UK shale gas resources 'greater than thought'

 

Osborne: "Local communities should get, for example, at least £100,000 for every fracking well that is created"

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UK shale gas resources may be far greater than previously thought, a report for the government says.

The British Geological Survey estimates there may be 1,300 trillion cubic feet of shale gas present in the north of England - double previous estimates.

Meanwhile the government has announced measures to enable shale gas drilling as part of its infrastructure plans.

Energy Minister Michael Fallon described shale gas as "an exciting new energy resource".

The BGS said its estimate for shale gas resources in the Bowland Basin region, which stretches from Cheshire to Yorkshire, represented potential resources, but "not the gas that might be possible to extract".

"Shale gas clearly has potential in Britain but it will require geological and engineering expertise, investment and protection of the environment," it said.

Drilling companies have previously estimated that they may be able to extract around 10% of this gas - equivalent to around 130 trillion cubic feet.

Shale gas map
'Early days'

If the estimates are proved correct, that would still suggest recoverable reserves of shale gas far in excess of the three trillion cubic feet of gas currently consumed in the UK each year.

Shale gas is extracted through "fracking" - the controversial process of freeing trapped gas by pumping in a mixture of water, sand and chemicals.

Analysis

The truly massive shale gas resource of the north of England may bring tax revenues and possibly - not definitely - lead to lower bills, but it won't help the environment.

This week the government's climate change advisers warned that the UK was failing to keep pace with legally binding cuts in the CO2 emissions that are disrupting the climate.

The Environment Agency warns that if we want to keep burning gas we will have to rely on unproven technology to capture the carbon emissions in order to meet climate change targets.

It also warns that gas escaping from fractured wells may increase climatic disruption.

Meanwhile the International Energy Agency warns that the world can only burn a third of its existing fossil fuel reserves without a serious risk of de-stabilising the climate.

Shale gas plans will meet local environmental opposition too.

The process has helped boost the domestic energy industry in the US in recent years, where oil production has risen and gas prices have plummeted.

In a statement, the Department of Energy and Climate Change said: "Though it is early days for shale in the UK, it has the potential to contribute to the UK's energy security, increase inward investment and growth."

The government has unveiled a package of reforms to encourage development in the industry.

They include new planning guidelines to make the process of approving new drilling sites more streamlined, and a consultation on tax incentives to encourage exploration.

Communities affected by shale gas drilling are also expected to receive £100,000 in "community benefits" and 1% of production revenues, should sites start producing gas.

"Shale gas represents an exciting new potential energy resource for the UK, and could play an important part in our energy mix," said Energy Minister Michael Fallon

"Development must be done in partnership with local people. We welcome the commitments from industry on community benefits.

"This will provide a welcome boost for communities who will host shale exploration and production as well as offering strong assurances that operators will engage with them and work to the highest health, safety and environmental standards."

fracking graphic

He said communities hosting shale gas drilling could benefit from cheaper bills, regeneration schemes and new community facilities like playgrounds and sports halls.

The incentives are designed to overcome significant scepticism surrounding the process of fracking, which has generated environmental concerns.

Critics argue that it can cause earth tremors and pollute water supplies, and that shale gas wells could blight the countryside and affect house prices.

They also want investment in green energy sources, rather than fossil fuels.

Labour's shadow energy minister, Tom Greatrex, conceded that gas would remain "an important part of our energy mix in the future".

But he dismissed the announcement of incentives as "a desperate attempt to draw attention away from the government's cuts to infrastructure investment... and its abject failure to get the economy growing".

Power warning

Currently the UK's shale industry remains in its infancy, with relatively small energy companies such as IGas and Cuadrilla until recently the only firms with licences to explore share gas resources.

Centrica, the owner of British Gas, announced its intention to buy a stake in one licence in the Bowland Basin owned by Cuadrilla earlier this month.

The report for the government comes as energy regulator Ofgem warned that the risks of power blackouts has increased because excess capacity in the power industry has fallen in the UK.

The watchdog has twice warned in recent months that the amount of spare power is shrinking, partly due to some gas generators being taken out of service.

Centrica has already withdrawn two of its gas plants from operation. In April, SSE confirmed that it too would mothball gas plants and put off investments in new ones.

Adam Scorer, of the lobby group Consumer Futures, said: "Projections of ever-tighter capacity margins understandably raise fears of higher electricity prices.

"Government and regulator need to agree on the most realistic capacity scenarios, the least-cost ways of reducing demand and, where necessary, of incentivising new generation capacity."

Announcing further details of the government's spending review to parliament, Treasury Secretary Danny Alexander said the government had agreed "strike prices" in an effort to boost investment in renewable forms of energy.

