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
    -3

    Comment number 427.

    126.Raz
    Missing the point?

    Fracking has caused so many Problems in America. It can pollute underground water supplies, it is known to be dangerous to the local communities where it "mined"
    Even if the engineering problems were fixed, fracking will still allow greenhouse gases to pump into our atmosphere, which is bad for public health and drives global warming.

  • rate this
    +1

    Comment number 426.

    What a complete wally Osborne is...local communities???

  • rate this
    +2

    Comment number 425.

    "Countries that fail to develop localised, sustainable, low energy economies" - no such thing as a modern low energy economy

    "maintain an energy dependent society" - society has been energy dependent since the industrial revolution

    "may be condemming their grandchildren to a life of unimaginable danger" - or they may not, you are overplaying it somewhat

  • rate this
    +1

    Comment number 424.

    Looks like a few northerners will be extremely happy that in a few years there will still be a North/South economic divide, just switched round 180 degrees. Independence north of the Wash anyone?

  • rate this
    -2

    Comment number 423.

    Blimey the pro fracking lobby are out in force today it seems!

  • rate this
    0

    Comment number 422.

    Man made carbon emissions creates global warming.

    Now man made earthquakes.

    What next I wonder?

  • rate this
    +17

    Comment number 421.

    The critics may be right that this won't cut the cost of gas. But it will generate tax income, it will help our balance of payments and it won't make CO2 production worse because we will be burning gas in power stations for some time to come. All in all, worth doing provided we don't poison ourselves in the process.

  • rate this
    +1

    Comment number 420.

    If Gideon's offering your local authority a £100k one off payment what he's actually saying is take this but he, his Party and their Energy Company sponsors won't help you if it all goes wrong.

    Mind you, by the time it all goes wrong they'll be out of office and blaming Labour and the Union's and the poor and the sick and anyone not on 40% tax

  • rate this
    -4

    Comment number 419.

    We should welcome fracking with open arms. The problems with water contanination are overblown. We have enough legislation in place to ensure this doesn't happen. It will help towards energy security, help lower energy prices, be less instrusive on the countryside vs windfarms, less polluting in terms of emissions than coal and buys us time to move towards a low carbon future. Whats not to like?

  • rate this
    +6

    Comment number 418.

    No doubt the contracts will all be insider deals and the price fixed so we as the consumer continue to be ripped off.
    We have massive coal reserves and clean burning power stations but because of the AGW agenda they have been cancelled or closed down and billions spent on ineffective "Green energy" instead.
    We have the reserves for cheap affordable energy but instead we are dependant and extorted.

  • rate this
    +3

    Comment number 417.

    399 cont

    Examples: Gravity is observed. In 1688 Isaac Newton gave an explanation which became the accepted theory until 1915 when Einstein came up with a better "Theory". Despite being tested to destruction GR remains a "theory" that best explains the fact of gravity.

    Evolution is an observed fact. (Neo)Darwinism of evolution by natural selection is the best explanation of the fact of evolution.

  • rate this
    +8

    Comment number 416.

    We're getting desperate, oil production is at or near it's peak and will decline in a few years, renewables are expensive and have a limited lifespan, nuclear is very controversial. Now shale gas has come along, it has a low EROEI, possibly causes seismic problems and pollution plus the wells have a very short lifespan, so new ones need constantly drilling, hence expensive
    Answer? Cut use Quickly

  • rate this
    +6

    Comment number 415.

    405.Dave
    "I know i am wrong but wouldnt it be nice if they just kept this gas for domestic use only, and ensured that it was extracted and sold by British companies who were not allowed to be sold off to the foreign vultures.."
    ///
    You've hit the nail on the head.

    The drive for short term corporate profit is why we have so many unemployed and why we'll not benefit from lower energy bills

  • rate this
    0

    Comment number 414.

    377.Fly in the ointment
    Personally, i am looking forward to the power rationing and the occasional power cuts

    Yes, it will be fun to watch billions being wiped off the UK economy. I'm particularly looking forward to the food shortages when our economic output drops and our trading position weakens. A back-to-basics lifestyle could probably feed about half our population, so that's fine then.

  • rate this
    +11

    Comment number 413.

    So let me get this straight. A controversial method of extracting gas *might* produce enough to run the country for about 40 years. But it's OK because any disruption, pollution and earthquakes will be in rural areas nowhere near London. Just like the pointless Tory trainset.

    Can we just build a wall around our beloved capital/independent city state and leave it to rot please.

  • rate this
    +2

    Comment number 412.

    396.
    Definition of a scientific theory:

    "A scientific theory summarizes a hypothesis or group of hypotheses that have been supported with repeated testing. If enough evidence accumulates to support a hypothesis, it moves to the next step—known as a theory—in the scientific method and becomes accepted as a valid explanation of a phenomenon."

    Learn more about science before you dismiss it.

  • rate this
    +10

    Comment number 411.

    @396.Kirkhillman

    I prefer to listen to the people who already live with it around them who were also promised this & that about it but then found out when it was all too late that it's usually extremely destructive to everything in the fracking area!

  • rate this
    +4

    Comment number 410.

    Hah! Cheaper bills eh?! I doubt it, it's all a load of "shale gas" just think about it, I can remember the queen switching on Calder hall and being promised cheap energy, North Sea gas, ditto! The only one's who'll benefit are the French! Wait for the clear up costs, the tax payer will incur

  • rate this
    +9

    Comment number 409.

    Does anyone remember the BBC News online article a couple of weeks ago titled 'Whats wrong with the Weather' ? well heres a clue in this one.

    Enjoy.

  • rate this
    +2

    Comment number 408.

    How will the "infrastructure" construction and energy jobs help our economy when across the country as a whole its women and the aged population that can not find suitable, skilled work?

    In 2006 (the heady days of the last boom) I was involved with a major construction project in the NW. Each JSA applicant in the area was known to the site manager but refused to work so we used Polish labour

 

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