Large shale gas potential in the UK

Interesting news — according to this BBC article, the most recent British Geological Survey indicates that there may be twice the shale gas deposits in the UK that were previously anticipated. Such a large potential source of natural gas has substantial implications: “If the estimates are proved correct, that would still suggest recoverable reserves of shale gas far in excess of the three trillion cubic feet of gas currently consumed in the UK each year.”

One of the recent conversations in energy economics and policy has been around whether or not liquified natural gas (LNG) exports from the US would raise natural gas prices in the US. A big driver of the profit opportunity in LNG exports is the relative lack of exploitation of shale gas deposits in Europe, and the natural gas price differential between the US and Europe.

If UK energy companies can bring their shale gas to market, that changes the complexion of global LNG shipments.

UPDATE: I then go do my morning reading and find Tim Worstall commenting on the issue. He links to a Telegraph story that contextualizes the magnitude further by pointing out that even just extracting 10 percent could meet Britain’s anticipated natural gas demand for 40 years.

About these ads