Nearly 2m homes in the UK will be heated by shale gas from the US within five years, under a deal agreed on Monday that is likely to be the first time major exports of the controversial energy source are used in the UK.
The US government has kept a tight rein on exports since the shale gas boom started more than five years ago. But the deal struck by energy company Centrica marks the start of a new era in gas use in the UK, because it opens up the market to cheap supplies from the US, as North Sea gas fields run out and pipelines to Europe remain expensive.
Shale gas exploitation has been blamed for environmental problems in the US, including water, ground and air pollution and leaks of methane.
Under the deal, Centrica will pay £10bn over 20 years for 89bn cubic feet of gas annually – enough to heat 1.8m homes – from Cheniere, one of the first US companies to receive clearance from the federal government to export shale gas in the form of LNG (liquefied natural gas). The first deliveries, by tanker, are expected in 2018.
The announcement of the deal comes at a crucial time, as Britain’s gas reserves have been severely depleted by the unseasonable cold snap, which has increased demand. Last week, it emerged that there were only two days’ worth of gas left in storage.