UK shale gas suddenly looks very busy

Ignore the mainstream story from the Daily Telegraph and go for the professionals, via our long time fan Oleg Vukmanovic once of Platts and now of Reuters:

Britain's shale gas companies plan to drill at least 20 to 40 exploration wells over the next three years to test the production potential of newly discovered deposits, making or breaking hopes of a full-scale drilling boom.

The next few years will prove critical for an infant industry that sees itself as vital to reversing Britain's rising dependency on foreign gas but which must tread carefully in order to reassure a sceptical public and vocal environmental lobby.

That’s right. The rumours of UK shale industry being strangled at birth appear to have been exaggerated. Many don’t want to believe in UK shale and have consistently tried to downplay the potential. But while we always knew Cuadrilla had company, for example Igas, Dart and Reach, all of a sudden via Ken Cronin of the UK Onshore Operators Group we see many more of his members are gearing up to drill:

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Media amnesia on shale gas allegations

Here’s more on the subject of the role of media amnesia I highlighted in a letter the FT published yesterday:

The UK shale industry finds itself in a position analogous to that of an innocent permanently on trial. Eye-catching claims of poisoned water, flaming taps and shaking foundations have been found wanting by multiple scientific and regulatory bodies world wide. Unfortunately the media have concentrated on allegations to the exclusion of publishing the mundane, but vital, results of investigations. As a result, the industry finds its character, and especially important its financial prospects, sullied by an often obsessive concentration on the charges, and not on the actual trial and most particularly the ultimate verdict of innocence to the majority of any charges levelled against them.

A great example of the charge sheet was this Bloomberg story from last year:

Two grandmothers in tiny Franklin Forks, Pennsylvania, have become unlikely celebrities in the international debate over the safety of hydraulic fracturing for natural gas.

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Back to Balcombe

In a classic example of a reputational cascade, the usually excellent UK energy writer, John Kemp of Reuters, follows the path of another, Guy Chazan of the Financial Times in discussing lessons the financial industry can learn from the public acceptance issues in Balcombe, the West Sussex village where Cuadrilla Resources has planning permission to drill. First, lets follow cascades: 

Informational cascades are the most basic sort of cascades. In them, people form their beliefs using information obtained by observing the behavior or opinions of others. UCLA economists Sushil Bikhchandani, David Hirshleifer, and Ivo Welch define an informational cascade as a situation in which “it is optimal for an individual, having observed the actions of others ahead of him, to follow the behavior of the preceding individual without regard to his own information.” Although “actions speak louder than words” and economists rely more on actions to reveal individual preferences, cascade theory also applies to opinion conformity.

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X doesn’t Mark The Spot. The Search for a Better UK Shale Treasure Map

Guest post time again,  from James Elston of Palladian Energy:

The UK shale debate has been using the wrong map.  I will highlight a better treasure map below.

As a concerned observer and regular participant in the great shale gas debate I am interested in fostering sensible debate on all the issues.  I should declare an Interest, I was founding CEO of the one shale gas explorer to be sold to date in Europe (Realm Energy C$140m sold to San Leon Energy) , I intend to explore in the UK through future vehicles and have looked at UK shale geology in depth.  I wrote a guest post on Poland last Autumn and would hope to update that soon.  I am of course a strong supporter of shale exploration as an environmentally benign and potentially bountiful opportunity for the UK for the reasons frequently expertly articulated by Nick Grealy who runs NoHotAir.

In a time when it is possible to be angry amount so many things it is important not to be pointlessly angry.  There would appear to be concerned residents of many parts of the UK forming groups to oppose shale gas exploration in places where there will simply never be any shale exploration.  If you live in Kent or the Bath/Somerset area I am particularly thinking of you.

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