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Its a fracking miracle! (Or a fracking disaster).

The price of natural gas has been reduced in the USA by a gas extraction technique known as "hydraulic fracturing" or fracking. The graph on the right is typical of the charts that are used to show the extent of this price reduction.

However, the picture is not so simple because there was a huge spike in natural gas prices in the noughties and a fall due to the recession, the US Energy Information Administration provides the true picture:

There can still be little doubt that the USA is getting its gas at about 30% of the price in the rest of the world.  This low price is due to shale gas extraction using fracking (EIA).

The cost of energy is so important for industrial output that it is impossible to imagine that the rest of the world will not follow the fracking bonanza.

The UK will follow the USA.  Estimates of the shale gas reserves in the UK are rapidly escalating. In 2010 the British Geological Survey estimated reserves at 5.3 tera cubic feet (tcf), in 2011 Advanced Resources estimated 20tcf.  Since then there has been active prospecting.  The exploration company, Cuadrilla, estimated reserves of 200 tcf in Lancashire alone, Eden energy estimate 12 tcf in South Wales, Dart Energy 65 tcf, Celtique Energie estimate 10 tcf in the Weald basin  etc..  There seems to be at least 300 tcf of shale gas reserves.  The UK consumes about 100 billion cubic metres of gas a year and has reserves of about 10000 billion cubic metres.  Basically England is a vast shale gas reserve with enough onshore natural gas to meet energy needs for a century or more. 

(See THE UNCONVENTIONAL HYDROCARBON RESOURCES OF BRITAIN’S ONSHORE BASINS - SHALE GAS and UK Shale Gas - How Much Gas?).

The offshore shale gas deposits in the UK may dwarf those that are found onshore, perhaps by 10 times.  Given the highly populated nature of the UK the government should be sponsoring offshore technology as a priority, perhaps exempting the first 1000 km2 North Sea field that has a commercial yield of fracked shale gas from tax for 20 years.

Fracking has several problems.  Most importantly it is not cheap. Notice in the chart above that even with fracking the price of natural gas continues to rise as extraction becomes more difficult.  There will be no return to the cheap energy of the heyday of oil and gas extraction.  There are also problems with minor earth tremors and pollution of ground water. 

There is little doubt that even if the UK refuses at first to engage in fracking for environmental reasons the rest of the world will go ahead.  This leaves the UK government with no real alternative to licensing fracking.  This is grim news for the environment but we should have acted 20 years ago if we wanted a good environmental outcome for the earth.

Current Dept of Energy and Climate Change Licenses

(Click on image to enlarge it)

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