Buy

Books
Click images for more details

Twitter
Support

 

Recent comments
Recent posts
Currently discussing
Links

A few sites I've stumbled across recently....

Powered by Squarespace
« Swords at dawn | Main | Myles Allen on Berlin's two concepts of liberty »
Sunday
May202012

Shale gas dropped?

The Independent is reporting that shale gas is not seen as a solution to the UK's energy crisis.

The Government has rejected shale gas technology as a solution to Britain's energy crisis, conceding it will do little to cut bills or keep the lights on.

Supporters of the fracking technology – which blasts water, sand and chemicals at extreme pressures to release gas trapped deep in rock – argue it could be the single greatest factor in transforming Britain's energy market, reducing our reliance on foreign imports and dramatically reducing costs.

But The Independent on Sunday has learned that industry experts made clear at a meeting attended by senior ministers, including David Cameron and Ed Davey, the Lib Dem energy secretary, that the UK's reserves were smaller than first thought and could be uneconomical to extract.

I must say, I would treat this report with caution. I think this is just a somewhat hyped version of the story about the Downing Street seminar that I published a few days ago.

(H/T Martin)

PrintView Printer Friendly Version

Reader Comments (65)

Clearly, we need to know who the experts were and what report they tabled.

May 20, 2012 at 9:28 AM | Unregistered CommenterRob Schneider

I've already FOI'd number ten for that information.

May 20, 2012 at 9:33 AM | Registered CommenterBishop Hill

Could it be that the "industry experts" who cast doubt on the prospects for a shale gas industry in Britain are really just a bunch of greenies who don't want any interference with their plans for covering the country with wind turbines and taxing industry and car usage out of existence?

A completely different picture was painted just over a week ago in an article that cites people actually involved in the gas industry and the UK Geological Survey.

Americans in talks to join rush for UK's shale gas 'frontier', 12 May 2012.

Read more: http://www.thisismoney.co.uk/money/markets/article-2143460/Americans-talks-join-rush-UKs-shale-gas-frontier.html#ixzz1vOhK3FbR

"America's Breitling Oil & Gas, a specialist at extracting gas by the controversial fracking method, has held talks with Cuadrilla Resources about mining gas from the shale under Blackpool."

"‘We reckon there could be a thousand trillion cubic feet of gas in the UK, but it will take about eight to ten years to start to exploit it. The UK is still a frontier play.’"

"According to Cuadrilla boss Mark Miller, gas production could be under way as early as 2014. The company, which says it has discovered more natural gas trapped in shale rock in the North-West than Iraq’s entire reserves, can start work only if it gets the go-ahead from the Government."

"Energy experts from the British Geological Survey believe the country has enough shale gas to catapult Britain to the top rank of global producers. And while production costs are still high, new US technology should eventually make reserves commercially viable."

"The survey found that UK offshore reserves of shale gas could exceed one thousand trillion cubic feet – five times the estimate of onshore shale gas of 200trillion cubic feet. The UK’s yearly gas usage is 3.5trillion cubic feet. Even the lower estimate would put the UK in the top 20 nations for shale gas reserves, but the higher estimate would put Britain in the same league as China, America and Argentina, according to current estimates."

May 20, 2012 at 9:47 AM | Unregistered CommenterRoy

Independent; "In 2010, a British Geological Survey estimated that, based on experience in the US, UK shales could hold 150 billion cubic metres of gas, equivalent to roughly two years' of UK demand."

Something very wrong with their numbers. Typo or disinformation?

May 20, 2012 at 9:56 AM | Unregistered Commentersimpleseekeraftertruth

The Independant is part of the BBC and Guardian triangle of socialistic control so this is probably their wet dream.

Mailman

May 20, 2012 at 10:06 AM | Unregistered CommenterMailman

"that the UK's reserves were smaller than first thought and could be uneconomical to extract."

So, on that basis, no one is even going to be allowed to try? That is the pioneering spirit all right!

I note the Bish's caveat that this may be a non-story but it has an entirely familiar ring to it..that is.. our Government deciding what is best for us and that is that.

Tell me again why we do not rise up and slaughter them all?

