The UK's only company engaged in fracking is closing one of its five exploration sites, citing environmental concerns about wintering birds.
Cuadrilla will abandon its exploration of the Anna's Road site in Lancashire and restore it to green fields. The site was acquired in 2009 and opened in 2011. But the company's permission to explore there was dependent on its impact on migrating birds, including pink-footed geese and whooper swans.
It is the latest in a series of setbacks for the company, which is the only business to have used modern hydraulic fracturing technology on British soil. Fracking has been associated with air and water pollution, radioactive waste and the despoliation of vast tracts of land, as well as methane emissions, in the US, where it was pioneered. Regulators in the UK say laws here are much tougher.
The company said it would seek new sites that did not have such problems. Earlier this year, it commissioned an environmental impact assessment on the effect of drilling on wintering birds.
For much of the summer, Cuadrilla was in the spotlight because of protests at its site in Balcombe, West Sussex, where fracking has not yet started, but could next year if tests suggest it is needed to yield oil at the site, and if local authority permits are forthcoming. Its activities in Lancashire have received much less attention.
By February this year, Cuadrilla had already spent at least £100m in the UK. That figure is likely to be considerably greater now, but the company declined to say how much it has now invested. The company has yet to yield any gas or oil in the UK. Cuadrilla has indicated it will seek new sites for fracking, both in Lancashire and elsewhere.
Cuadrilla's progress in the UK has been beset with problems. At the only site the company has so far managed to frack, the activities caused two small earthquakes in early 2011. These caused the company to suspend operations and prompted a government review. In the course of the investigations, it emerged that the casing of the fracking well had been deformed, perhaps by one of the tremors but possibly because of other issues. It was later revealed by the Guardian that Cuadrilla had failed to inform government authorities for several months that the company's engineers knew the well had been deformed. No gas or fluids leaked as a result of the damage. The company also repeatedly trespassed on private land during geological surveys.
Cuadrilla is chaired by former BP chief Lord Browne, who is also a partner at Riverstone, the company's main venture capital backer. Lord Browne told the Guardian earlier this year that the backers would invest "whatever it takes" to make Cuadrilla a success.
Cuadrilla is understood to have known from its initial investment in Anna's Road that migrating birds were a potential problem, and in spring this year took the decision to delay work pending an environmental assessment. Cuadrilla told the Guardian the site had been chosen because it was "geologically promising". The Bowland shale, reckoned by the British Geological Society to hold enough gas to power the UK for decades, if it can be profitably extracted, extends over much of Lancashire. The company is currently looking at up to six new sites for potential fracking.
Helen Rimmer, campaigner for Friends of the Earth, said: "Cuadrilla may have pulled the plug on one of its Lancashire sites, but the fracking threat has not gone away. The firm still plans to drill shale gas wells at other sites across the country. There is huge local opposition to David Cameron's plans to make Blackpool the fracking capital of Europe. With experts warning that shale gas won't lead to cheaper fuel bills and fresh scientific warnings about the impact of fossil fuels on our climate, we need new solutions to Britain's energy challenges."