Initial studies by IGas – one of the few companies with permission to explore UK shale reserves – have shown that reserves in its sites in the Bowland exploration area could hold up to 172.3 trillion cubic feet of shale gas – nearly 20 times higher than previous estimates.
Around 10 to 20 per cent of shale gas resources found are recoverable on average. “Our estimates for our area alone could mean that the UK would not have to import gas for a period of 10 to 15 years,” chief executive Andrew Austin told the BBC.
The government imposed a ban on shale exploitation in 2011 and has been slow to pursue Britain’s shale gas potential, lagging the revolution taking place in the energy economy of the United States.
In this year’s Budget, chancellor George Osborne vowed to “make shale gas happen”, and promised a raft of tax breaks for explorers and investors.
“Europe has three quarters as much shale as the United States, yet while the Americans are drilling 10,000 wells a year, we here in Europe are drilling fewer than 100,” Prime Minister David Cameron said in a statement yesterday.
“We must extract shale in a safe and sustainable manner – but we have got to do more to ensure that old rules designed for different technologies do not hold us back today.”
But there has been opposition from green groups, who say it will reduce investment in renewable energy, and claim the hydraulic fracturing method used to recover the gas may cause earth tremors.
Late last year the government lifted its temporary ban on fracking projects, which was imposed in 2011 after a series of extremely small seismic events were detected in Blackpool.
Rival shale gas explorer Cuadrilla Resources, which drills near Blackpool and has former BP chief Lord Browne on its board, has previously estimated its resources at 200 trillion cubic feet.
A study by the British Geological Survey due later this summer is also expected to revise up estimates of potential shale reserves in the Bowland area of northwest England.
Shares in IGas closed 12.6 per cent higher yesterday at 104.75p.
Last month the Institute of Directors said the growing industry could create 74,000 jobs and bring in £3.7bn a year in investment, calling it “a new North Sea for Britain”.
“Partnerships need to be established between industry, government and communities to ensure that development of this vital national resource benefits local people,” said Corin Taylor, senior economic adviser at the IoD and author of the report.