May 20, 2012 at 10:08 AM | Unregistered CommenterJack Savage

With gas pices in the US five times lower than Europe, due to the glut of shale gas, they are now considering using some of the idle LNG import terminals completed just a few years ago to liquify and export their own natural gas. With such low gas prices it is becoming uneconomic to drill new shale gas wells, so there is a glut of machinery in the US and the exploration companies are looking to use it in other regions such as Latin America and Asia Pacific where there are great opportunities. Clearly the 'experts' who visited No. 10 haven't a clue on this subject. It is clear that Europe will be left behind in exploiting this new technology, and that industry and consumers will suffer as a result.

May 20, 2012 at 10:13 AM | Unregistered CommenterWellers

> I've already FOI'd number ten for that information.

Bish, do you have a ball park idea how long they'll take to answer?

If they're basing this on advice from greenpeace etc this needs to be widely publicised.

Someone pointed out that the States' recent economic growth is based largely on a large reduction in energy bills!

We could do with some of that.

May 20, 2012 at 10:20 AM | Unregistered CommenterNial

For those who haven't yet read it, this article by Matt Ridley on the GWPF website is worth a look:

The Shale Gas Shock

May 20, 2012 at 10:58 AM | Unregistered CommenterGeoff Shorten

Political correspondent Matt Chorley also reports:

http://www.independent.co.uk/environment/green-living/cameron-to-view-revived-severn-barrage-plan-7768852.html

May 20, 2012 at 11:07 AM | Unregistered Commenternot banned yet

The Independent on Sunday has learned

Yeah, right, sounds impressive like that. They mean they have read the parliamentary questions transcript too. The Independent doesn't add anything to what the Bish himself pointed out from the answer to Graham Stringer. The extra speculation in the reporting looks more like a standard example of the wishful thinking of the enviro-loons at the Indy; there could be an element of official government softening up of the public in there too though - preparing us for the blow that reveals the final utter uselessness of these gimps in power.

May 20, 2012 at 11:08 AM | Registered CommenterThe Leopard In The Basement

"could be uneconomical to extract" could also mean, get ready to hand over some subsidies to help us solve your problem.

May 20, 2012 at 11:09 AM | Unregistered CommenterRobin

litb - check Matt Chorley's other story today on the new "private-money-only" Severn Barrage proposal. (link in moderation)

May 20, 2012 at 11:19 AM | Unregistered Commenternot banned yet

nby

litb - check Matt Chorley's other story today on the new "private-money-only" Severn Barrage proposal.

Yes I had a look, I agree it provides an interesting contrast. Mmmm, £30bn of totally unique infrastructure on a huge physical scale and it wont cost the public a penny or have huge enviro risks? If Cameron believes that and yet still plays down fracking as a dead end then I will finally throw my hands up and accept we have gone through the looking glass into la la land! Wake me up!

May 20, 2012 at 11:39 AM | Registered CommenterThe Leopard In The Basement

"Peter Hain, who served in the cabinets of both Tony Blair and Gordon Brown, quit the Labour front bench to head the campaign to get the barrage built. He has offered to pilot legislation through parliament."

What can one say? "How kind"??

May 20, 2012 at 11:47 AM | Unregistered Commenternot banned yet

If shale gas is to be made a no-go because of the middle-class eco guilt trip, then wind isn't too popular with the punters -- a survey in the DT about subsidies for wind is currently polling 415-27 (93%) against.

May 20, 2012 at 11:55 AM | Unregistered CommenterRick Bradford

Now that DECC has put the shale gas argument has been put out of the way, for the moment, other news, Nuclear deals being negotiated will cause a £200 rise in bills - generation cost will be around 2 -3 times conventional generation, that makes it about the same as wind, does that sound like they are using wind cost as a baseline on how much they can subsidise Nuclear.

Because we have pipelines under the North Sea linking europe should Poland/Ukraine develop their fields it is expected that gas prices would drop here as well.

Bet that won't be mentioned in the DECC draft bill next week.


And DECC to publish the draft bill this week.

May 20, 2012 at 12:05 PM | Unregistered CommenterFrankSW

From the Telegraph article ""The reserves aren't absolutely huge compared with the likes of America, Ukraine and North Africa" said a senior government source."
2 of those regions are half a continent, for crying out loud. Of course we may have less than they do.
This reeks of a purely political decision being heavily spun.

