Jamie Ashcroft in Proactive Investor explains why declining North Sea gas and a weaker pound make a compelling case for pushing on with UK shale gas developments without further delays.
The pending exit from the European Union strengthens the argument for the development of Britain’s currently untapped shale gas resources.
Britain’s energy security should be a concern whether it remains in the EU or not, though the vote to leave makes this an increasingly acute issue. Quite simply Britain doesn’t produce enough gas of its own.
Currently around half of Britain’s gas demand is met by foreign supplies – most of which is piped into the country via Europe. Immediately that gas became more costly with the Brexit verdict, as a result of the pound plummeting, because it is a dollar denominated commodity.
Britain depends upon foreign gas
In the past two year gas imports as a percentage of demand amounted to 48% and 44% respectively, and, according to forecasts from the UK Oil & Gas Authority imports will hit 50% this year. Ten years ago the figure was just 12%. Moreover, as gas operations in the UK North Sea continue to mature and decline it is expected that the country will become increasingly reliant on imports.
Current government forecasts indicate that ten years from now gas imports will account for almost 70% of demand and by 2035 that is predicted to rise further to 80%. […]
Shale may prove strategically important for independent Britain
England does, in theory, have vast resources of gas locked in shale deposits which span large areas through the north-west, across the midlands and up into Yorkshire. For whatever portion of the current United Kingdom emerges from this historic phase of political upheaval, these domestic resources will have added importance strategically.