A giant gas field has been discovered under Lincolnshire that could fuel the UK’s entire needs for a decade, reducing dependence on imports and generating tens of thousands of jobs, an energy company has claimed.
Egdon Resources, the business behind the discovery, is to formally announce its findings at an energy industry conference later this month.
Its preliminary work suggests that the field, centred on the market town of Gainsborough, is so large that it could benefit the whole UK economy, boosting growth through more jobs, increased tax revenue and cheaper energy.
If subsequent drilling confirms the scale of the find, it is likely to reignite the debate about fracking – and create a potential clash between Rachel Reeves, the Chancellor, and Ed Miliband, the Energy Secretary, as the Government attempts to chart a course between net zero and economic growth.
Fracking, the process of extracting gas by pumping ultra-high pressure liquid underground to crack the bedrock, is currently banned in Britain after previous work triggered small earthquakes.
Exploiting the field would mean ending this moratorium as well as lifting a ban on new oil and gas licencing introduced by Mr Miliband, whose own constituency of Doncaster North is close to part of the discovery.
It comes after Ms Reeves announced Labour’s support for a third runway at Heathrow Airport, despite longstanding opposition to the scheme from Mr Miliband. Earlier this year the Chancellor emphasised that growth, not net zero, was the Government’s “No 1 mission”.
Mark Abbott, chief executive of Egdon, said the company had spent several years quietly investigating the extent of the field, including test drilling. The results have since been scrutinised by geologists, with Deloitte commissioned to analyse the economic impacts of developing the field.
During that time Egdon, which already operates some smaller onshore oil and gas wells, was bought out by Heyco, a privately-owned US energy firm, which was specifically interested in the scale of its reserves.
Deloitte estimated that exploiting the Gainsborough Trough field could add up to $140bn (£112bn) to GDP, yield $34bn in direct taxation and create tens of thousands of jobs. It said that CO2 emissions would be 218m tonnes lower than if Britain uses imported gas instead.
The Gainsborough Trough is a geological feature that has long been suspected of holding major fossil fuel resources.
About 300m years ago, most of the United Kingdom lay near the equator and under water. Over millions of years what is now the trough filled with decomposing organic matter that then became compressed by more sediments – turning it into oil and gas.
The area already supports two dozen small onshore oil wells but Egdon drilled into different strata, ancient mudstones lying about 2km deep, to find the gas.
It calculates that the field holds at least 480bn cubic metres of recoverable gas – about seven times the UK’s current annual consumption. Because gas usage is expected to decline in future, the reserve would be likely to last a decade.
It means the Gainsborough field is potentially much larger than Shell’s controversial North Sea Jackdaw development which is estimated to hold 38bn cubic metres.
The discovery lies under sparsely populated rural land centred on Gainsborough, Lincolnshire, but extending west towards Sheffield and north towards Doncaste, South Yorkshire.
“Our results compare favourably with US commercial shale operations and are potentially world class,” said Mr Abbott.
“We could access all that energy from drilling pads on the ground above, each roughly the size of one or two football fields. The land take would be far smaller than for solar farms and the energy produced would be far greater.”
Egdon’s results will be formally announced at the Lincolnshire Energy Conference at the University of Lincoln later this month by Mr Abbot along with George Yates, the chief executive of Texas-based Heyco.
The UK consumes about 75bn cubic metres of natural gas a year – equivalent to about 1,100 cubic metres per person. Gas is used to generate a third of the UK’s electricity and 25m homes relying on it to power the gas boilers that provide their heat and hot water.
Two decades ago, the country got all its gas from the North Sea but our offshore fields are in decline. Britain now imports about 30bn cubic metres of gas from Norway with another 15bn arriving as liquefied natural gas (LNG) shipped mainly from the United States and Qatar.
The UK’s reliance on imports also means it is vulnerable to the price shocks and shortages that regularly hit global markets. Domestic and industrial prices are among the highest in the world.
Politicians have, however, made clear that paying high prices is preferable to allowing fracking.
The technique was widely used in onshore British oil and gas wells from the 1980s, but mostly at smaller sites.
A massive expansion of high-volume fracking in the US, and resulting huge production increases, prompted interest in deploying it Britain as well.
However, the first such attempt, by Cuadrilla near Blackpool in 2011, generated minor earth tremors and protests that so alarmed politicians that fracking was banned – despite Royal Society research showing there was minimal risk.
Lincolnshire councillor Colin Davie, who oversees the county’s economic development plans, said the Gainsborough discovery offered such huge benefits for the county and the nation that it was time for Mr Miliband to reconsider his ban on new gas developments.
Mr Davie, a Conservative, said: “Successive UK governments have failed to address our energy challenges and energy costs for consumers and businesses are surging partly because of the obsession with renewables.
“Egdon’s announcement of a potentially huge gas field under Lincolnshire will pose many challenges for ministers but gas has a key role in reaching the long-term goal of a decarbonised grid.
“The pressure now is to reduce costs urgently before business moves abroad. The only way ministers can do this is by utilising the UK’s own oil and gas resources.”
Reform MP Richard Tice, whose Boston and Skegness constituency lies close to the gas field, said: “Reform are excited to hear of this new gas find which presents great opportunities for jobs, investment, growth, and lower bills as well as reducing imported CO2 emissions. Only Reform supports using our valuable shale gas like this and so creating real British jobs and growth.”
A spokesman for the Energy Department said: “We intend to ban fracking for good and make Britain a clean energy superpower to protect current and future generations. The biggest risk to our energy security is staying dependent on fossil fuel markets and only by sprinting to clean power by 2030 can the UK take back control of its energy and protect both family and national finances from price spikes.”
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