After Shale Gas, Now For Tight Oil
The politics of tight oil will make the rows over shale gas pale into insignificance
Readers will be familiar with the issue of shale gas - its potential to change the world energy market and the controversies surrounding its development. But you might be less familiar with tight oil – oil from shale rock which can also be extracted by hydraulic fracturing. That is the next story and its development particularly in the UK will be every bit as controversial. Even the publication of the initial basic survey of the resources in place is being held up by political nervousness.
Tight oil has been developed very successfully in the US, transforming the North American energy market and raising the serious prospect that the region could be self-sufficient within a matter of years. Oil production in the US has risen as a result by 3m barrels a day over the last six years. But tight oil is not limited to the US. There are significant resources in numerous countries around the world according to an authoritative study published by the US Energy Information Administration last year. In most cases no serious analysis has been done, either of the rocks or of the costs of development. But technology has advanced very quickly in the US and could easily be exported. Much has been learnt about ways of overcoming the obvious challenges of fracking such as water requirements. A few countries like France (which has its own very substantial tight oil resource base) might continue to resist fracking on principle, but across the world development is likely to spread. If only a limited proportion of the tight oil reserves in place can be developed the market – regionally and even globally – could be transformed. Additional supplies will reduce the market power of the currently dominant suppliers such as Saudi Arabia. Depending on the volumes available prices could fall, or at least be constrained.
The exploration and development of shale gas and tight oil takes time, but step by step the potential is being understood. The latest step forward in that process is taking place in the UK where the British Geological Survey has recently completed its initial survey of the Weald Basin – an area of the south of England roughly covering Sussex, Hampshire, Kent and Surrey. The area already has numerous tiny oil fields, produced by conventional technology. Kent used to have substantial coal production and to the west in the Wessex Basin lies the largest onshore oil field in Europe – Wytch Farm. The existence of shale rock has long been well known and now fracking offers the prospect of the oil that rock contains being developed.
Its important to stress that much work still needs to be done. The BGS survey is based on existing available evidence – there has not been any fracking to test the rocks. That will come next, and will be the responsibility of the private sector.
At this stage the issue of concern is that the report, commissioned by the Department of Energy and Climate Change, has not been published. There have leaks to the press just as there were when the BGS completed its study of the Bowland area in the north of England. Those leaks proved to be very accurate. Reports of the study of the Weald suggest that the potential is very high – comparable according to one source to a third of the volume of oil in the North Sea.
You might well ask the reason for the delay in publication. Is the DECC doubtful about the quality of work? Are they going to second guess the BGS numbers? And if so, on what basis since the BGS is the UK’s leading authority on such matters which is why they were asked to do the work in the first place.
SEA and licensed areas. Source: DECC