May 20, 2012 at 12:12 PM | Unregistered CommenterAlex

Severn barrage

This letter was sent to the Telegraph 3rd October 2007

"Sir - Thirty-five years ago I asked one of Britain's leading power engineers about the prospects of a Severn barrage.

He said that any projections of its output were speculative because the estuary's high tidal energies were believed to be a product of the shape of the estuary. Change the shape and you might lose as much as a metre of tide. Another metre might be lost with the build up of the silt which characterises the Severn-Wye estuary, and a barrage would require more hardcore than was readily available in Britain.

Assuming that the Sustainable Development Commission (report, October 2) now has clear and positive answers to those problems, a barrage costing £15 billion which (apart from periods of slack tides) might generate around five per cent of our electricity, still seems a desperately poor bargain.

Five per cent is around 2,250MWe – approximately the output of Sizewell PWR nuclear station. And £15 billion is rather more than five times what Sizewell cost.

David Green, Castle Morris, Pembrokeshire"

I am also sure that I once read a letter from an engineer to the Telegraph when this idea was last being debated that it would require more hardcore than existed in the whole of Europe. I was never able to verify and could not find it today. But on any reckoning, it would need a lot!

So apart from the massive amount of CO2 that its building would generate, and the doubled cost in only 5 years, all of these experts have missed the obvious problem that this source of "renewable" energy shares with the sun, the wind and waves. It is only available for part of a day - about 4-6 hours - so will need 5% of Britain's energy generation to back it up. Worse, those hours change through the year.

How many gas powered stations could be built quickly using cheap shale gas for £30 billion?

Regards

Paul

May 20, 2012 at 12:46 PM | Unregistered CommenterPaul Maynard

Just watched the 'Sunday Politics' show on BBC1 during which Ed Davey (Secretary of State for DECC)was interviewed by Andrew Neil. Not doubt eventually it will appear on teh BBC iPlayer

http://www.bbc.co.uk/programmes/franchises/p00ly0k7

The costs of on and off shore wind power generation where discussed as well as future options for nuclear power and shale gas.

After waching this programme I'm now convinced that its time to leave the UK as soon a spposible as we are economy as bad as it already is is about to be 'f****d'. Soem of us had hoped that commonsense woudl prevail at some point but its now patently obvious that commonsense is never going to be applied when it comes to energy policy in the UK.

Why?

Because our Secretary of State for Energy and Climate Change doesn't even know whatthe costs of on and off shore wind power generation our despite being shown figures by Andrw neil form DECC's own consultants. He still thinks EDF will buld a new nucear power plant at Hinkley Point with any governmet subsidies (as these are all reserved for on and off shore wind projects) and worst of all he is followingthe advice of global companies like Shell and Sclumberger who are underplaying the contribution UK shale gas can make to keeping down/reducing gas prices in the UK.

The fact is we no longer own our UK energy industry. It is ALL now effectively owned by hedge fund mamanegrs and foreign investors all of whom have NO incentive in reducing our energy bills. They already have a nice 'mutual beneficial' relationship establsished between themselves and the UK government in which the UK consumer doesn't matter.

All that matters to them is that they maintain control of their market, make guaranteed profits, a proportion of which, they then 'kick back' to the UK government through corporation/energy taxes. The UK government already know we are 'f****d' and knows that it can't do anything about this even if it had the guts to do so IMo it will continue to contribute to the collapse of the UK economy as in reality it doesn't give a toss. They know that when the 'sh*t eventually hits the fan' they'll have already moved all their money and investments off-shore and will be the first to board the lifeboats while the rest of us a caged up in the decks below.

KevinUK

May 20, 2012 at 1:02 PM | Unregistered CommenterKevinUK

Reuters 17th April.

"UK offshore reserves of shale gas could exceed one thousand trillion cubic feet (tcf), compared to current rates of UK gas consumption of 3.5 tcf a year, or five times the latest estimate of onshore shale gas of 200 trillion cubic feet."

"There will be a lot more offshore shale gas and oil resources than onshore," Nigel Smith, subsurface geologist and geophysicist at the British Geological Survey (BGS) said. UK offshore reserves could be five to 10 times as high as onshore, said.

