ECONOMIC REPORT 2013
68
of Leicestershire and Lincolnshire). The size
of the resources in place is much larger than
previously forecast, with a central case of 37.6
trillion cubic metres (tcm). For comparison,
current consumption in the UK is about 85
billion cubic metres (bcm) per year and so,
even if only ten per cent of the resource were
to be recovered, this would still equal more
than 40 years of supply at today’s rate of
consumption.
However, it is not possible at this stage to
forecast how much will be technically and
economically recoverable. This will only
become apparent when many more wells
have been drilled and tested. As data are
accumulated, it will gradually be possible to
forecast the potential size of the prize.
Nonetheless, the signs are encouraging.
Shale gas is most unlikely to induce the
degree of change in the UK (or EU) which has
occurred in the USA because of very different
circumstances, but there is the potential
for a new arm of the oil and gas industry to
develop in Britain, providing investment, jobs,
new gas supplies and tax revenues, while
reducing imports. A report published by the
Institute of Directors in May 2013 examines
the possibilities
23
. In addition, everything else
being equal, any new supplies of gas will tend
to exert downward pressure on prices relative
to what they would otherwise be.
As drafting of this report was being
completed, the government announced new
tax arrangements for the production of shale
gas, modelled on the FA concept which applies
to the UKCS (see Section 6 for more details of
the tax regime as applies to the UKCS).
Further information about shale gas
may be found at the following three websites
especially established by the industry
in Europe:
23
See
