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Is the U.K. Ready for a Shale Revolution?

British energy company Cuadrilla Resources said there is much more gas in northwest England than previously thought. There are lingering questions, however, as to whether the shale revolution can spread beyond North American borders.

The British shale gas company is the only one to have carried out a hydraulic fracturing campaign in the country.  In 2011, British legislators enacted a warning system for fracking after Cuadrilla reported minor tremors with its activity in Lancashire.

Last year, the company said it was suspending operations in the area. Huw Clarke, a Cuadrilla geologist, now thinks there's much more shale gas potential in the region's Bowland basin than previously thought, however.

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Clarke told an audience at a shale natural gas conference in London the company thought there was initially about 200 trillion cubic feet of natural gas in the region, though that estimate came from just one well.

"[After drilling two more wells,] I believe there's closer to 330 trillion cubic feet in place just within Cuadrilla's license area alone," he said.

Cuadrilla last year faced a summer of high-profile campaigns targeting its drilling operations in West Sussex County, along the southern British coast. Ron Oxburgh, a former non-executive chairman for Shell, told the London shale conference the country might not even be ready for a shale gas revolution despite the clamor.

"We may get more [gas] out of a single hole than in other parts of the world, but we need new onshore drilling infrastructure which we don't have now," he said.

The British Geological Survey said the potential shale gas reserves in the Bowland basin are far more than the country currently consumes. Coal, however, remains the dominant form of energy in the British power sector.  Last week, the British Department of Energy and Climate Change said nuclear power supplied about 21 percent of the nation's electricity last year and natural gas accounted for about 27 percent. For coal, it was 40.7 percent.

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"Despite a decrease in coal use in 2013, the contribution of coal to the U.K.s electricity mix remains high compared to recent years," the DECC said.

At the CERAWeek energy conference in Houston, meanwhile, industry officials said the shale phenomenon may be a case of too many eggs in the fossil fuel basket. Andrew Mackenzie, chief executive officer at energy and mining company BHP Billiton, said oil, natural gas had a long future ahead and maybe that's the problem. The shale gas revolution, he said, isn't going to spread beyond North America very quickly.  It's diversification, not more exploration, he said, that may be the best option for energy security.

By Daniel J. Graeber of Oilprice.com




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