Someones telling porkies. I myself would trust the BGS estimate.

http://uk.reuters.com/article/2012/04/17/uk-britain-shale-reserves-idUKBRE83G0KS20120417

May 20, 2012 at 1:07 PM | Unregistered CommenterThe filthy Engineer

A report last year to the US Congress estimated shale gas reserves for much, but not all, of the world. The UK share was relatively small, smaller than France and much smaller than Poland, but significant relative to UK demand. After their experience with the sudden addition of North Sea taxes, rolled back with a year, I imagine any business involved with extracting oil or gas in the UK would approach this country with caution - especially considering the political domination of the green agenda. There will be easier pickings elsewhere.

Meanwhile this may be real, or it may be not so subtle green propaganda to discourage exploration and extraction of shale gas. It probably also reflects a battle behind the scenes.

May 20, 2012 at 1:12 PM | Unregistered Commenteroldtimer

I have not read the full article, so apologies but is it not the case that the only reason why the politicians/experts are arguing that shale gas is not the answer to the energy crisis/cheap energy is that they are insisting on bolting on carbon capture. I am sure that I recently read that if a generating station is to use shale gas then it MUST also employ carbon capture. As we all know, carbon caption is an unproven technology and if it could be made to work it would be extremely expensive. This oiffsets the savings that would otherwise ensue from the use of shale gas.

If fracking and shale gas exploitation was to be pursued in the same manner as the US and if there were no restrictions on its use (ie., no need to contemporaneously employ carbon capture). it truly would be a cheap source of energy and a a game changer.

As others have noted gas price in the US is about 1/5th that in the UK. It is at a 10 year low. There is a glut of gas in the US since they are not big gas users. Generally, heating of houses is not by way of gas, unlike the UK.. The US needs to build more gas powered generating stations and are thinking of using gas for transport needs, particularly lorries. Of course that means running out new infrastructure with a network of gas stations. Lorries can have bigger tanks and the goods distributing centres could have their own gas supplies fillling the lorries with gas at the same time as stuffing the truck with goods.

The politicians in the UK are crazy not to fully exploit shale gas. This is exactly what the UK economy needs, without restrictions being imposed by bolting on carbon capture.

You cannot have a sensible economic policy without a sensible energy policy. If the UK is to compete in the international market (and that really means the BRIC area, since Europe will be a depressed market for at least the next 10 to 20 years), the UK needs cheap energy. Given the cap on wages and the squeezed family budget, heaven knows the consumer could greatly benefit from a reduction in house hold energy bills. This would put more money in the pockets of consumers and help create a consumer led recovery. Instead, the politicians are too tied to the green agenda, and are hell bent on destroying the UK economy and driving up energy prices which is a double whammy.

If the UK politicians were bold, and were to prioritise shale gas exploitation, we could steal a competitive march over Germany. Germany is very tied to the Greens and it's energy policy is in disarray with the closure of its Nuclear plants. This presents the UK with a golden opportunity to once more recapture its industrial and manufacturing heritage. WAKE UP politicans WAKE UP.

May 20, 2012 at 1:26 PM | Unregistered Commenterrichard verney

o/t but my recent letter to my MP about what pressure the Govt is exerting on water companies to maintain supplies in a situation where rainfall, just below long-term average, can mean the groundwater levels in Herts are at an all-time low, received an answer. The Govt's answer is a desalination plant! In a country with lots of rainfall. This Government will always get the wrong answer.

May 20, 2012 at 1:37 PM | Unregistered Commenterdiogenes

March 7 (Bloomberg) -- Marvin Odum, president of North American operations for Royal Dutch Shell Plc, talks with Bloomberg's Bradley Olson about the potential impact of natural-gas production on U.S. economic growth. Odum, speaking at CERAWeek, a Houston conference held by IHS Cambridge Energy Research Associates, said Shell is seeking ways to use natural gas to produce chemicals, plastics and fuel for transportation. (Source: Bloomberg)

"http://www.bloomberg.com/video/87921660/"

US natural gas prices to soar, says Shell

"http://www.ft.com/cms/s/0/741d32c4-a012-11e1-90f3-00144feabdc0.html"

FWIW my impression is that the players in shale would like to see the price rise.

Ps - according to Wikipedia, La Rance broke even after 20 years. Anybody got a figure for a gas fired CCGT 300MW power station?

May 20, 2012 at 1:38 PM | Unregistered Commenternot banned yet

diogenes - did they provide the supporting justification including technical feasibilty, costings and capacity?

