Brace yourself Britain, it may be bonanza time. A small firm claims to have made a “world-class” discovery in southeast England—of up to 100 billion barrels of oil. The FT reports:
Shares in UK Oil & Gas Investments, an Aim-traded oil exploration firm, leapt 220 per cent on Thursday after the company estimated that the Weald Basin had total oil of 158m barrels a square mile, far outreaching previous geological estimates funded by the British government.
The company claimed to have discovered a “world-class potential resource” in a 650ft section some 3000 to 5000ft below the ground after drilling into the Weald Basin at Horse Hill, near Gatwick airport in Surrey.
If 100 billion barrels of oil sounds like a lot, that’s because it is, but both the company and analysts have been quick to caution that only a small fraction of these reserves will likely be recoverable (the company itself estimates a recovery rate between 3 and 15 percent). Still, if these initial estimates are borne out, it’s an extraordinary discovery, and with North Sea production rapidly declining will come as a well-timed boon for British energy security.
But the fact that these reserves are onshore is sure to set off a Not-In-My-Backyard fight of possibly unprecedented proportions. John Kemp writes for Reuters:
Onshore oil and gas production touches a raw nerve in Britain, where it pits exploration firms against environmental groups worried about climate change and the industrialisation of the landscape.
It also plays into the country’s north/south political divisions, and even exposes internal tensions between the Conservative Party’s pro-business wing and its supporters in rural southern England. […]
It immediately raises the prospect of thousands of wells being drilled across the landscape of some of the wealthiest parts of the country.
Local protests have already hamstrung the UK’s attempts to tap prodigious onshore shale gas reserves, and they’ll surely figure into the exploration of this new finding. But whatever difficulties these NIMBY protestors pose, or however large or small the ultimate recovery rate of this discovery is, the fact that it’s new (and so potentially large!) is significant. Malthusians warned of peak oil years ago, and yet new technologies and further exploration have uncovered more crude than those Chicken Littles could have imagined.