As a major energy user, the UK chemical industry supports the development of unconventional gas (including shale gas) while protecting the environment and ensuring that the public are both safeguarded and receive associated benefits.
Gas will underpin intermittent renewables like wind power
As North Sea reservesdecline, the UK has become heavily dependent on gas imports which now represent almost half of UK gas consumption. The energy regulator Ofgem predicts that spare electricity generating margins could fall to 2% by the middle of the decade as more carbon intensive coal fired capacity closes1. The government’s gas generation strategy2 recognises the UK will therefore need to invest in more gas generation which will then continue to play a major role alongside low carbon generation sources (eg: for fast response back-up to intermittent renewables). Currently, gas is also by far the main source of heat for households and industry and, for many uses, there are no viable alternatives. Locally sourced shale gas will improve security of supply and lessen the risk of high and volatile prices due to uncertainty about gas imports.
The UK is well placed to develop Bowland shale which is 10 times the depth of any US shale
The recently updated assessment of the UK’s Bowland shale reserves by the British Geological Survey (BGS)5 suggests there are reserves of 1300 trillion cubic feet. This rich reserve is 10 times the depth of any US shale reserves and producers estimate exploitable reserves are equivalent to 40 years of UK needs. Firstly, more test wells need to be drilled to establish gas flow rates, and commercial viability. However, the UK has extensive experience from “conventional” drilling for gas both offshore and onshore and can draw on the major technological advances made in the US. A major company like Centrica has shown confidence by investing in Cuadrilla’s shale gas operations.
Shale gas development will create economic benefits and jobs
Extraction of shale gas will create skilled jobs, directly increase GDP and help to reduce our trade deficit. It is likely to bring downward pressure on energy prices, and lead to further gains in output in the rest of the economy, as in the US, which is seeing a $100bn boom in petrochemicals investment3. Shale gas producers will pay substantial taxes to Treasury on their production income and will also provide benefits to local communities.
- Investment in shale gas production could reach £3.7bn a year, supporting 74,000 new jobs
- Shale gas will help to sustain and grow the UK chemical industry which has turnover of £60bn and supports 500,000 jobs directly and indirectly throughout the economy.
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Producers will provide communities with financial benefits of £100,000 per well site during exploitation and 1% of production revenues.
Find out more.
Shale Gas: The Facts
Read our Shale Gas key fact report to understand how its development will create economic benefits and jobs.
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