There will be no significant shale gas or oil production in the UK and Europe over the next twenty years – the authors of BP’s latest Energy Outlook booklet believe.
In the publication, covering years up to 2035, BP predicts that the U.S. shale boom will not be replicated elsewhere as the conditions leading to the rapid development in the unconventional oil and gas sector in the U.S. are unique.
Other countries might have large hydrocarbon reserves but, unlike in other parts of the world, U.S. is sparsely populated, has significant amounts of water, and a favourable climate toward hydrocarbon extraction; all of which is lacking in places like Europe. The country also has a highly competitive oil and gas industry involving numerous producers and service providers, as well as good infrastructure.
Most of these “below-the-ground” factors do not apply in the UK and Europe, while “above-the-ground” forces such as political will and regulations can take a long time to evolve, BP’s chief economist, Spencer Dale, told The Independent.
According to BP, the shale industry will ensure that the U.S. remains self-sufficient in oil until 2030s, after which date the US shale oil industry will eventually flatten.
“Our view is that the oil market will grow out of its current weakness. It may well take several years, but our view is that as the strong growth in tight oil flattens out and the global economy continues to grow, the oil market will rebalance,” he said
Despite BP’s gloomy predictions, shale exploration company Cuadrilla Resources continues to bet hard on British shale – even in the face of strong opposition from environmental groups and local residents.
“Where we are in Lancashire, we are still going forward,” Chief Executive Officer Francis Egan told Bloomberg television on the same day as BP’s report was released. “We have all the permits from the environment agency now.”
“We are pretty confident it will happen,” Egan said, commenting on the development of shale gas in the U.K.
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