Is Conservative MP Peter Lilley right to claims a new estimate of the UK’s shale gas resource will be 250 times larger than previously thought? A look at the figures suggests the real number could be ten times smaller.
Commentators on the energy debate have been avidly awaiting a new figure for the amount of shale gas the UK has for a few months now. But over the weekend, the Financial Times broke the news that the release of the estimate – produced by the British Geological Survey (BGS) for the Department for Energy and Climate Change (DECC) – has been delayed by several weeks.
In today’s Daily Telegraph, Lilley writes:
“Ed Davey was apparently so upset by the British Geological Survey’s new estimates, which show there may be 250 times as much shale gas as previously thought, that he told them to go and redo their figures.”
Lilley’s claim appears to stem from a Times article from February, which publicised figures indicating that BGS’s new figures could be about 250 times larger than a previous estimate.
But there’s a crucial difference between the two figures. BGS’s old estimate referred to the amount of shale gas it might be possible to extract. Meanwhile, the new figure refers to the total amount of gas lying under the UK – and is therefore much larger.
Comparing BGS estimates
In 2010, BGS produced an estimate for DECC that the UK could have a “total recoverable reserve potential” of 5.3 trillion cubic feet of shale gas. That’s about 1.5 years worth of the country’s current gas consumption.
But the estimate was based on previous experience of extracting shale gas in North America, and was produced before any drilling had been done in the UK. DECC subsequently commissioned a more thorough estimate of the UK’s total shale gas resource from BGS. It hasn’t been released yet, but rumours have circulated for some time that it will be much larger.
In February, the Times apparently got hold of a leaked copy of BGS’s estimate, reporting that it is somewhere between 1,300 trillion and 1,700 trillion cubic feet. 1,300 is 245 times 5.3. So this calculation could be the source of Lilley’s claim that the new figure may be 250 times larger than the old one, as the table below shows:
But ‘ total recoverable reserve potential‘ refers to the amount of shale gas it will be possible to extract. ‘Resource’ refers to the total amount of shale gas in the ground: the two figures are not directly comparable.
Getting the terms right
So what does this mean? It isn’t that easy to create definitions for the different terms that refer to shale gas extraction as there is no precise agreement – and the terms are often used interchangeably.
But in a report last week, Parliament’s Energy and Climate Change (ECC) Committee – of which Lilley is a member – did a pretty good job of disentangling them:
Resource: the total amount of gas trapped underground.
Technically or economically recoverable resources: the amount of gas that could be extracted, taking into account technical or economic factors, but generally excluding social or political factors.
Reserves: the amount of gas that can be extracted, taking into account the cost, practicalities and social and economic factors.
Recovery factor: a measure of the gas resources that can be extracted, often expressed as a percentage.
Comparing resources and reserves
Not surprisingly, the figure for the recovery factor – how much shale gas can be extracted – changes in different places, and at different times. Technology advances, industries develop and levels of public acceptability alter – all of which would affect the final number.
In 2011, the US-based Energy Information Administration estimated that the UK has a “technically recoverable shale gas resource” of 20 trillion cubic feet. But EIA tells Carbon Brief that its estimate for the total amount of UK shale gas was about 25 times bigger: 483 trillion cubic feet.
Reserves figures are smaller than the technically or economically recoverable resource, as they include assessments of political and social factors, as well as technical and economic limitations.
According to BGS, US reserves have so far typically been about 10 per cent of total resource figures. But there are numerous barriers to the development of the shale gas industry in the UK that don’t apply in the States. So in the UK it may be possible to extract less than 10 per cent of the total shale gas resource.
What will be in BGS’s new estimate?
In its report, ECC called for the government to set a good example when it releases BGS’s new figure by making it crystal clear whether it is talking about resource, recoverable resource or reserves. It also recommended that the government:
“…should use the definition which is most relevant to the general public, which in our opinion is recoverable resources”.
But it doesn’t look like this is going to happen. DECC told Carbon Brief today:
“The BGS report will assess the volume of shale gas in place – i.e. the resource. It is not assessing recoverable resource or reserves”.
That seems pretty clear.
So to go back to Lilley’s estimate, how much bigger will BGS’s new estimate be than the old one?
The Times said in February that BGS will estimate that the UK has a shale gas resource of 1,300 to 1,700 trillion cubic feet.
If reserves are 10 per cent of resource in the UK as in the USA, then that would mean the UK’s reserves stand at 130 to 170 trillion cubic feet. Overall, the estimate would have roughly increased by a factor of 25, not 250:
Alternatively, a new estimate of 1,300 trillion cubic feet would be about 2.6 times larger than the EIA‘s 2011 estimate of 483 trillion cubic feet.
But the FT says that by the time it is finally released, BGS’s estimate may see a “downward revision” from its first draft. It’s not clear why that has happened, however, or whether it really is the result of political interference as Lilley claims.
It appears BGS’s new estimate for the amount of shale gas the UK has is going to be a great deal larger than previous estimates. This will provide support for voices calling for more investment in UK shale gas. But whatever the result, it still seems unlikely that the estimate will be 250 times larger than the old one.