The prices mean the government will guarantee to pay a certain price for energy generated through on-shore and off-shore wind, tidal, wave, bio-mass and solar power.

 

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  • rate this
    +2

    Comment number 67.

    Watch Josh Fox's two 'Gasland' documentaries.

  • rate this
    -4

    Comment number 66.

    Global warming is not just about CO2 it’s about the additional heat we throw off into the atmosphere and by burning fossil fuels we are burning stored energy in addition to that of the sun. Solar energy on the other hand simply recycles the suns energy and reduces CO2 so why have they reduced the tariff?

  • rate this
    +4

    Comment number 65.

    Lining up a new job me thinks for himself

  • rate this
    -12

    Comment number 64.

    Now if wer could on stop the lunacy that is windmills and PV panels the UK would be one of the richest countries in the world. Problem is, with lunies like Harribo, they are going to destroy the beautiful countryside and wild life of the UK.*
    Thanks Harrabin !!

  • rate this
    +13

    Comment number 63.

    This is going to cause 1000x more long term damage than it solves. You wouldn't believe the problems that americans are going through with chemicals in their crops and water from fracking, earth quakes and polution as a result of their procedure. It's extremely expensive and the return on investments is very low. Better off investing in wind farms.

  • rate this
    0

    Comment number 62.

    Comments suggesting the North sea supply is running out, I don't agree with. It's availability however might be question. Better start production sooner, September 14h 2014 is coming.

  • rate this
    +59

    Comment number 61.

    this is what happens when the massive increases in gas/electricity bills are paid direct to shareholders instead of investing in infrastructure. THIS SYSTEM DOES NOT WORK. It provides dividends for the already rich and everyone else suffers. Fracking is dangerous and unproven it will damage the environment and poisons the water. Dont accept this 1% bribe, you and your children will suffer horribly

  • rate this
    +4

    Comment number 60.

    As this goldmine is apparently located entirely in Northern England and seems set to kick in just as the last drop of North Sea oil dribbles out of the pipe, it looks like a good time to start backing Scottish independence.

  • rate this
    +2

    Comment number 59.

    None of it can be burnt without burdening future generations with a massive climate change mortgage.

    I was quite neutral about this government when it first got in, but as the months and years have ticked by, they have been proven to be out and out liars.

  • rate this
    +3

    Comment number 58.

    They are conning us!

  • rate this
    +3

    Comment number 57.

    “but it is unclear how much could be extracted”
    “Our correspondent says gas flow rates from "fracked" wells tend to deteriorate significantly over their lifetime”
    Massive white elephant. A lot of the US projects are not viable, and only exist cause of the massive inward investment, ie a ponzi scheme.

  • rate this
    +5

    Comment number 56.

    Its funny how this story has come out at the exact same time we see stories about the UK struggling to meet the energy demands!

  • rate this
    0

    Comment number 55.

    Another way for the south of this country to rape the north for their own benefit

  • rate this
    +3

    Comment number 54.

    Finding a new source of energy should be good news. But because of the way we are governed, to favour business over the consumer, over the environment and always taking the least line of resistance to the profits it just means we'll be ripped off, the water table poisoned and global warming accelerated. Plus they wont invest in renewable energy for that much longer.

  • rate this
    -7

    Comment number 53.

    This is great news. Now that the AGW alarmists are looking foolish we would do well to remind them of the trouble they caused us once they start doom-mongering over this.

  • rate this
    +4

    Comment number 52.

    #5 regarding your final calculation/estimation - that's if we frack all of our shale gas in one year. But you make an excellent point. Even in your best case scenario, all my personal efforts to cut my carbon emissions will be completely futile if we begin frakking. Even more worrying is that we are not the only nation looking at doing this.

  • rate this
    +1

    Comment number 51.

    I am no big fan of fracking but being pragmatic I see a real need for the UK to produce our own fuel. Supplies from abraod will only get more expensive and we are open to interruptions if not downright blackmaill.

    We also need the huge influx of money and the jobs created will be more than welcome in the the Northwest & Yorkshire.

    And so on balance, right now we need to exploit this resource

  • rate this
    +35

    Comment number 50.

    It puts into perspective how inadequate we are as a species really. Our whole world and all life upon is is created and sustained by the energy from the Sun. Why are we having so much difficulty harnesing this free, unlimited natural resource, it is because it is free and unlimited i wonder?

  • rate this
    +2

    Comment number 49.

    I'm sure they'll find a way to stop the North benefiting from this in every way possible and making a couple of people in London richer.

  • rate this
    +2

    Comment number 48.

    Good. It's one piece of our energy mix. We should also be investing in renewables and new nuclear (Thorium) to provide us a stable mix of energy sources.

 

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