PÖYRY POINT OF VIEW ARTICLE / 6 Nov 2012
How will Lancashire shale gas impact the GB energy market?
Shale gas production in the US has led to a dramatic drop in gas prices and has returned the US to near self-sufficiency in natural gas. Meanwhile, in Europe, shale gas continues to be hotly debated.
Shale gas production in the US is massive, exceeding 200bcm per annum. This has led to a dramatic drop in gas prices and has returned the US to near self-sufficiency in natural gas. High volumes of shale gas have even triggered requests for LNG exports. However, the US picture has not been replicated anywhere in the world. In Europe, shale gas continues to be hotly debated.
In this Point of View we explore:
- How will GB’s gas and electricity markets be affected by substantial Lancashire shale gas production?
- Are there any incremental benefits on wholesale GB gas prices and electricity prices?
- What is the influence of shale gas on import dependency?
- Whether renewable targets can be met if GB exploits the potential of Lancashire shale gas?
Point of View Overview
Pöyry originally conducted a detailed analysis on the impact of shale gas on the GB gas market for Ofgem (the GB energy regulator) in 2011. We have revisited our Ofgem study findings in light of new information relating to Lancashire shale gas, specifically, new resource estimates and potential production profiles. This Point of View shares these latest findings.