A welcome ray of sunshine
02 January 2013
The decision by the UK Government to resume shale oil exploration and exploitation is a welcome ray of sunshine in an otherwise overcast energy landscape. Attempts to exploit unconventional gas in Lancashire through fracking, which uses high-pressure liquid to split rock and extract gas, were put on hold 18 months ago after the process caused two small earthquakes near Blackpool.
Although UK fracking pioneer Cuadrilla Resources is probably being overoptimistic in its estimate of 5.7 trillion cubic metres of technically recoverable gas in Lancashire alone, the successful development of an onshore unconventional gas resource could be a powerful factor in keeping UK energy costs down, if the US experience is anything to go by, and replacing declining North Sea oil and gas production.
The Treasury has already signalled its support for the budding industry, proposing tax relief for shale gas and unveiling a gas generation strategy, steps similar to those taken to encourage North Sea production which have proven particularly successful. But the Government will also have to make good on its promises to ensure strict environmental monitoring of the companies involved.
Any polluted aquifer or significant seismic event in our overcrowded islands would stop the industry dead in its tracks, which would be a potential blow both for the country’s future energy security and for the economy.
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