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Scotland may hold billions of barrels of shale oil, report says

NIDAA BAKHSH

NOTTINGHAM, United Kingdom (Bloomberg) -- Scotland may have billions of barrels of shale oil buried under the country’s most densely populated areas, geologists said June 30.

Scotland’s central belt, running between Glasgow and Edinburgh, may have 6 billion barrels of oil in place, according to a report by the British Geological Survey. While only a fraction of the resource will end up being viable, the deposits could supplement the UK’s 3 billion barrels of proven oil reserves, held mostly in North Sea fields off Scotland’s coast.

The oil and gas industry is central to the debate on Scotland’s independence before a referendum in September. The Scottish government says existing fields in the North Sea will underpin the economy of an independent nation, while opponents say declining production from offshore reserves leaves the country vulnerable.

“This report will give reassurance to investors who wish to explore for oil and gas onshore in Scotland,” said Ken Cronin, CEO of the UK Onshore Operators Group, an industry lobby. The resources “can help replace the UK’s growing dependency on imports and balance the decline of the North Sea.”

Bowland shale

Scotland’s shale gas potential is a fraction of northwest England, the report showed. Scotland’s central belt has shale gas in place of 80.3 Tcf, according to the middle estimate in the report. That compares with 1,300 Tcf in the Bowland shale in northwest England, according to research published by the British Geological Survey last year.

Exploiting the UK’s shale resources has been opposed by environmental campaigners and property owners concerned drilling techniques, including hydraulic fracturing, risk polluting water supplies. Britain’s greater population density will likely make production more difficult than in the U.S, where a shale boom has reversed declining oil and gas output.

The UK government is offering tax breaks to shale drillers to spur development of the resource as North Sea reserves dwindle. The Bowland basin in northern England may supply local natural gas demand for half a century at extraction rates of 10% similar to U.S. fields, according to a report last year.

“Only the broad shoulders of the UK can attract investment in new energy sources and maintain the UK’s position as one of the world’s great energy hubs,” said UK Energy Minister Michael Fallon.

06/30/2014

 

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