If not, please can you request it as a follow up along with details of the alternatives they considered?

May 20, 2012 at 1:44 PM | Unregistered Commenternot banned yet

Paul,oldtimer,Kevin,Richard - comment with links in moderation.

Bish - please can you make your captcha easier to read?

[BH adds: Why don't you register for the site? Then you can bypass captcha completely]

May 20, 2012 at 1:47 PM | Unregistered Commenternot banned yet

Are these not the experts in the field that are referred to?


The Prime Minister convened the Downing Street summit to hear from companies including Shell, Centrica and Schlumberger, which have been working on shale gas projects in America and exploring the potential of supplies in Ukraine and China.

I await with interest for the energy report.

May 20, 2012 at 2:02 PM | Registered CommenterLord Beaverbrook

As a resident of Ontario I can confirm my gas bill has been going down rapidly over the last couple of years. Not bad considering this is a region that gets to -40c and an annual average of 7metres of snow.

Any savings have been cancelled out by the electricity cost, which has been on the opposite trajectory due to expensive wind and solar projects and the associated feed in tariff costs - ten times the cost of traditional sources.

May 20, 2012 at 2:30 PM | Unregistered CommenterJud

This does indeed look like a leak being pushed by Ed Davey, partly confirmed that he said the same on the sunday politics an hour ago. As a LibDem he is presumably following his predecessor, Chris Huhne's, promise that he would stifle the shale gas industry.

I will believe this story when some of the "shale gas industry" representatives do publicly say that they were a representative cross section of that industry & that they did say that the reserves were smaller than they had said and that they did desperately need more government restraints. So far this has not happened.

May 20, 2012 at 2:39 PM | Unregistered CommenterNeil Craig

While I detest the political ideology that DECC has long been saddled with by successive governments, down in the basement they still have some professionals doing sound solid science. Their 40 page report on onshore UK shale gas potential is comprehensive, well written and gives an excellent overview of the richness maturity and distribution of all the potential shale formations that may have commercial potential.

http://og.decc.gov.uk/assets/og/bo/onshore-paper/uk-onshore-shalegas.pdf

The outlook is encouraging, but I dont ever see future gas prices through rose-tinted glasses, purely from well cost payback economics considerations, even without the inevitable and predictable additional politically added fossil fuel burdens.

May 20, 2012 at 3:14 PM | Registered CommenterPharos

Nick Grealy over at nohotair.co.uk posts a lot of good info about Shale. follow this link:

http://www.nohotair.co.uk/gas-guru-blog/shale-gas-2012/166-shale-gas/2513-cuadrilla-s-numbers-in-detail

for proof that Cuadrillas Bowland play is bigger than any US play ^.^

May 20, 2012 at 3:16 PM | Unregistered CommenterDung

Bish - Ok - will register and hit the tip jar. Thanks for the work you do.

Pharos - DECC has been around that long:

http://en.wikipedia.org/wiki/Department_of_Energy_and_Climate_Change

Current priorities and "business plan" are here:

http://www.decc.gov.uk/en/content/cms/about/our_goals/our_goals.aspx

May 20, 2012 at 3:29 PM | Unregistered Commenternot banned yet

Should read: "DECC hasn't been around that long"

May 20, 2012 at 3:32 PM | Unregistered Commenternot banned yet

industry experts made clear at a meeting attended by senior ministers, including David Cameron and Ed Davey, the Lib Dem energy secretary, that the UK's reserves were smaller than first thought and could be uneconomical to extract.

I know nothing about anything. But I am going to broach the possibility that a) the article gives a basically accurate account of what ministers were told, b) that what they were told is correct, and c) that "conceding [shale] will do little to cut bills or keep the lights on" was the correct response by the ministers. It seems to be roughly in line with what we've heard from sources like Arthur Berman, Heading Out and "Vangel" on this blog - and no-one seems to have stepped up to seriously contest what those sources are saying. The first time I noticed this was actually when his Grace linked to Matt Ridley's report on shale gas for the GWPF. Ridley raised Berman's relatively gloomy analysis of the prospects for shale - and then didn't contest Berman's accuracy at all (though he did go on to produce what seems to be a very strange interpretation of what Berman actually said). As far as I can tell, hopes that shale gas will indeed turn out to be a "game-changer" now rely on future technologies creating a fairly dramatic reduction in the (actual, all-in) cost of production. And, well ... you could entertain similar hopes about, for example, future solar-cell efficiencies, but it doesn't seem wise to base your energy plans for the next 10 year or so on those hopes ...

