From NOT A LOT OF PEOPLE KNOW THAT
By Paul Homewood
h/t Ian Magness
From the Telegraph:
Far out under rough Atlantic waters lies the Glendronach gas field.
Discovered eight years ago off the coast of Shetland, the reservoir has the potential to start pumping gas into the system within two to three years, heating homes and supporting industry.
However, the reality is radically different.
Despite being one of the largest unexploited energy assets in UK waters, Glendronach’s fate is far from secure.
The gas is there, as is the technology to extract it.
But Britain’s politicians have pushed Glendronach and others like it into a limbo that could prove permanent.
Facing rising taxes and windfall levies – imposed by the Conservatives and increased by Rachel Reeves – investors are pulling their money out of the North Sea. Ed Miliband’s ban on exploration has only made matters worse.
Glendronach is just one of dozens of gas and oil fields lying under British waters that are now at risk.
Hundreds of miles away in the southern North Sea, the Glengorm gas field – which could provide Britain with millions of cubic metres of gas – has also faced difficulties. Today, its economics are too uncertain for it to be progressed.
Jackdaw and Rosebank, the UK’s most controversial virgin fields, are similarly in doubt. Last week, Miliband put operator Adura’s permit applications on hold. Jackdaw is capable of providing 6pc of the UK’s gas within months.
According to Offshore Energies UK, there are 51 known fields in British waters that could feed gas into UK pipes. Their progress has been halted not by geology but by politics and taxes.
Another 60 projects – mostly extensions to existing fields – have been held back for the same reason, says Ben Ward, market intelligence manager at the trade body.
It means, in total, an equivalent of 3.25 billion barrels of oil have been left to languish in the ground, accounting for both oil and gas projects.
Oil is largely exported, so its main benefits are in jobs and taxes. However, the gas would be flowing straight into our pipes, supporting us through the latest energy crisis. So how much are we missing out on from those frozen fields?
Ward’s estimate is 1.5 billion barrels’ worth, equating to 250 billion cubic metres of gas, or between three and four years of UK needs. That lost production, he points out, does not mean we use less gas – it just means we have to import more.
“UK domestic gas production could be sustained at 140 million barrels of oil equivalent a year,” Ward says. “But projections from the North Sea Transition Authority (NSTA), the industry regulator, now suggest it will fall to around 40 million by 2035.
“This matters a lot to the UK. The gas in those fields could reduce our reliance on imported liquefied natural gas (LNG) from the 25pc predicted by 2030, under current policies, to single digits.”
The blocked projects are just one part of the picture. There are many more potential sources of gas and oil lying under UK waters, industry experts say.
Last month, Chris Cox, the chief executive of Serica Energy, now one of the UK’s largest gas and oil producers, suggested that the waters west of Shetland may hold five trillion cubic feet of recoverable gas.
Cox, whose company recently took over the Glendronach project and hopes to move it on, says it may sound “like a big number, and it is”.
“It’s equivalent to supplying every household in the UK for five years. And yet, some people continue to say that the amount of gas we can produce in the UK is not significant.”
Some of that gas lies in areas that are already licensed, but the rest – perhaps the majority – is in unlicensed sectors. This means Miliband would have to lift his ban on exploration before it could be drilled. He has made clear there is little chance of such a move.
Britain may also be sitting on huge onshore gas resources too. Exploration firm Egdon Resources has reported early evidence for a giant gas field under Lincolnshire containing 425bn cubic metres – enough to meet the UK’s needs for a decade if proven.
The problem is that gas could only be extracted by hydraulic fracking, which, like new exploration, is currently banned.
