Businesses told to get ready for £33bn shale gas industry
ENERGY minister Michael Fallon is urging companies to “get ready for shale” on the back of a supply chain report which estimates the industry could spend £33bn over the next 15 years.
The study, carried out by EY for industry body the UK Onshore Oil Group (UKOOG), is based on the requirements of around 4,000 shale gas wells.
At this scale it says the industry would require specialist equipment such as pumps and trucks worth £17bn, some £4.1bn of waste treatment services, around £2.3bn of steel, and rigs worth £1.6bn.
It estimates the industry will support around 64,500 direct and indirect jobs at its peak, slightly lower than the Institute of Directors’ estimate of 74,000.
Cuadrilla Resources and IGas are the only companies operating in the North West as present. They have both carried out exploratory drilling and have not yet moved into the production phase.
Once this happens, wells are fracked, which means a mixture of water, chemicals and sand are pumped deep underground to create cracks in the shale bed which allow the gas to escape. Opponents argue this process can cause air and water pollution.
All the activity and the investment takes place during the fracking period, after which the rig is taken down and the well is left to produce gas for around 10 years.
UKOOG chief executive Ken Cronin said: “We have a lot of work to do in terms of working with the communities involved, understanding geology, flow rates and the cost base. Keeping the economic benefits in the UK of the supply chain is not a given, but the potential level of benefits as highlighted in this report should make it an economic imperative that we should make the best possible attempt.”
Energy minister Michael Fallon said: “I want this report to be a call to action for the UK supply chain for small and large companies, whether in Lancashire or Lowestoft, whether in the steel industry, the chemical industry, or in other manufacturing and services. The message is to get ready for shale.”
