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The Beatles observed that there were 4,000 holes in Blackburn, Lancashire. We might soon discover what they meant. The Bowland Shale, which runs under northwest England, could be the next big shale gas play – though it will require a lot of holes to prove it. Cuadrilla Resources is exploring in Lancashire: there was talk on Friday that Centrica was in talks to buy a slice of its acreage. This week IGas Energy said that a 300-square mile block of the region may have enough gas to meet the U.K.'s needs for 60 years. Cue excited talk of a U.K. gas renaissance.
According to IGas, deposits of gas in its slice of Bowland could reach 170 trillion cubic feet. The U.K. currently consumes 3 tcf of gas a year. Even its most conservative estimate of 15 tcf would meet demand for five years. The "most likely" volume is 102 tcf.
Proponents of shale as the answer to everybody's energy problems look at the U.S. and go weak at the knees. Thanks to its reserves of shale oil and gas, the U.S. has reduced its oil imports from 12.5 million to 7.5 million barrels a day. In its 2012 report on the global oil and gas market, BP predicted that the U.S. would be 99 per cent self-sufficient in energy by 2030; it will overtake Russia and Saudi Arabia to be the world's largest oil producer by 2020, according to the International Energy Agency.
Could something similar happen in the U.K. or other parts of Europe which have large shale reserves? It is worth remembering that the U.S. was a big oil producer before shale. It already has the infrastructure – technical, financial, transport – to exploit its shale resources. It also has a low population density in big shale sites such as Texas and North Dakota. Indeed, producers' biggest problem in the U.S. at present is that there is so much shale gas that the price has tumbled, making it uneconomic to develop more wells.
Still, the U.K. shale ride could be fun. Shares of IGas jumped a third this week on the back of its report before falling back. The company is valued at £180-million ($285.7-million). Independent explorers developed U.S. shale; they will probably do so in the U.K., too. With oil and gas exploration back in vogue, this is where the immediate rewards may lie. And who knows? We may even discover how many holes it takes to fill the Albert Hall.
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