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 167.

    Why isn't this investment going on renewable, sustainable energy projects. Yes the yields may be lower but this proposal seems very short sighted and will ultimately have a shelf life!

    A good idea would be to develop a community dependant upon this industry then hang them out to dry in 10 years when the resource has been exploited. Welsh Valleys anyone?

  • rate this
    -2

    Comment number 166.

    Let us hope they find something soon.

    Wind turbines are a complete failure (producing little more that 0.5 of a gigawatt over the last few days from an installed capacity of over 8.5 gigawatt). With a daily UK demand of around 45 gigawatt, this will not keep the lights on and if we're decommissioning just about every other form of reliable and predictable energy generation, we're in a huge mess.

  • rate this
    -1

    Comment number 165.

    @83 Myself < cont....

    Ok look fusion is not fission, fusion is what happens in the sun, basically it involves atoms of hydrogen + helium cancelling each other out, this is a case of atomic annihilation, it produces huge amounts of raw energy, its radiological in nature, but produces zero nuclear waste and 8 to 10 reactors would power the UK, Shale gas and alternatives need not apply.

    cont...

  • rate this
    +2

    Comment number 164.

    So the community will get £100, 000 for every fracking well; and how much does every fracking company get for every fracking well that is dug? Fracking £500 million plus?

    Rip off Britain

  • rate this
    +4

    Comment number 163.

    131.U15599202

    "Has anyone seen 'Gasland'?"

    Yes and I would definately urge others to watch it as well.

  • rate this
    +5

    Comment number 162.

    If they drill for shale in your area, move away if you can as you're water may become toxic.

  • rate this
    -2

    Comment number 161.

    Let's do something different for a change - let's get on and do it!! Stop sitting on the fence and be positive

  • rate this
    0

    Comment number 160.

    What's the point of extracting it if there's nowhere to store it? There was nothing in Osborne's statement about building more gas storage facilities. What sort of storage have we got? A fortnight, how much has Germany got? 3 months! That's right, a winters' worth. No wonder we were 12 hours away from 'brownout' during the last cold weather. Bring back the CEGB, that did what Ofgem can't, sort it!

  • rate this
    +3

    Comment number 159.

    Insiders are already talking about a boom and bust regarding fracking, and that it resembles a ponzi scheme. The first in will benefit the most. U.S. gas production has already hit a production ceiling and is declining in many areas.The Energy Returned On Energy Invested (EROEI) ratio for fracked shale gas is a LOT lower than for conventional supplies -- up to 4:1.

  • rate this
    +5

    Comment number 158.

    45- Unless the chemicals used have been registered for their uses with either the HSE or ECHA, the EA/HSE will have to intervene & stop the operations for using chemicals that "uses" are not registered, i.e. REACH regulations, in 2017/16.
    Also, what measures are in place if there is seismic activity & it affects railways & any other infrastructure?
    too many variables that are unanswered for me.

  • rate this
    +4

    Comment number 157.

    Leave it in the ground! Please?
    Burning it will only add to the CO2 emissions - I thought we were trying to reduce those!
    Invest in renewable / nuclear instead.

  • rate this
    +3

    Comment number 156.

    The potential for job creation is huge across the next century.

    Probably 30 years in the fracking industry followed by decades in the environmental clean-up sector.

  • rate this
    -1

    Comment number 155.

  • Comment number 154.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +2

    Comment number 153.

    Does this mean we won't be further involved in Syria anymore?

    After all we are only trying to get the Russian-backed Syrian government to be toppled by the "rebels" (mostly mercenaries paid by Qatar and Saudi-supported jihadi groups) so that the same Qatar can build a pipeline through to the Mediterraneum to sell us their natural gas, making us less dependent on Russian gas.

    Maybe that's plan B?

  • rate this
    +2

    Comment number 152.

    Fracking is a proven technology, but is still in its infancy. There are issues that need to be considered, from the environment to health. I agree we as a nation are being strangled by increasing energy prices, but I hardly see us, the consumers, seeing the benefit of this "cheap resource" as it will almost certainly be pocketed by the Govt.

  • rate this
    +8

    Comment number 151.

    It all sounds fine and dandy doesn't it? Another massive resource right underneath our feet. What do we leave for future generations though? At this rate, an unstable, polluted environment drained of natural resources - worse than nothing... but as long as we're alright just now I suppose it doesn't matter does it?

  • rate this
    +9

    Comment number 150.

    How long before we sell this to France, then they can sell it back to us at over inflated price, its what we do best, kick ourselves in the nuts.

  • rate this
    +11

    Comment number 149.

    And who sponsord the British Geological Survey? A. The hydraulic fracturing industry, including Chevron, ConocoPhillips, Exxon, BG Group and Schlumberger.

    Mild earthquakes are one thing, the far greater threat is having our water supplies ruined for thousands of years.

  • rate this
    -2

    Comment number 148.

    As the EU dictates our use of coal or lack of, based on the woolly climate science bearing no regard of the costs to our economy. We are in the perverse situation of importing wood chippings to fire our older power stations as a stop gap from canada whilst we sit on one of Europe largest coal reserves.
    China's buildinfg them by the dozen whilst we sit on our thumbs.

 

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