paper provides an accessible review of the development of shale gas
resources by fracking within the UK and as such it will be of value to a range of property and
investment management professionals and to students pursuing property and investment courses.
Keywords Environmental impacts, Disclosure, Investments, Hydraulic fracturing (fracking),
Shale gas resources, Property values
Paper type General review
Introduction
The recent identification of potentially large shale gas reserves within the UK has
generated a mixed response. On the one hand there are claims that the future
commercial development of these resources could bring major economic benefits.
The UK Government, for example, “believes that shale gas has the potential to provide
the UK with greater energy security,g rowth and jobs” (Gov. UK, 2014a) and in a similar
vein the Institute of Directors (2013, p. 2) suggested that “shale gas could represent
a multi-billion pound investment, create tens of thousands of jobs, reduce imports,
generate significant tax revenues and support British manufacturing”. On the other
hand there is growing and vociferous opposition to the future development of shale gas
reserves by hydraulic fracturing, popularly known as fracking, because of a number of
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-578X.htm
Journal of Property Investment &
Finance
Vol.32 No. 5, 2014
pp. 505-517
rEmeraldGroup Publishing Limited
1463-578X
DOI 10.1108/JPIF-04-2014-0022
505
Fracking for
shale gas in
the UK
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