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SOURCE World Review
VADUZ, Liechtenstein, October 2, 2013 /PRNewswire/ --
Despite having substantial shale gas resources, analysts believe that the UK is unlikely to replicate the US 'shale success story', writes World Review author and energy economist Dr Carole Nakhle.
'A limited onshore domestic service industry, geological complexities, no private ownership of mineral rights, high population densities, strict environmental regulations, and local opposition, among other obstacles, all add to the cost and time of exploiting shale gas,' she says in World Review, a free-access website focusing on global geopolitical affairs.
UK George Osborne, Chancellor of the Exchequer has offered a package of measures to encourage exploration of the UK's shale gas resources, including 'a generous new tax regime for shale'.
'To date, only a small number of small companies have expressed interest in shale gas,' she says. 'Although the recent acquisition by energy giant Centrica of a 25 per cent stake in Cuadrilla's exploration license inLancashireis seen as an encouraging sign.'
However, local communities continue to oppose shale gas exploration. 'There are fears that fracking will cause serious environmental damage, from earthquakes to ground and water contamination. It would be difficult for companies to proceed with their plans without the blessing of local communities,' she adds.
What has been done so far is just the start of a long process before the UK can claim, with certainty, that shale gas resources will dramatically alter its energy realities, says Dr Nakhle.
Dr Carole Nakhle is an energy economist, based in London, UK, specialising in international petroleum fiscal regimes, world oil and gas market developments, and energy policy. She is Associate Lecturer in Energy Economics at the University of Surrey and acts as external expert for the Fiscal Affairs Department at the International Monetary Fund (IMF).