‘Gone Green’ scenario boosts hopes for UK shale gas

Onshore drilling activity in the UK. Photo courtesy of United Kingdom Onshore Oil and Gas
Onshore drilling activity in the UK. Photo courtesy of United Kingdom Onshore Oil and Gas

Shale gas could provide over 40% of the UK’s gas needs by the 2030’s if government policies and assumed economic growth scenarios support investment in exploration and development, according to a report from National Grid.

 

There would be a big impact on employment in the shale gas industry if development on the scale envisaged under the most optimistic scenario is realised, leading to thousands of new construction jobs being created.

 

National Grid examined four possible scenarios in the latest edition of its annual UK Future Energy Scenarios study. A ‘Low Carbon Life’ scenario produces the highest demand for shale gas as a percentage of the UK’s gas needs. Under a ‘Gone Green’ scenario a strong economy and tougher environmental regulations would support shale production of 14.2 billion cubic metres (bcm) by 2030. A ‘Slow Progression’ scenario with a weak economy could mean less than 5.7 bcm of shale gas production.

 

Under a ‘No Progression’ scenario with weak economic growth, low investment and lack of government support, there could be no shale gas production at all and the UK would have to import some 90% of its gas by 2035. This scenario would also leave the UK vulnerable to price shocks, such as the 5% overnight spike in June when Russia – which supplies a third of Europe’s gas needs, with a third of that passing through Ukraine - cut supplies to Ukraine, raising fears that supplies to the rest of Europe could be affected.

 

Under all four scenarios UK North Sea sector gas supply peaks at under 40 bcm in 2017.

 

The report does not say which scenario is the most likely but notes that there have been many expressions of support for shale gas from government, and several large gas industry companies have invested in UK shale exploration.

 

The report notes that the UK government hopes to develop shale gas to help curb a growing dependence on gas imports and to counter a fall in tax receipts from North Sea oil and gas output, which has been in decline for several years.

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