The UK’s shale industry has potential, but this is definitely not a mirror image of the US.
Controversy after controversy. The calling card for shale exploration.
This week, a historic moment as Grangemouth accepts its first shipment of ethane from the shale wells of the United States following a 40 year long embargo on natural gas exports. Driven on an incredible journey fuelled by both technological and economical investment, the US successfully overcame decades of production decline to boost oil & gas output from shale formations, famously contributing to the demise of commodity prices in a last-man-standing battle with OPEC and its behemoth producer, Saudi.
So the UK’s reliance on imports in the midst of rapidly depleting North Sea reserves takes a new turn, accepting shipments of gas from the US and diversifying our hydrocarbon supply. But why are we relying on the US when we have our own abundant source of shale-locked hydrocarbons beneath us?
Hydraulic fracturing is a process that enables the production of oil & gas from shale. And as a nation, we hate it. Or rather, we are fairly sure we hate it, citing environmental concerns for water table contamination. And the risk for man-made tremors caused by the incredible water pressure at which sand and chemicals are pumped down-hole to break open fissures in the shale through which hydrocarbons can pass freely.
In the midst of a drive towards renewable energy sources, Labour have recently made their position clear on fracking, promising to place a ban on activities to the detriment of a potentially lucrative new industry in the UK. But just how big can shale be anyway?
The US was a shale phenomenon; a perfect melting pot of catalysts which came together to enable such astronomic growth in production in such a short space of time. Technology, investment, state policy, geography, mineral rights were amongst factors allowing for the development of the shale industry at such scale. Factors which, like it or not, do not apply in the UK to the same effect.
We are densely populated; 8 times more so than the US, with little land to spare. The production from a shale well deteriorates dramatically after the first year; meaning that commercially exploiting shale requires a continuous drilling and fracking, and a large number of wells. “Not in My Backyard” is relevant nowhere more than in the English countryside. The NIMBY effect isn’t remedied by the ownership status of hydrocarbons. Unlike much of the US, striking oil (or gas) below your local village green leads not to new schools and facilities for your community. Besides all this, our infrastructure for development is offshore focussed. Some skills are transferable, but nowhere near the scale required to save the nation’s damaged offshore oil industry.
As a decisions loom on the future of the shale industry in the UK, it is important to take a step back. In my view, the future for our island isn’t an attempt to move into onshore shale development – but effective generation and storage of renewable energy combined with demand balancing and sharing.
Domestic shale exploration may play its part; but it isn’t a viable future for the UK’s energy needs.