Lancs shale to yield '15 years' of gas for UK
200 trillion cubic feet of gas will net £6bn in tax
The Cuadrilla Consortium has published its eagerly expected estimate of shale gas reserves in the North West of England. The group reckons it can extract 200 trillion cubic feet from sites near Preston and Liverpool – more than the current national estimates for Poland.
Assuming a 20 per cent recovery rate, that's enough to meet 15 years of UK demand from just 10 wells. The UK burned through 3.11 trillion cubic feet in 2009, according to the US Energy Information Administration. Current UK production is under 100 million cubic feet, so over 30 years, the North West could double the UK's gas production today.
A bonus would be £5bn to £6bn in UK tax revenue – and energy independence. Eighty per cent of EU member states' gas consumption is imported from Russia via the Ukraine.
There's plenty of room for skepticism – which is generally more about the speed with which the stuff can be extracted, rather than the economic value of the bonanza. The UK doesn't really do onshore gas, and the infrastructure is missing. The US energy market was dramatically transformed by shale, which now generates 20 per cent of its national consumption and has seen the gas price diverge from oil prices for the first time. But the US, with decades of onshore drilling, has scores of companies able to bid for crucial parts of the supply chain.
The UK, by contrast, has a defiantly "can't do" spirit. Environmentalists are the political establishment, and the UK's planning and regulatory regime are designed to make cheap fossil fuel innovation much much more expensive than it need be. ®