Value of UK shale gas potential equal to conventional gas, says Westminster parliament

Westminster portcullisThere are currently no official reserve estimates of the potential value and size of the UK shale gas potential, according to the Westminster Parliament’s Office of Science and Technology.

In a detailed analysis of the potential of UK shale gas, the OST reports that the UK reserves ‘could be anywhere from zero to substantial’, and it adds:

“To determine reliable estimates of shale gas reserves, flow rates must be analysed for a number of shale gas wells over a couple of years. Further, estimates will be determined by many non-geological factors including costs, engineering, supply chain and access restrictions due to environmental and planning issues.

Without reserve estimates the commercial scale of shale gas extraction cannot be forecast.”

However, to put these estimates in context, the UK’s remaining potentially recoverable conventional gas resources are 1,466 bcm (of which 493 bcm are reserves) and annual UK gas consumption is 77 bcm.

Estimates of UK shale gas potential are at an early stage of development. Variations in shale thickness and gas content are known to occur across the UK, so reliable estimates require significant geographical coverage of data, from rock layer imaging and drilled wells.

However, currently only a few exploration wells have been drilled into UK shales and properties from individual wells are extrapolated across large regions, leading to uncertainty in resource estimates. There are no official reserve estimates, which are needed to forecast the commercial scale of shale gas extraction.

More wells could be drilled to allow direct measurement of the subsurface gas content. As no data have been available in the UK, these wells could be used to test the production of shale gas to help estimate recovery factors. Currently estimates are based on limited data and international comparisons. US experience indicates that recovery factors are less transferable for shale gas than conventional gas and as the UK has a different geology to the US, comparisons are speculative.

The potentially recoverable resources of shale gas in the UK are uncertain. In 2010, the British Geological Survey (BGS) published an indication of the potential of some 150 billion cubic metres (bcm). A study for the US Energy Information Administration (EIA) puts it at 740 bcm.

In 2011, the company Cuadrilla estimated a total resource of 6,000 bcm in their licensed portion of the Bowland Shale, a layer of shale located under northern England that is considered to have the UK’s best shale gas potential.

Assuming a North American recovery factor of around 8-20%, this would indicate potentially recoverable resources of 500-1,100 bcm. The thickness and gas content used for the estimates were informed by data from three wells drilled by Cuadrilla in 2011 along with three wells drilled in the 1980s.

Estimates of shale thickness were also supported by subsurface imaging; however, the accuracy of both recovery factors and extrapolating gas content across the Bowland shale based on well information remains uncertain.

The Parliamentary Office of Science and Technology

7 Millbank

London

SW1P 3JA

Tel: 0207 219 2840

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