San Antonio — Emulating the US' success in fracking natural gas from shale is necessary for a post-Brexit UK, but challenges remain in the environmental sector, former Prime Minister David Cameron said Tuesday.
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"I passionately believe that there is big potential for fracking and unconventional gas in Britain, which has some shale reserves that could make a real difference," said Cameron, the keynote speaker at the American Fuel and Petrochemicals Manufacturers annual conference in San Antonio.
"In the United States, there are 15,000, 16,000 shale wells. In Europe there are about 10 -- this is pathetic. We are going to fall behind if we don't extract the gas that we have that can make us more competitive, more energy independent, less reliant on Russian gas."
Cameron said that although the UK government set the groundwork for a successful shale play, while simultaneously cutting greenhouse gas emissions, environmental pressures have restricted progress since he left office in 2016.
"We passed the laws, changed the planning rules, talked to the companies, changed the regulations, set out the bonuses communities would stand to get if wells went ahead, but it was painfully slow and incredibly frustrating," Cameron said. "The green movements have become absolutely obsessed with the notion that any new form of energy that has any reliance on carbon is a bad thing, so they are just opposed to fracking, come what may.
"Yes, we will do it because there is so much in our national interest, it just may take some time. What we need are some wells up and running where the local community can see that they are not that disruptive, that there are big financial benefits, that they can see an industry can build up around it."
The vast majority of the UK's shale gas reserves are located in England, with the British Geological Survey pegging the Bowland Shale alone to have an estimated 1,329 Tcf in place.
Scotland, which has far smaller shale gas reserves than England, has proved more resistant to some new energy development technologies than other parts of the UK.
The Scottish government in October 2017 introduced an outright ban on the development of unconventional oil and gas, putting it at odds with UK government policy supporting the use of fracking. Switzerland-based Ineos, which holds interests in two shale gas licenses in Scotland, has appealed the ban.
Scotland's main Midland Valley has an estimated 49.4-134.6 Tcf of shale gas in place, with a central estimate of 80.3 Tcf, according to BGS data.
The past five years have seen US exports of natural gas liquids -- ethane in particular -- rise sharply amid stronger global demand for LPG, thanks in part to cheap production via domestic fracking.
Consequently, LPG and ethane are now seen as the fastest-growing category of global oil demand by product at 2.6%/year from 2017 to 2023, outpacing naphtha, the second-fastest growing product at 1.9%/year, according to the International Energy Agency.
The economic advantage of gas over the alternative naphtha -- the most widely used petrochemical feedstock in Europe -- is illustrated by the latest available prices.
While S&P Global Platts on Tuesday assessed Mont Belvieu non-LST purity ethane M1 at 27 cents/gal ($200.34/mt), naphtha in Europe was assessed the same day at $595.25/mt CIF NWE.
(Corrects Tuesday price of ethane in cents/gal in final paragraph)