The shale gas deposit around Blackpool is 50 per cent bigger than previously estimated, The Times has learnt. The news will put more pressure on ministers who are due to lift the ban on extraction as early as next week, to support what could prove to be a gas bonanza for Britain.
Cuadrilla Resources, the exploration company backed by Lord Browne of Madingley, the former boss of BP, hit the headlines after it set off dozens of small earth tremors around Blackpool, resulting in fracking being suspended.
Fracking involves blasting water and sand at high pressure into rock to release gas, a process that environmentalists fear could pollute aquifers used to supply drinking water.
The British Geological Survey (BGS) is carrying out an independent analysis of shale gas reserves which it plans to publish in the new year. It is understood that the BGS will estimate that the 1,000 square kilometres covered by the Bowland Basin to the east of Blackpool contains 300 trillion cubic feet of gas, equivalent to 17 times the remaining known reserves in the North Sea.
A year ago Cuadrilla published an estimate of 200 trillion cubic feet for the Bowland Basin. At the time the company said that the figure was conservative. But many experts dismissed it as unrealistic. The upward revision by the BGS will fuel the clamour for Britain to develop its shale gas reserves.
This week the Chancellor said that he would consult over plans to award generous tax breaks to shale gas developers such as Cuadrilla. His “dash for gas” would lead to at least 30 new gas-fired power plants being built by 2030, potentially powered by cheap, domestically produced shale gas. Mr Osborne is hoping that this would bring down energy bills but his plan is at odds with environmentalists who fear that it will result in Britain missing its targets to reduce carbon emissions.
Francis Egan, chief executive of Cuadrilla, declined to comment on the BGS estimate for the Bowland Basin Shale but said: “The company got a lot of flak for the 200 trillion cubic feet number. It’s likely to be conservative. I would say wait for the BGS number.”
He said that anywhere between zero and 40 per cent of the gas in the ground could be recovered and at a cost well below present gas prices.
Cuadrilla has previously said that it could drill up to 800 wells over 16 years if it moves into the production phase, creating 5,600 full-time jobs at the peak and generating between £5 billion and £6 billion a year in tax revenues.
Many doubt that Britain would be able to replicate the dramatic shale boom in the US over the past five years, which will result in the US becoming the world’s largest oil and gas producer by 2017. But Mr Egan said that matching even half the shale boom in the US would represent success for Britain.