Marc Hammerson Quoted on US, UK Shale Gas Extraction
Akin Gump London-based partner Marc Hammerson was interviewed by The Lawyer on the topic of the U.K. shale market and how it compares with that in the United States.
Hammerson, whose practice focuses on M&A, joint ventures and project development in the energy industry, expects an upturn in activity in the U.K. shale market. But he suggests it is unlikely to have the same impact as it has had in the United States: “Developments in U.S. shale gas follow a tradition of onshore production in less densely populated areas. The U.K. does not have comparable land mass. Nor does it have a history of onshore production. However, shale may change this. U.K. onshore petroleum production makes up about 1 percent of the country’s output— the rest is offshore.”
He noted that two key factors are likely to change these proportions: the decline in North Sea production and the hydraulic fracturing technology used on onshore resources.
“The last time there was a concerted effort to develop onshore petroleum here was 80 years ago. We aren’t used to land-based production. Shale gas may change this. Ofgem predicts a 25 percent fall in domestic gas production by 2020. This will affect consumer energy prices. Politicians are increasingly looking at the pricing impact of shale gas on the U.S. energy market and seeing whether it can be repeated here.”