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South England holds billions of barrels of shale oil, UK says

NIDAA BAKHSH

LONDON (Bloomberg) -- Shale rock underneath some of the wealthiest counties in southern England may contain billions of barrels of oil, a government report said.

The Weald basin, covering counties south of London including Surrey and Sussex, may have oil in place of as much as 8.6 billion bbl, according to a report by the British Geological Survey published today, May 23. It didn’t say how much could be extracted profitably. The UK’s current extractable oil reserves stand at 3.1 billion barrels, according to BP Plc.

The report is likely to add to the controversy about drilling for shale oil and gas in the UK. The government wants to develop the resources to cut energy costs and boost the economy. Opponents say the process of hydraulic fracturing used to drill shale can damage the environment.

Last year, the BGS said the Bowland basin, which extends across east and northwest England, may hold as much as 1,300 Tcf of gas. That’s enough to meet demand for almost half a century with extraction rates similar to U.S. fields, according to Bloomberg calculations.

The UK government has offered tax breaks to drillers to stimulate the shale industry amid rising fuel imports and declining reserves from the North Sea, which has yielded about 42 billion bbl since the 1970s.

The likely range of shale oil in place in the Weald basin is 2.2 billion to 8.6 billion, the BGS report said.

The government said today it plans to “simplify” access to property for the shale and geothermal industries.

“The new proposals would simplify procedures which are costly, time-consuming, and disproportionate for new methods of underground drilling,” the Department of Energy and Climate Change said in an emailed statement. “Oil, gas and deep geothermal companies will be able to explore their potential, and will in return provide a voluntary community payment for access.”

Opponents of drilling criticized the plans, saying they could damage the political prospects of the ruling Conservative Party in areas of traditional support.

“Stripping away people’s property rights while trying to kick off a Klondike-style shale oil rush in the Home Counties is a highly toxic policy mix,” Greenpeace said in statement.

05/23/2014

 

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