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
    +4

    Comment number 367.

    Oh goody, more money for Gideon's mates. Think I'll celebrate with a Byron Burger Wot

  • rate this
    +2

    Comment number 366.

    As it seems that the shale gas won't be any cheaper for the consumer to buy, then we should not even consider fracking.

    If they wan't to give us cheaper gas then I am all for it.

  • rate this
    +7

    Comment number 365.

    surfingkenny@275
    "my 6 monthly bill for gas was £1300"

    In that case, your bill isn't the problem. You either use energy irresponsibly or you don't have enough energy saving measures.

    I spend less on energy than that every year and I am on an 'expensive' green electricity (only) tariff.

  • rate this
    +21

    Comment number 364.

    If shale gas is going to be such a bonanza , why the need for subsidy from the taxpayer?

  • rate this
    +7

    Comment number 363.

    Coincidence that Osborn announces road building at the same time Fracking is approved. The roads are purely to allow dirty big tankers and Tippers to charge around.
    Our money making it easier for corporations to make obscene profits, just like the give away of national industries in flotations that are still subsidized (Rail,etc).
    Sick of the Tories and their evil machinations.

  • rate this
    +6

    Comment number 362.

    @330.jgm2

    Scare tactics? Really? I suppose you weren't in the region when we felt both earthquakes? They scared the hell out of a lot of residents. Just because these two were minor in comparison doesn't mean that they will always be minor. especially if the fracking takes place near a known fault line that can potentially cause more damage.

  • rate this
    +10

    Comment number 361.

    Lets get one thing straight. The powers that be & energy suppliers don't want you to even be self sufficient with power! I have a mate who generates 60% of his power from renewables like solar. He would do the rest with a small water wheel in the fast running water at the back of his property but planners won't let him even though it's not going to affect anything else at all including the flow!

  • rate this
    -3

    Comment number 360.

    Lets get on the case with this and invest in a good infastructure to maximise return, then maybe we can stop of wasting billions of pounds messing around in Middle East conflicts that nobody in the UK actually cares about!!

  • rate this
    -3

    Comment number 359.

    Fracking won't happen as their are far too many NIMBYs in this country and it will be those same NIMBYs who will then go on to complain about high energy costs.

    The people get the economy they deserve.

  • rate this
    +3

    Comment number 358.

    Great! More money for the energy companies, don't they get enough already. If the bill that lands on my may every months gets cheaper or it boosts our economy then I will be happy. They will find a way to increase our energy bills (cost of the drilling etc etc)

  • rate this
    0

    Comment number 357.

    Thanks Ex Tory Voter for measured
    contributions!

  • rate this
    0

    Comment number 356.

    Fracking must be a good idea, bribery is openly being offered via the usual planning system to bribe ordinary people not to object. The rich always take all the planning gain in value for doing nothing. Get ON my land at housing permission price levels! It is an act of genocide to build on any green field land. Starving people to death somewhere in the world just for the rich to get richer.

  • rate this
    -3

    Comment number 355.

    We need to get on with extracting our gas bonanza ASAP. The rewards for communities are jobs and energy security.
    Any further delays will result in more excluded people suffering and dying because of energy shortages and further national economic decline due to a lack of economic development.
    Bribes for communities are really irrelevant.

  • rate this
    0

    Comment number 354.

    HMG now tells us how wonderful yet another source of CO2 causing fossil fuels is and how it will help the UK. It is clear from this that they no longer believe in the whole CO2, global warming, must reduce our pollution story.
    This is good, because now we can stop subsidising wind farms, solar parks et al, reverse the scrapping of our coal stations, reduce environmental taxes and grow the economy

  • rate this
    -1

    Comment number 353.

    Our country is in a situation where it can be held to ransom by oil and gas market prices, we have to find alternatives (even short term 30 years) that will buy more time to develop safe clean fuel systems. What I would say is the government system is failing by not ensuring the country has a shareholder interest in the industry to create more income and provide a direct input to methods used.

  • rate this
    -1

    Comment number 352.

    The fracking reserves travel right down through the heart of England to Kent. We hardly have the space of Texas to play with here. You would need 10s of thousands of fracking pads to operate and extract the full reserve. The emissions from the operation would be immense, let alone the surface water pollution. A clear strategy to dealing with this,and a review of the environmental hazards is needed

  • rate this
    +2

    Comment number 351.

    Westminster recently decided that the welsh govt wasn't to have power generation devolution for this exact reason there are vast reserves under south wales and they want their friends and party donors to have every penny this resource should be extracted by a nationalised company then sold to private interests we the citizens should profit not multinational tax avoiding friends of the tory party

  • rate this
    +3

    Comment number 350.

    @ 330 jgm2

    You obviously don't live near any of these fracking sites. they had a test site near Blackpool andeveryone felt the earthquakes there. They might not be big enough to make your house collapse but they are certainly big enough to be felt without the need for any specialist equipment.

  • rate this
    -1

    Comment number 349.

    Cubic feet ??
    Did we ever go metric ?

  • rate this
    -2

    Comment number 348.

    Go for it!
    Only by lowering the cost of energy can the world afford to tackle environmental issues - and this does not mean lowering CO2 emissions at vast cost. Current evidence is only 0.5C by 2100 and much of this is natural warming.
    As a physicist with some understanding of economics, the stupidity of spending on wind farms and solar etc astounds me.

 

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