Britain Is Sitting On A £1.5 Trillion Shale Gas Goldmine
Britain is sitting on a £1.5 trillion shale gas bonanza that could be worth more than the remaining North Sea gas. The amount is bigger than previously thought and would potentially bring energy price stability and independence from imports for decades.
Although only about ten per cent of the gas is in unpopulated areas suitable for extraction, it would still be worth £150 billion.
The level of untapped shale gas will be confirmed next month in a study by the British Geological Survey, commissioned by the Department of Energy and Climate Change, according to industry sources.
Ministers are then likely to give the go-ahead for drilling, hoping the enormous economic benefits can win over environmental concerns.
But critics say the environmental cost is too high for ‘fracking’ – or hydraulic fracturing, the controversial method of extracting gas by forcing water, sand and chemicals at high pressure 6,000ft underground.
Pilot wells caused two earthquakes in Lancashire last year and green campaigners warn the method could contaminate the water supply.
US research also says that homeowners within two miles of a fracking site can expect property prices to plummet by almost a quarter.
Sources close to Energy Secretary Ed Davey said he was ‘quite excited about the prospect of a new domestic resource and probably wants to be able to exploit it, but it is quite a disruptive process and we need to go in with our eyes open’.
Although the shale gas reserves are unlikely to mean a fall in gas prices, there could be enough to prevent expected big increases for years.
Oil and gas experts are also hopeful about the high concentration of gas in UK rocks, which is richer than even US shale deposits and would require fewer wells.
The Coalition hopes that shale gas can transform the economy in the way North Sea oil did in the Eighties and Nineties. David Cameron has chaired a seminar to which he invited shale gas experts to come to Downing Street.
Meanwhile the Chancellor is considering a ‘generous new tax regime’ for drilling companies. Energy Minister John Hayes is expected to give the go-ahead for drilling, which has been suspended for the last year because of safety and environmental concerns.
Last year, Cuadrilla Resources suspended its drilling operations after fracking caused two small earthquakes near Blackpool.
A senior industry source with intimate knowledge of the BGS survey said: ‘When the survey announces the size of the reserve, it will be an enormous figure. The potential is that it will be a bigger number than the total recovery from the North Sea.’
Substantial recoverable gas could enhance Britain’s energy security, offset declining North Sea output and reduce import dependence.
About 70 per cent of the North Sea gas and oil reserves have been used up and in 20 years Britain will be dependent on gas from abroad – mainly Norway and Qatar.
However, only about ten per cent of the shale gas is available for commercial exploitation because much of it has been found in heavily populated areas, such as the North West, North Wales, Isle of Man, South Cumbria, East Midlands and the North East.