From Bloomberg News:
The U.K. said fields of shale gas in northern England are twice as large as previously estimated, offering the potential to boost economic growth, replace depleted North Sea deposits and cut energy imports.
The shale rocks under counties including Lancashire and Yorkshire may hold as much as 1,300 trillion cubic feet of gas, Treasury Chief Secretary Danny Alexander said in parliament today, citing the British Geological Survey. While only a fraction of that gas will be extracted, a recovery rate of 10 percent, similar to fields in the U.S., would give the U.K. enough gas to meet demand for about 47 years.
The government is pushing for shale exploration to replicate the boom in U.S. gas output that’s cut energy costs and boosted economic growth. To win support for drilling, which requires the controversial technique of hydraulic fracturing, local communities will be offered a share of production revenue, the British Broadcasting Corp. reported today.
“Today’s news from the British Geological Survey confirms the huge potential that shale gas has here in the U.K.,” Alexander told lawmakers while laying out plans to boost economic growth. “The plans we set out today provide the framework to kick-start this industry.”
Explorers Cuadrilla Resources Ltd., IGas Energy Plc (IGAS) (IGAS) and Dart Energy Ltd. (DTE) have licenses in the area known as the Bowland Basin in northern England.
Using a 10 percent extraction rate for the figures published today would add 130 trillion cubic feet to the U.K. proved reserves, putting it ahead of Norway as Europe’s largest holder of the commodity. Proved gas reserves in the U.K. were estimated at 8.7 trillion cubic feet last year, while Norway has 73.8 trillion cubic feet, according to BP Plc.
Cuadrilla this month agreed to sell a stake in its Bowland licenses to Centrica Plc (CNA), the U.K.’s largest supplier of energy to households. Chaired by former BP Chief Executive Officer John Browne, Cuadrilla has delayed exploratory drilling until next year to carry out environmental impact assessments. The studies were demanded by campaigners concerned drilling will contaminate water as well as create traffic and noise pollution.
Britain ended an 18-month moratorium on hydraulic fracturing, or fracking, in December after two tremors in 2011 were caused by Cuadrilla’s drilling near Blackpool in Lancashire. The technique uses water, sand and chemicals to blast underground rock to release trapped fuel. The practice is banned in countries such as France.
“The idea that shale gas is going to get the economy moving again is groundless,” Lawrence Carter, an energy campaigner at Greenpeace, said in a statement today. “Even if they do manage to get some gas out, the fracking industry’s own research reveals that production won’t reach meaningful levels until the next decade.”
Developing U.K. shale could cut the nation’s import bill in half and create thousands of jobs, according to a report by the Institute of Directors last month.
Today’s estimate for U.K. resources is twice as large as the 623 trillion cubic feet of resources made by the U.S. Energy Information Administration in a global survey earlier this month. It estimated the U.K.’s recoverable reserves may be 26 trillion cubic feet.
To encourage investment in renewable energy, Alexander announced guaranteed prices for power from wind farms of 155 pounds ($237) a megawatt-hour, about three times the current market rate. He also said government financial guarantees would be provided for a new nuclear power plant at Hinkley Point in southwest England.