It may not have the romance of the 49ers or the glamour of Dallas. But the Great UK Shale Gas rush of 2013 has all the features of a modern gold rush – small players risking their investors’ money and hoping that they will be the ones to strike it rich.
In October, the chancellor threw his weight behind the rush, saying he wanted to “[open] up the newly discovered shale gas reserves beneath our land” and promising that the government would consult “on a generous new tax regime for shale so that Britain is not left behind as gas prices tumble on the other side of the Atlantic”.
The big oil and gas companies have been notably less enthusiastic about shale gas – at least in public. The British Gas boss Sam Laidlaw and Christof Ruhl, the chief economist of BP, have both separately played down the potential in the UK, describing it as not a “game-changer”.
So far, the UK’s nascent shale gas industry has just one big player – Cuadrilla Resources, which was formed in 2007.
In February 2010 it received some serious financial muscle from Riverstone Holdings through its Cayman Island joint private equity fund with Carlyle, the US asset management giant. The two investors both hold a little over 40% of Cuadrilla.
This gave Cuadrilla access to the funds it needed to begin serious exploration in the Bowland Basin between Blackpool and Preston in Lancashire where it has drilled six wells. Cuadrilla used fracking to explore for shale gas. But the controversial technique, involving the hydraulic fracturing of rock, was blamed for causing two earthquakes in Blackpool and drilling was stopped. Cuadrilla has now been given government permission to start drilling again.