The French oil behemoth Total will reveal a sizable $50 million investment in British shale tomorrow, in what many are calling a “vote of confidence” on the UK’s shale prospects. Total is keen on tapping some of the UK’s estimated 1.3 quadrillion cubic feet of shale gas, and as the FT reports, will explore two areas in east England for natural gas trapped in shale:
Total will pay $1.6m to acquire a 40 per cent stake in two exploration licences in the Gainsborough Trough, a geological basin in Lincolnshire, east England, thought to be rich in gas. […]As part of the deal to be announced on Monday, Total will commit to funding a $45m exploration programme in the two licence areas, which cover 250 sq km.
David Cameron has made strong overtures towards beefing up domestic shale operations, but local opposition has so far stymied his efforts so far. But 10 Downing has fashioned a workaround to this NIMBY-ism: drilling companies will now have to pay affected communities £100,000 for their troubles, and 1 percent of the revenue generated from whatever gas they find.On the balance of things, fracking is a net positive for the UK. Drilling for shale gas won’t increase the country’s emissions, and could help offset stagnating oil production in the North Sea. That, in turn, could help bring down rising heating bills that have quickly become one of the most contentious issues for British pols and households alike. Even the Church of England has voiced its support for fracking in Britain.Europe is far, far behind the United States when it comes to shale gas, and there are a number of reasons why it will have trouble replicated American success, but its failure to at least explore its shale reserves is confounding its economic and green ambitions. Total’s investment could be a sign of better things to come for Europe, and is certainly good news for Britain.[UPDATED]