The UK may have twice as much shale gas as previously thought, according to a new report. The British Geological Survey estimates that the UK may have 1,300 trillion cubic feet (Tcf) of shale gas, up from 623 Tcf in a previous EIA report. Even more encouraging, the British government released a slate of reforms aimed at facilitating the development of the resource, which few countries besides the US have successfully exploited up to now. The BBC reports:
[The reforms] 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.
Figuring out how to compensate communities for local drilling is a huge step towards realizing the UK’s shale potential; it helps overcome the NIMBY mentality that can stop energy development in its tracks. And an easier permitting process will encourage more exploratory well drilling of the shale fields in the north of England.The BBC is right to note that the amount of shale gas technically recoverable is much less than the 1,300 Tcf reported. It posits a recovery rate of 10 percent, which would yield only 130 Tcf of shale gas; the EIA estimates that just 4.2 percent of that is technically recoverable, which would bring the UK’s recoverable shale gas down further to 54 Tcf. That’s because the UK’s geology is “considerably more complex” than America’s wedding cake rock layering, and the costs of drilling wells there are “considerably higher.” But even using the most pessimistic estimate, Britain will still have a glut of gas that is “far in excess of the three trillion cubic feet of gas currently consumed in the UK each year.”Europe has been slow to embrace shale, and its consumers and industry are both hurting because of it. The US is poaching business from energy-intensive industrial sectors looking to take advantage of America’s bargain-basement shale gas prices. The UK has far smaller shale resources than its former colony, but they are still substantial. It would be foolish not to embrace them as has its partner across the pond.
[Oil rig image courtesy of Shutterstock]