It's not yet the time that we can start yawning about UK shale finds as we do in North America,  but today's news from Igas underlines that Cuadrilla may not have been so much lucky as simply first:

 IGas Energy Plc, a U.K. developer of coal-bed methane gas fields, encountered a shale gas deposit while drilling at the Ince Marshes site in Cheshire in northwest England.

After drilling through coal seams, IGas found a shale section of at least 1,000 feet (304 meters) with gas indications observed across the interval, IGas said in a statement today.

The area is part of the Bowland shale, which covers large parts of northern England. In September, Cuadrilla Reources said it had found 200 trillion cubic feet of gas in place drilling the Bowland shale at a licence in Lanacashire, north of Igas’s well.

I've noted before that we will see an evolution of business models from Coal Bed Methane, to shale gas. CBM is so early 21st century. Shale is the future. CBM is relatively small potatoes. With today's technology, one can access far greater quantites of gas for much lower cost per unit. 

Also worth noting:

  • This is the same Bowland Shale play Cuadrilla had such luck with, albeit at three times the thickness
  • Having said that, 300 feet or less gets people excited in the Barnett or Marcellus
  • Judging from the US examples, shale is becoming almost ubiquitous. Which means that gas is going to end up like real estate:  Location, Location, Location
  • And what a location. Within a ten mile radius of Helsby there are some of the largest natural gas customers in the Europe in chemicals, refineries and Connah Quay Power Station. Luck compounded.
Meanwhile Charles Hendry , Energy Minister in a speech yesterday:
3. GAS IN THE UK MARKET IN THE FUTURE
  • As I mentioned earlier, the UK is fully committed to ambitious decarbonisation targets. The UK Government has made clear its commitment to a legally binding target of 15% of all energy from renewable sources by 2020. We have made public our support for new nuclear and for CCS, and we are taking significant steps to increase energy efficiency. Gas also has a role in helping us achieve an 80% emissions reductions by 2050.
  • Let me explain how gas will help us achieve our ambitions. I think we need to split this into two time horizons – over the next 10-20 years, and then the longer term out to 2050.
  • Changes in the UK energy sector over the next 10-20 years will create new sources of gas demand. We will need gas to retain sufficient electricity generation capacity margin in the face of coal/nuclear closures, to manage intermittency from increased renewables, and continue to meet the majority of our heat needs:

    In the electricity sector, approximately a fifth (19 GW) of existing capacity is expected to come off the system between now and 2020, principally coal and nuclear generation due to environmental regulation and age. New gas generation will play a key role in filling this gap in base-load/mid-merit generation. Over 11GW of CCGT has received planning consent since 2009, with around 3 GW under construction. I think you’ll agree with me that this is not exactly a “dash for gas”, but rather a significant, and sustainable, increase in the role of gas here in the UK.
    As the share of renewables in our electricity mix rises, much of it in the form of intermittent wind, there will be an increasingly important role for gas in providing back–up generation for the times when the wind doesn’t blow.
    And gas will continue to provide the significant majority of our heat. Gas is still expected to meet around two-thirds of heat demand by 2030. There will also be new opportunities for gas in meeting some of the extra generation required to power the growth in electric heating.
As shale bubbles up,  reality is starting to seep in. Good news all round. Which makes a nice change.

UK economic activity shrank by 0.2% in the last three months of last year according to official figures.

Or should we say that shale provides an alternative to more than just energy.  



 

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  • Simon

    Nick ,<br /><br />I read the operational report from Island Gas again and they say they were still in the shale at total depth and they had gas flows throughout .<br /><br />It is possible that the shale is as thick or even thicker than that on Cuadrilla's acreage .<br /><br />Nice to have the backstop of revenue from coal bed methane and be able to test both objectives with a single well bore and well head .

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  • On UK shale in general, there was a very encouraging piece in the FT on Friday advocating rapid development of UK shale for the usual positive reasons.

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