Michael Giberson
Production of natural gas from shale has dramatically changed the U.S. energy resource picture, and although experience elsewhere is limited* it is increasingly obvious that this not just a North American story. Nick Grealy, at No Hot Air, considers the implications for the UK:
North American shale gas already has a significant indirect effect on UK, European and World Gas Prices. Even in the unlikely event that there are no UK shale plays, the UK, due to exposure to international market forces, will be in the position of benefiting from an acquired immunity which will provide low prices for natural gas for many years to come. Some observers believe that volatility will also ebb and that prices will be both low and stable.
A pair of recent No Hot Air posts emphasize the fallout from the changing gas market: “Gas v. Coal,” and “Gas as the new UK baseload.”
HT to FT:Energy Source, which provides complementary remarks: “LNG glut driving a UK baseload power shift.”
*Experience in the United States is limited, too, as extensive shale gas development began less than a decade ago. (That brief background is one reason significant uncertainty remains about the reliability of the new conventional wisdom about gas resources, at least in the minds of a few analysts. However, as one gas developer explained, the industry actually has years and years of experience drilling in and around shale formations. It isn’t as if the resource is unknown; it is just that it was not previously accessible and economic to develop.)