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UK has vast shale gas reserves, geologists say

London, April 17, 2012

Britain may have enough offshore shale gas to catapult it into the top ranks of global producers, energy experts now believe, and while production costs are still very high, new US technology should eventually make reserves commercially viable.

UK offshore reserves of shale gas could exceed one trillion trillion cubic feet (tcf), compared to current rates of UK gas consumption of 3.5 tcf a year, or five times the latest estimate of onshore shale gas of 200 trillion cubic feet.

Reserves of 200 tcf would put the UK in the top 20 countries with the highest shale reserves, alongside Brazil, and 1,000 tcf would put Britain in the same league as estimates for China, the United States and Argentina, top dogs in global shale potential. 

Although there are still no reliable figures available for the UK, and only around 10-20 percent of total reserves are currently deemed recoverable, experts say that whatever the final recoverable reserve figure is, it is likely to be big enough to make Britain energy self-sufficient.

"There will be a lot more offshore shale gas and oil resources than onshore," Nigel Smith, subsurface geologist and geophysicist at the British Geological Survey (BGS) said. UK offshore reserves could be five to 10 times as high as onshore, said. 

On Tuesday, UK authorities gave approval to drill for shale gas onshore after a temporary ban on the controversial extraction technique known as hydraulic fracturing, or fracking.

Britain is well placed for offshore development with its North Sea oil and gas sector long established.

"We were pioneers in the North Sea with conventional oil and gas and the technology has gone around the world, so why not become one in the unconventional sector," Smith said.

Offshore geological information was already available, and superior to onshore shale reserves data, he said.

He told the British parliament's House of Commons shale gas energy and climate change committee that Britain could become energy self-sufficient if it went offshore with its unconventional oil and gas industry.

The parliamentary committee said that "we recommend that DECC encourage the development of the offshore shale gas industry in the UK, working with HM Treasury to explore the impacts of tax breaks to the sector."

European offshore shale boom?

Petroleum engineers say that shale oil and gas reserves of vast potential stretch over different formations across Europe.

"We have potentially huge volumes present in the subsurface - the volumes are mind-blowingly big," Melvyn Giles, global head of unconventional gas and light tight oil at Shell said of Europe's unconventional gas resources.

"The figures appear to suggest the shale resources are so large that the question is not how much is out there, but how much can be retrieved - how much can be economically accessed in an environmentally acceptable way," he added.

Shale is soft, finely stratified sedimentary rock that formed from consolidated mud or clay.

Hydraulic fracturing is the process of creating small cracks, or fractures, in underground rock formations as much as 7,700 metres below ground level to extract gas (and oil) from shale.

Scientists have known for years that shale and other common forms of rock in Europe held hydrocarbons, but until recently they were ignored as either insignificant or uneconomic.

Energy services company Schlumberger said in a research report that there are large shale gas and oil reserves in the North Sea - along the German, Dutch and Danish coasts - as well as in the Baltic Basin.

Geologists at other leading energy companies spoke on condition of anonymity due to the sensitive nature of the dramatically higher estimates, but a consensus of optimism about potential European reserves has grown in the hard-headed commercial sector.

Much of the development in Europe may focus offshore after onshore exploration hit setbacks when France and Bulgaria banned exploration over concerns about ground water pollution.

Poland, previously thought to be a European leaders, recently slashed its reserves estimates by 90 per cent.

An offshore future would avoid many of the legal and regulatory challenges that the industry faces in Europe.

Unlike in the United States, where mineral exploration rights are with the private property holder, most European law gives mineral exploitation rights to governments, which provides a serious obstacle to speedy development of onshore shale.

Legal procedures, bureaucracy and haggling over resource valuations can delay exploration and production indefinitely. In France, political opposition to fracking has brought a stop to development of the Paris shale basin. – Reuters




Tags: London | UK | offshore | natural gas | reserves | Shale oil |

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