May 20, 2012 at 3:37 PM | Unregistered Commenteranonym

anonym

You have no clue what is going on.
It is really sad to see that the "cant do" negativism that ruins our lives even exists here on Bishop Hill.

May 20, 2012 at 3:40 PM | Registered CommenterDung

DECC used to be the DTI and before that the DEn

http://en.wikipedia.org/wiki/United_Kingdom_Department_of_Energy

May 20, 2012 at 3:45 PM | Registered CommenterPharos

@dung

Okay. What is wrong with, for example, Heading Out's assesment, then? Where can I find someone who will give me a better, more reliable assessment? I hear lots of bluster and speculation about ulterior motives, but nothing that looks like a specific rebuttal.

May 20, 2012 at 3:48 PM | Unregistered Commenteranonym

@anonym

The link you gave was to a report that was over a year old, in the world outside the USA shale is something that changes almost daily.
I gave a link earlier, here it is again:

http://www.nohotair.co.uk/gas-guru-blog/shale-gas-2012/166-shale-gas/2513-cuadrilla-s-numbers-in-detail

That should give you some idea of either how ill informed or how stupid our apparent energy policy is.
It is also the case that BG signed a deal over a year ago with the USA to take
billions of cubic feet of shale gas every year for a period of 25 years. This is not an independent adviser!
The world is near to drowning in fossil fuel energy at the moment but here in the good old UK we have to use energy saving lighbulbs, doh!
There is a shale oil play in Wyoming called Green Rivers that contains 3 trillion barrels of oil, of which about 50% should be recoverable with "current" technology. 1.5 trillion barrels of oil is more than the currently known world resources of oil.
The USA and Japan have just completed a trial run of extracting natural gas from Methane Hydrates, they had gas flow for 31 days and then stopped the test (success). Every part of the world has Methane Hydrate deposits. It is estimated that the world has more Methane Hydrate deposits than all other fossil fuels added together.

May 20, 2012 at 4:31 PM | Registered CommenterDung

In addition to the oild and gas situation, the world has the technology to build nuclear power plants based on Thorium rather than Uranium. The resulting waste has a half life measured in hundreds of years, not hundreds of thousands of years. Known deposits of Thorium are greater than Uranium and Australia has bucket loads of the stuff.

May 20, 2012 at 4:43 PM | Registered CommenterDung

Ed Davey was on the Sunday Politics show today being interviewed by Andrew Neil. I only caught the last couple of minutes but Neil seemed to be getting at Davey as he seemed flustered. The "experts" attending No 10 were from Shell and Centrica plus others according to Davey. He said Shale Gas reserves in China were potentailly a benefit - not for the UK of course, he was clearly making reference to Chinas emmissions. Apparently the message was Shale Gas is another source of energy but not a game changer. Davey concentrated on "tight regulation" and "energy mix" and his final killer remark was "meet our (UK) climate emission targets". Clearly he was against it and I think Neil knew it.
I'll check back on BBC iPlayer to view the whole thing later.

May 20, 2012 at 4:48 PM | Unregistered CommenterMactheknife

@Mac

The irony is that the exctraction of Natural gas from Methane Hydrates is achieved by "fracking" using CO2 so go exploit Methane hydrates and bury your CO2 at the same time hehe.

May 20, 2012 at 4:53 PM | Registered CommenterDung

Anonym:
"And, well ... you could entertain similar hopes about, for example, future solar-cell efficiencies, but it doesn't seem wise to base your energy plans for the next 10 year or so on those hopes ..."

-I wouldn't pin much hope on those. Efficiency is limited by well founded theoretical considerations. The even more widely understood facts about the amount of sunshine we get in the UK is another nail in the coffin of a large contribution from solar cells.

When I start to go through the motions of potential yields per square metre and then compare with land prices per square metre [at a low-ish discount rate], then only unused land [and roof tops, but with higher installation costs] look attractive.
That is, if electricity generated cannot pay the interest costs of acquiring the necessary land to use for electricity generation, then it won't happen, even if the PV cells are 100% efficient.

