Six years after tremors halted fracking, Britain ready to try again
Not a lot of people think about where gas comes from and what happens if (Russian president Vladimir) Putin or others fall out with us. Francis Egan, CEO of Cuadrilla
LONDON: Six years after Britain’s first fracking operation was stymied by earth tremors, its shale gas industry is poised to try again with a technology that could transform the UK gas market and drastically reduce its reliance on imports.
While environmental and community concerns about fracking have not gone away, changes to the energy landscape since 2011 have added even more complexity to the effort to exploit Britain’s shale gas.
On the one hand, imports are cheaper, at least for now. Global liquefied natural gas (LNG) prices have more than halved from 2014 peaks as new supply from Australia and the United States saturated key Asian markets.
At the same time, last year’s vote to leave the European Union has stoked fears about the security of Britain’s energy supplies.
Britain’s main gas storage site is also due to close, which means the market may be vulnerable to price shocks over the winter months.
“Not a lot of people think about where gas comes from and what happens if (Russian president Vladimir) Putin or others fall out with us,” said Francis Egan, the CEO of shale gas developer Cuadrilla, the first company to attempt fracking in the UK, near Blackpool in the northwest of England.
“They only begin to think about that when the prices are going up,” he said.
Natural gas is used to heat as much as 80 per cent of British homes, which make up 35 per cent of demand, closely followed by electricity generation at 33 per cent and 17 per cent by industry, according to data from the Department for Business, Energy and Industrial Strategy (BEIS), which formulates energy policy.
Around 60 per cent of that gas is currently imported, up from 40 per cent less than 10 years ago. The figure is tipped to reach almost 95 per cent by 2040 as known reserves in the North Sea run out.
Pipelines with Norway and continental Europe, which can include gas from Russia, supply around 70 per cent of imports, with the remainder delivered via LNG tankers, mostly from Qatar.
Britain received its first US LNG shipment in July.
Weaning Britain off imports is one of the driving forces behind government support for hydrau- lic fracturing, which involves extracting gas obtained from rocks broken up or fractured at high pressure with water and chemicals.
It’s impossible to know exactly how much shale gas might be underground – and more importantly, how much can be extracted – until fracking has started in earnest.
The British Geological Survey estimates shale gas resources in northern England alone could contain 1,300 trillion cubic feet (tcf) of gas, 10 per cent of which could meet the country’s demand for almost 40 years.
The government is not banking on a fracking bonanza, however, partly because there’s no urgency given that global gas prices so low.
A BEIS study on gas supplies published in October concluded that Britain would have secure supplies of gas up until 2037 even if no shale reserves can be exploited. — Reuters