What are the potential reserves of shale gas in the UK?

Much interest and concern has been expressed about the potential for shale gas production in the UK, particularly because the country’s production of natural gas from conventional reserves no longer meets domestic demand (typically 70–80 billion cubic metres per year). Production, mostly from the North Sea reserves, reached a peak in 2000 and declined significantly up to about 2013. However, it is unclear how much shale gas exists in the UK that would be technically and economically viable to extract.

Four areas in the UK have been identified as potentially viable for the commercial extraction of shale gas: the Bowland-Hodder area in Northwest England, the Midland Valley in Scotland, the Weald Basin in Southern England, and the Wessex area in Southern England.

According to the British Geological Survey, initial estimates in 2013 suggested that the Bowland-Hodder area may have held between 23.3 and 64.6 trillion cubic metres (tcm), but a more recent analysis in 2019 suggested the figure is closer to 4.0 tcm. A 2014 study estimated that the Midland Valley hosts 1.4–3.8 tcm.

Given the uncertainties, it is difficult to produce a reliable estimate of the shale gas resources that are technically and economically viable to extract in the UK. The US Energy Information Administration estimated in 2013 that the UK had a total resource of 3.8 tcm of shale gas in Northern and Southern England, of which 0.7 tcm was unproved technically recoverable (which means it cannot be readily accessed, is not financially viable or its presence is assumed but not confirmed). The US EIA provided no estimate of the amount that might be both technically and economically recoverable.

A review published in March 2020 by Warwick Business School of a range of ‘resource estimates’ and production forecasts produced by the industry organisation UK Onshore Oil and Gas calculated that UK fracking might produce between 90 and 330 billion cubic metres (bcm) of natural gas between 2020 and 2050. Using future demand figures from National Grid, they calculated that could represent between 17 and 22 per cent of projected cumulative UK consumption over that period. However, the review made clear the high levels of uncertainty around all these numbers and the fact that we have no estimates of ‘proven reserve’ estimates on which to base commercial development.

What is the current status of fracking in the UK?

In November 2019, the UK Government announced that it would “take a presumption against issuing any further hydraulic fracturing consents” in England. It made its decision based on an investigation by the Oil and Gas Authority (now the North Sea Transition Authority) following the suspension of fracking operations at the Preston New Road site near Blackpool after a series of minor earth tremors. The Authority concluded: “For future operations, the possibility of larger events could not be excluded and these could cause damage and disturbance unacceptable under the current [Department for Business, Energy and Industrial Strategy] policy guidance.”

On 22 September 2022, the UK Government formally announced that it had lifted the moratorium on fracking. Alongside the announcement it published a review by the British Geological Survey of the scientific evidence on earth tremors associated with fracking. It pointed out that on average around 1% of fracking wells in the United States and Canada can be linked to earthquakes with magnitudes of 3 or greater. The report concluded that fracking “can trigger earthquakes large enough to cause structural damage”.

The Scottish Government introduced a moratorium on unconventional oil and gas, including shale gas, in January 2015, and confirmed its decision in October 2019. The Welsh Government confirmed in December 2018 that it would not grant licences for fracking.

What are the arguments for and against fracking in the UK?

Jobs

A range of arguments have been put forward in favour of fracking, including that it would generate new jobs and economic growth associated with shale gas production. A report in April 2014 by Ernst & Young for the UK Onshore Operators Group found that £33 billion investment would be required between 2016 and 2032 to establish 4,000 shale gas wells, which would generate 64,500 direct and indirect jobs (6,100 direct roles) at the peak, assuming production of more than 28 bcm per year by the 2020s.

A report by AMEC Environment & Infrastructure UK Limited for the then-Department of Energy and Climate Change, published in 2013, calculated that the onshore production of unconventional oil and gas, at its peak, could create between 16,000 and 32,000 jobs (direct, indirect and induced) under a high activity scenario with production of 120 to 240 bcm of gas over 20 years from up to 360 wells.

Security of gas supply

It has also been suggested that it would increase security of gas supply for the UK. Domestic production of natural gas from the UK continental shelf reached a peak in 2000 and declined significantly until 2012. The UK now imports about half of the natural gas it consumes for heating and electricity generation. The UK Oil and Gas Authority projected in September 2021 that UK production of natural gas (excluding shale gas) would decline from 34.9 bcm in 2020 to 8.9 bcm in 2035. The Warwick Business School study of March 2020 that calculated that UK production of shale gas could meet between 17 and 22 per cent of UK cumulative consumption between 2020 and 2050, stated that “should the UK wish to have a shale gas industry its role will be to mask the declining production of the UK [continental shelf] and displace a limited quantity of imports”. It added: “It will not be a UK shale gas revolution, but rather an exercise in slowing the increase in import dependence, thereby improving the UK’s Balance of Payments”.

Energy bills

Some have also suggested that UK shale gas production would reduce the cost of energy for UK consumers. However, this is based on the false assumption that UK shale gas would be sold significantly below the international market price for natural gas. A study published in March 2020 by Warwick Business School pointed out: “It is widely recognised that the open and liberal nature of the UK’s gas market means that the market price – the National Balancing Point (NBP) – is unlikely to be influenced by shale gas development.”

Emissions and climate action

It is not clear how shale gas production in the UK would affect greenhouse gas emissions. A study for the UK Government in 2013 indicated that the impact would be small if production was well-regulated, but also warned that global emissions could increase if imports of natural gas were only diverted to other consumers.

It has also been argued that the creation of a new shale gas industry in the UK could undermine international efforts to avoid dangerous climate change. In May 2021, the International Energy Agency published details of how the global energy system could reach net-zero emissions by 2050 and pointed out: “Beyond projects already committed as of 2021, there are no new oil and gas fields approved for development in our pathway, and no new coal mines or mine extensions are required.”

Other environmental impacts

Other arguments put forward against fracking include the risks of seismicity that prompted the current moratorium in England, following a report by the Oil and Gas Authority in November 2019. There are also concerns related to the contamination of aquifers, as well as pollution around fracking sites and from associated traffic. However, a joint study published in 2012 by the Royal Society and Royal Academy of Engineering concluded: “The health, safety and environmental risks associated with [fracking] as a means to extract shale gas can be managed effectively in the UK as long as operational best practices are implemented and enforced through regulation.”

Public support

An annual survey commissioned by the UK Department for Business, Energy and Industrial Strategy found that just 17 per cent of the UK public in autumn 2021 supported fracking.

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