May 20, 2012 at 4:57 PM | Unregistered Commentermichael hart

The report I referred to earlier can be found here:
http://www.eia.gov/analysis/studies/worldshalegas/
It was produced in April 2011, so it will now be out of date and was described as an initial assessment. In the European context the UK potential was estimated to be relatively small. If this report is to be believed, there is no shortage of technically recoverable shale gas resources put at 6622 trillion cubic feet worldwide, excluding Russia it should be noted. Of this total the UK resource was estimated at 20 trillion cubic feet.

The DECC report,linked above by Pharos, estimated 5.3 TCF. It also commented that the USA is about 20-30 years ahead of everyone else in developing and using the relevant technologies; that does not mean it will take that long to catch up in the UK if the will and politcal and tax conditions existed - after all the BG Group is one of the major players in the USA.

That DECC estimate will be an underestimate, based on the recent AJLucas report on Bowland here:
http://www.asx.com.au/asxpdf/20120510/pdf/4265zmjsb9n7g2.pdf
...dated 10 May 2012

May 20, 2012 at 6:16 PM | Unregistered Commenteroldtimer

Cost of energy? Up. Cost of production? Up. Competitiveness? Down.

May 20, 2012 at 6:31 PM | Unregistered CommenterGeorge Steiner

Dung, oldtimer:

The AJ Lucas presentation suggests that there's lots of shale Gas Initially In Place in the UK. However, the controversy over the economics of shale is about the proportion of gas which is actually recoverable at market prices, and whether the US shale drilling operations are actually profitable. Presumably the very high resource density number presented by Cuadrilla for Bowland is a good sign in that respect. But Lucas' presentation seems to go out of the way not only to give no estimates of Bowland's likely actual production or cost of production, but to avoid mentioning any such figures for US fields which could be used for comparison. It's great that 22% of Bowland's estimated GIIP is 10 years of UK gas demand, but the very next sentence more or less acknowledges that Bowland is unlikely to actually produce that much. Similarly it's great that US gas prices have dropped so much, but as a response to claims that shale fields are running at a loss it begs the question.

May 20, 2012 at 7:26 PM | Unregistered Commenteranonym

Market price for gas in the UK is about $10/$11 per million BTU as opposed to $2.66 in the USA.
Bowland is just one part of one shale deposit in the UK, there are huge deposits elsewhere.
Cuadrilla's estimate is that they have enough recoverable shale gas for 60 years of UK demand in their area, why would they exaggerate since they only get paid for what they can produce?
Why are you so negative Mr Anonym?

May 20, 2012 at 7:40 PM | Unregistered CommenterDung

It's too bad that you Brits need to wait for your government to develop a national policy with respect to fracking natural gas before businesses are allow to drill a well on private land and see what comes out. There is a legitimate need to protect aquifers used for drinking water and ensure proper disposal of water water, but this is not rocket science and sensible rules already exists for handling most of these issues.

May 20, 2012 at 8:09 PM | Unregistered CommenterFrank

oldtimer

Thanks for the link to the AJ Lucas presentation slides. But please be aware that their quoted volumetric gas figures are GIIP =Gas initially in place. On slide16 their RF (recoverable factor) is stated as ?%, so AJ Lucas are not really estimating recoverable reserves at all. This is possibly in the range (I am guessing wildly here) of single figure to at best 10's or 20's percentage. There is a whole hierarchy of technical definitions for proven, probable and possible technically recoverable reserves, depending on appraisal drilling, flow testing, rig and licence terms and costs, operational and maintenance costs, deliverability profile, abandonment costs and above all market pipeline tariff and gas contract price. One other problem. Traditionally gas producers have to offer a peak load high swing factor for periods of peak demand. This is a tough ask of steep productivity decline shale gas wells vs conventional gas wells.

May 20, 2012 at 8:39 PM | Unregistered CommenterPharos

This smells like a political fix.
It just makes no sense to back off without even some prelim exploration to find out what is actually under the ground.
Obviously abundant, cheap gas would put a huge spoke in the wheel for wind, solar, nuke, etc..
Perhaps they could sidestep by going offshore. Last week there was a programme about a gas rig in the Norwegian sector carrying out a fracking operation, apparently it is routine practise.

May 20, 2012 at 8:47 PM | Unregistered CommenterMikeH

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>