Hopes that shale gas will help prevent Britain suffering an energy crisis, reduce power bills and cut dependence on imports are â€œwishful thinkingâ€, warns new research.
It is estimated that production would have to hit 4bn to 4.5bn cubic feet a day to offset natural gas imports
There is little prospect of a repeat of the US experience where a shale gas bonanza has slashed costs and transformed the energy scene, says a report published yesterday by Bloomberg New Energy Finance.
The study also says development costs in Britain will be higher than in the US and exploitation will not be fast enough or big enough to offset reliance on imported gas.
The analysis is the latest study on the impact shale gas will have on an economy facing rises in energy prices and delays in adding new power plants to contain the crisis.
PricewaterhouseCoopers recently estimated shale gas could produce economic benefits worth up to Â£50bn by 2035. However, the Bloomberg researchers said that high development costs, along with legal, planning and environmental factors, will slow production and mean Britain will struggle to achieve benefits on anything like the scale seen in the US.
They estimate extraction costs in Britain will range from $7.10 to $12.20 per million British thermal units, compared with the $4.54 to $4.83 rate in the US. They also warn that production would have to hit 4bn to 4.5bn cubic feet a day to offset natural gas imports and would involve drilling 10,000 wells over a 15-year period.
Guy Turner, head of economics and commodity research at Bloomberg, said: â€œShale gas might seem to offer a new dawn of low energy prices for the UK. Our analysis suggests such hopes should be treated as wishful thinking.â€
UK shale gas revolution is ‘wishful thinking’
If the economic outlook for shale gas is bleak the environmental outlook is even bleaker, see:- â€˜We Cannot Drink Moneyâ€™