Shale gas: a game-changer for European energy?

Two weeks ago, British energy company Cuadrilla Resources announced the discovery of a new shale gas reserve in the Bowland shale basin near Blackpool. Cuadrilla believe the discovery could total around 5.7 trillion cubic metres (tcm) of gas, though this is yet to be verified. Shale gas now has the potential to be an game-changer for European energy — if the discovery proves to be as large as they estimate, it would be the largest gas find ever made in the UK.

The announcement received a rapturous welcome in the region, with newspapers talking of a "jobs bonanza". But despite the blaze of publicity that heralded Cuadrilla’s find, Reuters then reported that several industry and environmental sources had cast doubts over the potential size of the discovery, with opponents accusing the company of "painting an excessively rosy picture to win political support for the controversial project."

Doug Parr, policy director at Greenpeace UK, suggested that the announcement was politically motivated: "They’re obviously looking for further support and if you look at their presentation, they are obviously talking a lot about the benefits to Lancashire... it looks like a pretty clear pitch to Lancashire County Council to give them planning permission," he said.

Hydraulic fracturing (fracking), used to extract oil and gas from shale formations, has struggled with bad publicity in the US and latterly across Europe because of concerns about pollution to water tables and the environment at large. Indeed, France and parts of Germany have now banned the contentious drilling technique.

Cuadrilla suspended fracking operations near Blackpool in early June after two minor earthquakes were experienced in the area. At the time, the British Geological Survey (BGS) said: "The timing of the two events in conjunction with the fluid injection suggests that they may be related." The firm is now working on a plan to be delivered to the Department of Energy and Climate Change. Miller pledged to halt fracking "until DECC has seen the report and is happy about public safety."

On 23 September, Ed Osterwald, managing director of the energy practice at Navigant Consulting, expressed concern about the "impact that extensive development, including the drilling of many wells and the use of hydraulic fracturing to unlock the very tight shale formations, can have environmentally."

While the recoverable gas in Cuadrilla’s find appears likely to be around the 1.1 tcm level, it would still represent a major find, and could prove to be the largest ever discovery to have been made in the UK. The company said that it expected to begin producing gas by the middle of 2013.

Political will to diversify the energy mix is abundant in Europe. However, local opposition to fracking could prove to be a major stumbling block for the development of shale gas. With public opinion building against fracking, it will be interesting to see how the UK government reacts to the find. The government wants to shore up the UK’s energy security to counteract depleting reserves in the North Sea and growing Russian gas imports. But ministers will also be conscious of environmental opposition to fracking and how shale gas would fit into the greener energy mix they hope to achieve.

Regardless of the political obstacles that lie in the way, it is a potentially very sweet Blackpool rock that is on the lips of everyone in the UK gas industry this week.