Articles from 2013
UK Shale oil potential: Big
- Written by Administrator
- Published: 02 October 2013
As the UK shale gas debate settles down, some interesting news on the size of UK shale oil.
DECC is planning an assessment “by March 2014” of the gas and oil potential of the Weald Basin in Southern Britain. That’s the one that geologically looks most promising, but until today, we haven’t had anyone willing to put numbers out on the oil potential of the Bowland Shale.
For reasons which have more to do with a general ignorance of the US shale boom, the European shale debate has been where the US was four years ago, i.e, it was all about gas. Now I love natural gas for all kinds of reasons, but oil is nothing to sniff about either. Last year the UK produced 967,000 barrels a day, almost entirely from the North Sea, but we consumed 1,468,000. At the average Brent Crude of $111.67 that gives a UK shortfall of 501,000 barrels a day or $55,946,670, currently £35.1 million a day off the balance of trade. Hold those numbers in mind.
A couple of weeks back consultants IHS, who have one of the top reputations in energy, released an interesting press release talking announcing an ongoing study on international shale oil.
The world has large potential technical recoverable resources of tight oil possibly several times those of North America, according to a new geological study by global analytics firm IHS. Commercial production of these resources could equal and exceed the current estimates for North America tight oil output, according to the study, released today at the IHS Forum in Houston.
The study, Going Global: Predicting the Next Tight Oil Revolution confirms widespread geological potential of tight oil globally. In particular, the study identifies the 23 highest-potential plays throughout the world and found that the potential technically recoverable resources of just those plays is likely to be 175 billion barrels—out of almost 300 billion for all 148 play areas analyzed for the study. While it is too early to assess the proportion of this that could be commercially recovered, the potential is significant compared to the commercially recoverable resources of tight oil (43 billion barrels) estimated in North America by previous IHS studies.
The big story is elsewhere but it mentioned Europe in passing:
The 23 highest-ranking tight oil plays identified by the study include well-documented areas such as the Vaca Muerta Formation in Argentina, the Silurian “hot” shales in North Africa and the Bazhenov Shale in West Siberia. However, the list also includes lesser-known geological plays in Europe, the Middle East, Asia and Australia.
Today at Exploring Internationally for unconventional oil and gas IHS made a presentation available online later this week that, inter alia, dropped an interesting little number about the western Bowland Shale, mostly Lancashire and Cheshire, and covering Cuadrilla and Igas licenses. There are others, but there is also much unlicensed acreage as well, for which we live in hope of being available next year. Also bear in mind that the eastern Bowland isn’t included.
Hang on to your hats. IHS, who also said that the western Bowland contained 20 TCF of recoverable gas also had 4.3 billion barrels of recoverable oil.
Let’s play, for the umpteenth time here, “How Big a Number is That?”, starting out with one of my favourites. One million seconds is 11 days, 13 hours 46 minutes and 40 seconds, but a billion seconds is over 31 years.
So if we were to be fortunate enough, or to be exact, if were to create a framework where we would make ourselves fortunate enough, replacing 500,000 barrels a day runs to 8600 days or 23 years and six months. Not something to be lightly dismissed. As Michael Fallon said today about gas, it would be irresponsible not to support looking.
Now conservatively, all this oil sloshing around, with more to come from Iraq, Iran, the Bazhenov, Brazil and, as one of the other presenters told me privately today, Colombia, we won’t be seeing $111 oil. Especially because oil demand moves down in OECD countries and because the developing world won’t blindly follow us down the oil path. As they say, maybe every Chinese would like to drive an SUV, but they couldn’t find anywhere to park it. But most people can live with $80 oil. Let’s assume they’re lying and oil would go down later this decade to $70. That still makes 500,000 barrels a day worth just under £22 million - a day. Over a year, that means £ 8 billion off the balance of trade. Tax that at 62% and the chancellor, of whichever party, would be throwing money away this conference season, with an extra £5 billion or so.
Now let’s play a variation of how big a number is £5 billion for the people of Lancashire. For starters, it would pay the entire £335 million budget for Blackpool Victoria Hospital NHS Trust. Throw in the budget of £800 million for University of Manchester. Or just chuck in £240 million and cancel all tuition fees there. Think of how much that would make Professor Kevin Anderson happy. It would free up the requirment for students to work through college and would enable them to join anti shale gas protests. If they so choose.
There’d be plenty left for everyone. Worried about the regulation? Entire budget of the Environment Agency is a touch over a billion. Etc, etc. We could of course, leave all fossil fuels in the ground. That’s a policy decision too.