The man spearheading the hunt for shale gas in the UK says the reserves his company have found “are like the North Sea all over again”.
Leading figures from the energy industry will gather in Edinburgh this week to discuss potentially huge fracking gas reserves believed to be located throughout central Scotland and spread as far as Aberdeen and Dumfries and Galloway.
Fracking is credited with transforming the US energy industry, slashing wholesale and consumer gas prices and creating up to 1million jobs.
The Pinsent Masons conference, The Fracking Question, will investigate the potential benefits of fracking to Scotland and the UK.
Yesterday, Cuadrilla boss Allan Campbell urged the UK to set aside its environmental fears and reap the benefits of the natural resource.
“This is the North Sea all over again,” he said. “In America they are playing with 300ft of gas-bearing rock layers – we’ve got 6,000ft. When I show this to our guys in America, they’re like, ‘This is a game changer’.”
He called for a sovereign wealth fund – like Norway’s oil fund – to be set up to make sure future generations benefit from the shale boom.
A recent report estimated that, over the next 12 years, the shale gas industry could generate up to £5billion in benefits for Scotland and could be worth between £30billion to £50billion to the UK GDP.
Stuart Paton, former chief executive at Dana Petroleum and an expert in unconventional oil and gas, will cite the transformational experience of the US, which is set to become a net exporter of gas.
Mr Paton says that, in five years, wholesale gas prices in the US have dropped 75% and gas production has increased by 30%, cheaper energy has added an estimated 1% per annum to the US GDP and CO emissions have reduced.
“Scotland has a very strong oil-service sector, with some experience of shale development in the US,” he said. “Overall, the UK oil and gas industry, both onshore and offshore, has a good track record in field management, environmental and safety issues, with rigorous regulation. Local communities remain to be convinced but given that, particularly in Scotland, shale potential is largely in previously industrial areas, a good case can and should be made for development.” Jennifer Ballantyne, a partner in the Pinsent Masons energy team, will be considering planning, licensing and regulation issues.
She said: “Community opposition is expected to prove the biggest challenge to shale gas being established as a viable domestic resource. While community benefits might provide a financial incentive to people living near fracking sites, it will be critical to engage with residents and encourage concerns to be voiced and addressed at the early stages of development.”