Last month Cuadrilla Resources, an oil & gas explorer, discovered what it described as ‘vast’ shale gas reserves in Northwest England near Blackpool.* At 200trn cubic feet, the scale of the find is certainly significant: even if only 10-20% is recoverable it could still meet UK annual demand for nearly a decade in itself. Some commentators are less optimistic, shale gas is unproven in Britain and environmentalists argue there are serious concerns about extraction techniques.
Proponents of shale gas argue the find has come at a vital time for the British economy, potentially providing jobs and tax receipts. Most importantly though, the discovery comes amid declines in indigenous North Sea production and retirement of generation capacity. Pointing to the US where vast shale gas finds have significantly boosted national reserves, advocates argue if repeated in the UK, it provides a new basis for cheap domestic supply well into the next decade.* At a time of rising energy prices and increasing dependency upon foreign supplies this is certainly an appealing prospect.
Whilst commentators underline the positive effects of shale gas on US domestic supplies, the energy source remains highly controversial. Banned within several American states, the most contentious aspect revolves around the extraction technique. Known as ‘fracking’, the process involves horizontal drilling deep into the rock layer before injecting high pressured liquids into the shale to release natural gas. Environmentalists argue that this threatens water supplies and may even be responsible for earth tremors.** True or not, authorities are highly responsive to such claims post-Deepwater Horizon. Other opposition centers around the carbon footprint left by natural gas at a time when massive investment in renewable generation is being encouraged to replace dirtier energy supply.
Invariably, the Blackpool find raises more questions than answers. For one, the regulatory framework around shale gas is in its infancy, although initial comments from the government suggest they are open to further discussion.** Cuadrilla believes it could flow gas from 2014, but there is sure to be fierce debate from both sides of the shale gas argument long before then.
Posted by Robin Macpherson on the 12th of October 2011
* ‘What the frack?’, The Economist, http://www.economist.com/node/21530995 1-Oct 2011
** ‘The potential for shale gas is worth exploration’, The Guardian, http://www.guardian.co.uk/environment/2011/sep/22/shale-gas-exploration?newsfeed=true 22-Sep 2011
