The big news of the weekend is the announcement that the Bowland Shale is even bigger than we thought.
The shale gas deposit around Blackpool is 50 per cent bigger than previously estimated, The Times has learnt. The news will put more pressure on ministers who are due to lift the ban on extraction as early as next week, to support what could prove to be a gas bonanza for Britain.
The news has, perhaps inevitably, prompted conflicting commentaries in the press. Nigel Lawson's article in the Mail is long and thorough, spelling out the both the technicalities and the geopolitical implications:
For decades, the West in general, and the U.S. in particular, has had to shape, and sometimes arguably to misshape, its foreign policy in the light of its dependence on Middle East oil and gas. No longer: that era is now over.
For decades, too, Europe has been fearful of the threat that Russia might cut off the gas supplies on which it has relied so heavily.
No longer: that era will very soon be over, too. Thanks to the shale gas revolution, the newfound energy independence of the West is a beneficent game-changer in terms of world politics as much as it is in the field of energy economics.
Andrew Rawnsley puts the arguments against. He reels off the usual environmentalist woo about earthquakes and fracking fluid, but also the real question over shale:
Then there is the huge hole at the heart of the frack-heads' dream. No one even knows yet how much shale gas can be profitably extracted. Estimates of the exploitable reserves vary wildly. In fact, no one can be sure whether it will be viable to get any of it at all out of the ground. Firms are only going to invest in shale gas if they will make some money out of it. That means they will want to be certain that the cost of extraction doesn't make shale gas uncompetitive against alternative forms of gas and other energy sources. Colin Smith, head of energy research at VTB Capital, tells me that there have been some 50 experimental wells across Europe to date. None – not a single one – appears to have flowed at a rate that would make them commercially viable. So while the frack-heads fantasise about a bonanza, the reality is that not so much as one cubic metre of shale gas has been profitably extracted anywhere in Europe.
The economics is of course what really counts here. Rawnsley bases his concern on shales in Europe being deeper and thinner than those in the USA. I think it's right that the Bowland shale is deeper, but the new announcement also suggests that it's actually a wider deposit than anything in the States. Nick Grealy tweeted yesterday that no shales of this thickness have ever proven to be unproductive. So we have plenty of cause for optimism.
And we should also note that the economics are not a reason for holding back those companies, like Cuadrilla, who want to try their luck. They'll stop soon enough if the geology and therefore the economics are against them.
Finally, we should note a sneaky bit of misleading by Rawnsley. He says:
So they were cheered when the chancellor paved the way for drilling by trailing tax breaks to incentivise the exploration of shale gas and announced a new regulatory outfit, the Office for Unconventional (Shale) Gas, dubbed Ofshag.
The tax breaks, are of course, the reduction in the supertax paid by oil companies (but not renewables firms). Rawnsley misleads his readers by not explaining this.
Nick Grealy is not gentle with Andrew Rawnsley here.