UK energy supply is undergoing transformational changes. The country has moved from being a net exporter of energy in 2003 to importing 43% of its energy needs in 2012, a requirement forecast by Centrica to increase to 70% by 2020. Following the huge impact of shale gas production on US energy supplies, the first steps are being taken to exploit shale gas in Europe and hopes have been raised that shale resources can have a similar effect on the balance of UK energy supply.
Security of energy supply is a topic that sits high on government agendas. The UK situation, however, is by no means unique. Indeed, prior to the discovery of North Sea oil, the UK was for many years a net energy importer, sourcing large volumes of crude oil mainly from the Middle East. Due to a lack of natural energy resources, Japan has always been a net energy importer, addressing this issue by contracting long term energy supplies from geopolitically stable regions.

Transformational Potential of Shale Resources

The US situation provides an interesting example. From the 1950’s US energy consumption outpaced domestic production and energy imports grew steadily. In 2007, however, the shale gas and shale oil ‘booms’ began to reduce this deficit dramatically, an event which took many energy companies by surprise. As a consequence, new coastal terminals planned for importation of Liquefied Natural Gas (LNG) were abandoned or converted to gas export facilities. The US transformation has been dramatic.

UK Shale Potential

In the UK, a number of high potential shale plays exist, and the 14th Onshore Licensing Round is underway. Recent UK shale gas resource estimates by BGS, EIA and others show some major differences, and the true potential has been hotly debated. The question being asked is whether shale gas can do the same for UK energy balance as it has achieved in the US.

DECC has recently published substantially upgraded estimates of UK shale resource volumes and various onshore UK operators have alluded to the transformational potential of UK shale. But is this talk well-founded? How appropriate is the US analogue? How suitable are UK shales as petroleum producers? Can the political, community and environmental factors be managed? These are all tough questions which need to be addressed to understand whether the UK will experience a shale revolution.

Our Analysis of the Opportunity

Novas Consulting has been involved in shale studies since 2007, which has given us a depth of experience seldom seen outside the US. In 2010, we published the first grass roots assessment of the shale gas potential of Europe. This year, we’ve turned our attention to the UK and published a non-exclusive study, ‘UK Shale Plays: Prospectivity, Resource Potential and Acreage Ranking’. This is the first independent and authoritative assessment of UK shale potential, providing a comprehensive analysis of UK shale fairways.

For the study, we teamed up with TGS who provided data from more than 60 key onshore wells. By carrying out our own geochemical and petrophysical analysis as the basis for play fairway mapping and volumetric assessment, we have gained some valuable insights into UK shale potential. We created low, mid and high case maximum burial maps on the main shale horizons, converted these to maturity maps and integrated them with shale property maps to make estimates of volumes of petroleum generated, shale storage capacity and hydrocarbons-in-place. Contrary to many expectations, we’ve shown that vitrinite reflectance data are reliable, and also that hydrocarbons can be identified within the shales.

Whilst the UK is at an early stage of shale exploration, our evaluation confirms that Carboniferous and Jurassic oil-prone source rocks have generated considerable volumes of oil and gas, and constitute potentially attractive shale plays. In addition, we’ve identified some more speculative shale plays which require further data and evaluation.

For the main plays, we’ve prepared Common Risk Segment (CRS) maps and identified which blocks currently being offered by DECC fall within the highgraded areas of each shale fairway. Whilst a part of the highgraded acreage is already licensed, the CRS maps and block rankings show that there is a substantial number of open blocks which offer access to potentially attractive shale acreage within the identified ‘sweet spots’.

So does the shale resource provide the opportunity to transform UK energy supply? Well, there is no doubt that considerable volumes of oil and gas have been generated and that much of this petroleum remains to be produced. As technology evolves and operational practices are refined, the opportunity to exploit these resources is likely to grow, perhaps dramatically, provided that costs are controlled and the critical social and environmental factors are managed effectively.

http://www.oilvoice.com/n/UK-energy-supply-a-shale-revolution/20fdf6232820.aspx#gsc.tab=0