UK shale gas jobs and spend mapped for the first time

Using previously published research, we've mapped the potential distribution of shale gas jobs and spend across the UK

 

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People are always asking how many jobs there will be around the country, and what shale gas could be worth in terms of contracting opportunities for local businesses in the areas where it takes place, so we decided to see if we could answer these questions using existing research and reports.

As far as we're aware, this is the first time anyone has attempted this.

We've done it by mapping the figures from the 2013 Institute of Directors report "Getting Shale Gas Working" (which suggested that we might one day see a total of 100 shale gas pads developed nationally, each comprising of 40 horizontal wells so 4,000 wells in total) and the 2014 EY report "Getting Ready For Shale Gas" (which contains the prediction that bringing those 4,000 wells into production might be responsible for over 64,500 jobs and spend of £33 billion).

We've discounted the 6,092 EY predicted "direct" jobs because we figure these are going to be the most specialised and likely to move around the county, where as the indirect (supply chain) and induced (jobs in the wider economy, like hotels and restaurants etc) are much more likely to be localised.

In order to go from national to local, we consulted the Oil and Gas Authority public record concerning exploration licences that cover parts of the country where shale gas is believed to exist underground, and ascertained the total land area under licence by county. Armed with this information, it was possible to calculate the spatial distribution of jobs etc by licensed area. 

It's not perfect, but it at least provides an illustration of how it could look if those earlier industry-backed predictions are proved accurate.

In Lancashire, where Cuadrilla, Osprey Oil and Gas, Warwick Energy, Aurora Energy Resources and Hutton Energy have licence blocks, we might see 18 sites developed consisting of 720 horizontal wells. This would support over 10,000 indirect and induced jobs and result in a local spend of £5.91 billion. In North Yorkshire, using this same methodology, we might expect to see 960 wells drilled from just 24 sites, with over 14,000 jobs and a supply chain spend of just over £8 billion.

Even assuming that each site is 3 hectares in size, under these assumptions it would mean shale gas production would take up just 0.5 square kilometres in Lancashire, 0.7 square kilometres in North Yorkshire and actually only 3 square kilometres for the entire UK.

And yet, for that minor surface impact, it could be possible to produce 12,800 billion cubic feet of gas to help substitute for imports of Liquefied Natural Gas (LNG) from Qatar.

Of course, much will depend on the volumes of gas that are encountered during the current exploration works that are underway, and whether it can be made to flow in sufficient quantities, so like all predictions made about this industry, this could still prove inaccurate. But in the absence of anything else, it at least gives an indication of what shale gas may look like at scale should it achieve the ambitions for the industry set out by the Institute of Directors and EY.


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