Cuadrilla didn’t need a green investment bank to find some 200 trillion cubic feet of shale gas.
It’s going to be a cold winter in Britain. Last week, EDF became the latest energy company to raise retail prices, announcing an average 15.4% hike for natural gas, which many Britons rely on to heat their homes. Earlier in the summer, British Gas said it would raise its average gas prices by 18%. Scottish Power has flagged a 19% increase.
But help may be on the way, and it isn’t coming from winter-fuel subsidies from Westminster. This week, Lichfield-based energy exploration firm Cuadrilla Resources estimated that some 200 trillion cubic feet of natural gas is wedged underground in shale rock beneath northwest England. If everything goes according to plan, Cuadrilla hopes to bring the first gas to market in 2013.
As recently as 2004, the U.K. was a net energy exporter. North Sea oil and gas production has since dwindled, Britons have become ever more reliant on imported energy, and average household prices have roughly doubled. Energy Secretary Chris Huhne’s latest remedies include insulation, more subsidies for windmills and endowing energy regulators with greater powers to fine power firms with which the government is displeased.
But the discovery of huge natural gas reserves beneath Lancashire could revolutionize Britain’s domestic energy market in much the same way shale gas has sent prices plummeting in the U.S.
The company is quick to stress that only about 10-30% of the gas will likely be recoverable. Still, if Cuadrilla can use the process known as hydraulic fracturing, or “fracking,” to recover even 20 trillion cubic feet of the gas, that would more than triple Britain’s current proven reserves of nine trillion cubic feet. The U.K. currently consumes about 3.3 trillion cubic feet of natural gas per year, about half of which it imports, and which accounts for more than 40% of total British energy consumption. Even better, Cuadrilla didn’t need a green investment bank to find Britain’s energy of tomorrow.
The prospect of an abundant, cheap, domestic source of energy that could hit the market within two winters might sound like good news. So no surprise that environmental activists are already calling on the British government to follow France’s lead by imposing a moratorium on fracking pending still more environmental and health studies. Never mind that report after report—including one by the U.K. Parliament in May—finds zero evidence that fracking damages aquifers.
Next year Cuadrilla will present for approval its development plans to the U.K. Department for Environment, the Health and Safety Executive, and Mr. Huhne’s own Department of Energy and Climate Change. If Mr. Huhne and his colleagues are serious about securing cheaper domestic energy, they could save themselves a lot of time and effort, and their taxpayers even more money, by letting it happen.