To use the analogy of a juggernaut to describe the impact shale gas is having on the world’s energy landscape is not too outrageous. In the US, for example, reserves have turned a nation set to become heavily import dependent into a potential gas exporter. A similar shift could now happen in Europe. Recent discoveries there are driving up interest in this fuel resource, despite the claims of some academics and environmental organisations that shale gas could be as damaging to the environment as coal.
Jonathan Robinson, a senior energy analyst at Frost & Sullivan, considers that shale gas now has the potential to be an “energy game-changer” in Europe. This is in response to the recent discovery by British energy consortium Cuadrilla Resources that Lancashire in the north west of the UK is sitting on substantial shale gas reserves. If the results from the consortium’s test wells are accurate, 200 trillion cubic feet (5.6 trillion cubic metres) of natural gas are trapped underground. About 20 per cent of that gas is currently seen as technically recoverable, meaning the UK could now have 40 trillion cubic feet of additional gas reserves.
Robinson believes this discovery is likely to boost similar exploration activities across Europe. France – which, it should be noted, faces no looming capacity shortfall – has banned ‘hydro fracking’, the highly controversial process used to extract shale gas. But countries further east are less fastidious, which is unsurprising as shale gas could cut their reliance on Russian gas and replace ageing coal fleets with less polluting natural gas.
Poland’s prime minister, Donald Tusk, said his country could begin commercial shale gas production within three years, meaning it could quickly become a major gas player in Europe. A recent study by the US Energy Information Administration puts Poland’s recoverable reserves of shale gas in the region of 5.3 trillion cubic metres.
In shale gas reserve terms, however, the Marcellus Shale formation, which stretches from the US states of New York to Virginia, currently dwarfs all known reserves. And this is despite its technically recoverable natural gas reserves being recently downgraded by the US Geological Survey from a jaw-dropping 410 trillion cubic feet to a still very respectable 84 trillion cubic feet.
Interest is also growing in a relatively undeveloped shale deposit, called Utica Shale, which lies below eight eastern states, although most of the gas is thought to reside under the state of Ohio. This shale basin has been estimated to hold more natural gas than Marcellus, and energy companies are taking this prediction seriously, with Exxon Mobil being the latest to acquire a stake in Utica.
The recent find in the UK is clearly small-fry in comparison. Nonetheless, Robinson believes it is an important development for the country, whose natural gas reserves have been slowly declining in recent years. The UK’s remaining gas reserves in the North Sea are thought to add up to about 9 trillion cubic feet – sufficient to meet gas consumption for three years – forcing increasing dependence on gas imports.
What is particularly interesting is that shale gas discoveries in Europe could transform the region’s low-carbon generation mix aspirations, in particular in relation to renewables.
Taking the UK as an example, the Wall Street Journal believes that if shale gas were to replace more costly gas imports, it could have a significant impact on the country’s plans to decarbonise its electricity.
The UK government aims to reduce carbon emissions by 80 per cent from 1990 levels by 2050. Achieving this has been expected to require a major expansion of renewable energy resources, such as offshore wind or wave and tidal power. But all of these renewable generation resources struggle to compete on cost with electricity generated from fossil fuels, even with subsidies, and electricity prices would have to rise to support their development.
Thus, if the coming years do indeed bring a shale gas revolution in the UK, in Europe and elsewhere – making natural gas not only abundant but, more importantly, cheaper – what incentive will remain for building renewable energy plants?
Dr Heather Johnstone,