Over the years since 2000, the UK suffered the greatest fall in natural gas output of any country – the equivalent of 1.22 million barrels of oil /day – and its prices have tripled. Meanwhile the USA increased its production by 2.4 million boe/day and its natural gas prices fell by 35%. So why the difference? The answer is shale gas. The UK is also estimated to have large shale gas reserves onshore and Cuadrilla Resources has been exploring in northwest England, but fracking in 2011 caused ‘earthquakes’, tiny tremors of scale 2.3 which triggered large environmental protests. In July 2013 the UK government unveiled ‘the world’s most generous incentives’ to reduce tax take on shale oil & gas production from 62% to 30% and in August Cuadrilla attempted to begin drilling in southern England. The result was more protests and even a death threat to its CEO.
Nobody Wants Anything Anywhere, but we all want clean, sustainable, affordable energy and locally-produced natural gas answers many of these desires. To capture the alternative of energy from ‘free’ renewable sources such as offshore wind costs some three times the Capex of natural gas-fired power plant. But unlike in the US, in the UK and most other countries the mineral rights and any oil & gas reserves are state, not landowner-owned – is this the real reason why it is so difficult to win local hearts & minds?
John Westwood, Douglas-Westwood London
+44 203 4799 505 or [email protected]