How much shale gas has the UK got?
How much shale gas lies under the surface of the UK – and how much will be extracted over the next two decades? Over the weekend the Independent claimed that more than 60 per cent of the UK countryside could be exploited for shale gas – a statement the Department for Energy and Climate Change (DECC) dismissed as “nonsense”. So what does the data show?
The question is particularly relevant this week as the chancellor George Osborne is due to announce the government’s gas generation strategy as part of this Thursday’s autumn budget statement. And according to the Financial Times, he will support a greater expansion of gas fired power stations than previously expected. The media are also reporting that Osborne will create a new office for shale gas to ” co-ordinate and speed up production” – as well as a new “generous” tax regime to stimulate investment.
Exploiting 64 per cent of Britain?
Parts of the media have frequently discussed how much shale gas the UK will be able to exploit – and how quickly – and they haven’t been shy of making some wild estimates. On Saturday the front page of the Independent added another number to the mix, claiming:
“More than 60 per cent of the British countryside could be exploited for shale gas, government documents show”.
But in response, DECC says:
“It is too early to assess the potential for shale gas but the suggestion more than 60 per cent of the UK countryside could be exploited is nonsense.”
So who’s right?
The 64 per cent claim comes from analysis by environmental group Greenpeace, using a report on the shale gas resources in the UK, published by DECC in 2011. Figure 2 of the report looks like this:
Image - Screen Shot 2012-12-04 At 13.02.25 (note)
The pink area shows the area that may be offered to companies for exploitation as part of the 14th onshore Oil and Gas Licensing Round. This is the latest in a series of competitions where the government invites companies to apply for licences. Greenpeace calculated the figure of 64 per cent by working out what proportion of England – not Britain, as the Independent claims – the pink area covers.
A spokesperson from DECC told us that the map merely “reflected the geological map of the UK that could have the potential for shale gas”, and there is a “large difference [in] what could be commercially and technically recovered”. In other words, the map doesn’t tell us much about how much shale gas the UK has got, although it does tell us where it might end up being extracted from. As Greenpeace’s EnergyDesk says:
“The data doesn’t suggest that 64% or even a fraction of that area will actually be exploited for shale.”
How much shale gas – and how quickly? Some caveats
DECC has commissioned the British Geological Survey (BGS) to estimate the UK’s onshore shale gas reserves, a figure DECC says will be released next year. The Independent is right on one point – rumour has it BGS’s new estimate will be considerably higher than previous figures suggest.
It’s worth pointing out, however, that high estimated shale gas reserves don’t necessarily mean it will be technically possible – or economically viable – to extract all of it. The Economist has suggested, for example, that the UK’s most prominent shale gas company, Cuadrilla, may only be able to recover 10 to 20 per cent of the 200 trillion cubic feet UK shale gas find it announced last year.
Expert opinion also seems to indicate that prospects for significant European shale gas production over the next decade are limited. And Ed Davey seems similarly circumspect about shale gas in the UK. He told the Guardian recently:
“I hope we will be able to produce a lot, but in terms of big production of shale gas it is going to take years. […] Sometimes you listen to some of the commentators and they seem to think you can just turn shale gas on.”
If, as some newspapers are reporting, Osborne announces this week that the UK will need 30 new new gas-fired power stations by 2030, or even that half of our power could come from gas by 2030, then this is a point worth bearing in mind. Shale gas produced elsewhere in the world may drive down international gas prices, but relying on the UK unconventional gas industry to bring down domestic wholesale prices may be a risky bet.