Background

Background

Britain generated approximately 340TWH of electricity in 2014, of which renewables generated 25%, coal 20%, nuclear 21% and gas 20%, imports 7%, plus others. Coal was also up to 30% of the primary power consumed in the UK, which also includes heating, transport etc. (Uk. Gov. Statistics))

The government has stated that all coal fired stations will close by 2025 or earlier.

The CO2 emitted is a function of the carbon content of the fuel and coal has approximately twice the emissions of natural gas, and up to 4 times the NOx (nitrogen oxides); therefore replacing coal by gas improves our carbon credentials.

Renewables are growing and will continue to grow, but cannot meet all the demand for energy in the short to medium term. We also need time to develop technology, storage solutions, capture system etc. to achieve a zero carbon by 2050; therefore gas will play an important interim role.

In 2013 Britain had its highest level of imported energy since 1974.

Natural gas is a primary resource amongst others for our chemical industries.

Shale Gas is equivalent to natural gas and better than liquefied natural gas with reference to climate change, as it does not use the energy intensive, cooling and compression processes.

 Potential

Barrow lies in the Mersey basin for geological purposes, and a 2D seismic survey carried out in early 2015 showed the potential in Cheshire for the exploitation of hydrocarbons by modern means.

Exploration licence PEDL190 is north of grid line 370, i.e. for Barrow this is approximately the railway line. PEDL 189 is south of the railway line (ref www.gov.uk petroleum act 1998). Both licences are held by a 50% joint venture between INEOS (www.ineos.com) and Igas (www.igasplc.com) with Igas as the Operator.

A 3D seismic survey by Tesla Exploration International on behalf of Igas of the Barrow area and other areas has been completed in November 2015, to define in detail the underlying geological formations. The analysis of the 3D survey should be completed at the earliest by the end of Quarter 1 2016.

The 3D survey will not only define where the potential hydrocarbon beds will lie, i.e. Coal based methane, or shale gas, but also the faulting structure of the fields and therefore also the areas to avoid.

Therefore until this survey is fully analysed, it is too early to speculate on the type of gas, CBM or shale, the number of wells per location and the number of locations etc.

However the commercial economics of this exploitation will be determined by a variety of factors,

  • Not least the cost of energy, which at the end of 2015 is low and looks to remain so for the foreseeable future.
  • The cost of extraction, dependant on gas flow rates, operating costs etc.
  • Government intervention re sustainability, energy security, import substitution, carbon costing etc.