Michael Bradshaw, Warwick Business School, is Professor of Global Energy, and researches shale gas in the UK…
Professor Michael Bradshaw said: “The reality is that to meet our carbon budgets we will need to move away from natural gas in the 2030s. In this context, I would suggest that the Government should not count on there being significant shale gas production in the UK and should design a post-Brexit gas strategy that is compatible with its wider energy policy goals of security, affordability and sustainability.
“The industry still maintains that by operating 400 well pads it could create around 64,000 jobs and reduce future import dependence by half. But, the reality is that it is currently facing multiple ‘above ground’ challenges trying to drill the wells that could prove Professor Underhill wrong in his prediction that the geology will disappoint. Even if they are drilled and gas flows, it is by no means certain that the cost of production will make the resources commercially viable. The world is on the brink of a glut of natural gas that could last well into the 2020s and it may prove much cheaper to import the gas we need.
“To date we only have ‘gas-in-place’ estimates from the British Geological Survey that suggest there is a substantial amount of gas in the rocks of the Bowland-Hodder formation across Northern England and a much more modest resource across the Midland Valley of Scotland. Those estimates came with a huge health warning that actual reserves estimates could not be made until there had been sufficient exploration and that even then the economics of production would be difficult to assess.
“Whether the ‘rocks will work’, as the industry puts it, is fundamental to whether there will be commercial shale gas production in the UK. The Polish experience is one of US technologies and techniques being applied to a different geology and failing to yield commercial production.
“The present danger facing the nascent shale gas industry in the UK today is that they are struggling to drill the wells necessary to determine if there is a commercial prospect. Today, horizontal drilling and hydraulic fracturing is essentially banned in Wales and Northern Ireland as the devolved Governments have determined to block planning permission and in Scotland drilling is suspended whilst the Scottish Government undertakes an extensive public consultation. It is currently swamped with responses, but is expected to reach a decision this autumn. One senses that they are likely to conclude that the size of the prize is not worth the public upset. Thus, it is only in England that companies can seek permission to explore and drill for unconventional oil and gas.”
Email: Michael.Bradshaw@wbs.ac.uk
