Shale gas is not a game-changer for the UK, says BP

 By Emily Gosden

By contrast the boom in shale gas in the US was likely to make it a net exporter of gas by 2017, the oil major forecast in its Energy Outlook 2030.

Advocates of shale gas, which is extracted by the controversial process of 'fracking’, hope it can transform the UK energy landscape, heralding a new era of cheap energy as it has in the US. Chancellor George Osborne has said Britain should not “be left behind as gas prices tumble on the other side of the Atlantic”.

But Christof Rühl, BP’s chief economist, said it foresaw “extremely limited growth” in shale gas in Europe. “Europe has various problems: environmental concerns, outright bans on fracking, a lack of infrastructure and a long tradition of not minding so much having to import things,” he said.

Shale gas would play a role only nearer to 2030 and “only to a very small extent”, he said. “I think that is also the story for the UK. There will be some projects starting here, maybe earlier than on the continent, but it’s not likely to be a big game-changer in the natural gas market, where we have these declines in the North Sea to compensate.

“It takes years to actually generate and unlock shale production in Europe, where infrastructure is so much less developed than it was in the US. It takes an enormous amount of drilling and rigs to unlock shale,” he said.

BP’s report found that the EU’s production of shale gas might reach only 2.4bn cubic feet per day (bcfd) by 2030 - compared with about 20bcfd in the US currently. European shale gas therefore would not be “enough to offset the rapid decline of conventional gas production”. Europe would see a 48pc increase in net imports over the period.

Meanwhile US shale gas output was forecast to continue to grow significantly and would “continue to dominate” global shale gas production by 2030, BP said.

Its growth was bolstered by a series of “above ground” factors including the world’s largest rig fleet and a favourable land access regime. By 2030 global shale gas production will reach 74bcfd, out of total world gas production of 459bcfd.

The rise of unconventional resources - both shale gas and also so-called 'tight oil’ would redefine expectations for major economies and “rebalance global trade flows”, BP said.

The UK Government last month gave the go-ahead for fracking to resume, having been suspended in 2011 after causing two earthquakes near Blackpool. Ministers also created a new Office for Unconventional Gas & Oil to oversee the nascent UK industry.

Energy Minister John Hayes told MPs on Wednesday afternoon that shale gas could have a “profound economic effect” on the UK.

But Mr Hayes conceded it would be unwise to make direct comparisons with the speed and scale of development in the US because the UK’s geography, geology and land ownership were different and cost of extraction may be higher.