The development of shale gas could create a sizeable opportunity for private investors in the UK, according to an EY report commissioned by the United Kingdom Onshore Operators Group (UKOOG).
The industry body claims that around £33 billion (€40 billion; $55 billion) will need to be disbursed on supply chain activities if the country is to build up its shale industry, which it says could be responsible for drilling 4,000 wells over the next 18 years.
This could generate potential investments worth £4.1 billion in the waste, storage and transportation sectors, the report said.
“More work is required by industry, government and regulators to understand what is possible with respect to localised and centralised services. In addition, investment will also be needed in order to bridge the gap as the industry grows.”
Other major spending priorities will be equipment and skills for hydraulic fracturing, to the tune of £17 billion, steel supplies, on which £2.3 billion will need to be spent, and rig manufacturing, which could see £1.6 billion coming its way.
A shale gas boom would also come with sizeable employment dividends, with 64,000 jobs needed at peak to look after the sites and carry through related supply chain activities.
Yet the report said the UK needed to do more to make the case for shale gas and relieve the country from impending constraints.
“The current lack of a clear framework standardising the approach towards shale gas exploration as well as the lack of relevant skills need to be addressed to unlock further investment,” said Chris Lewis, a partner at EY.
Remedies to potential bottlenecks, the report suggested, included increased investment in shared infrastructure for water treatment, waste disposal and gas processing.