Oil & Gas Monitor Publishes Marc Hammerson Article on UK Energy Industry
“The Rise, Fall, and Possible Renaissance of the United Kingdom’s Petroleum Industry,” an article by Akin Gump London corporate partner Marc Hammerson, has been published by Oil & Gas Monitor.
In this article, Hammerson traces recent UK energy history and takes up the question of whether the UK can enjoy the sort of shale gas revolution underway in the United States.
He notes that, while enthusiasm in the UK “is understandable,” given recent surveys that estimate shale gas reserves at “1300 trillion cubic feet in the north of England alone,” five reality checks should be taken into account: only 10 percent of these unproven reserves are likely to be recoverable; the recoverable reserves are less than 5 percent of the U.S.’s equivalent reserves; UK shale gas development is being proposed at sites near major cities, which has already provoked protests; there are few financial incentives for local communities to allow shale development; and, to date, there has been no commercial production of shale gas in the UK.
Hammerson closes his article by looking back at the 1970s and the debate over exploitation of the then-newly discovered North Sea reserves and revisiting a question asked then: whether the UK should bring in foreign expertise or create a state-owned oil company capable of exploiting reserves. He responds, “The former choice prevailed – and the early North Sea industry relied on the experience of a number of U.S. companies (such as Amoco, Conoco, Exxon and Phillips Petroleum). As the UK’s shale industry develops, it is likely that history will repeat itself.”
To read the full article, please click here.