The UK shale gas industry has the potential to generate investment of £33 billion and deliver tens of thousands of jobs.
The figures are contained in a new report commissioned by industry body UK Onshore Operators Group (UKOOG) and based on a top-line estimate from the Institute of Directors suggesting 4,000 horizontal wells could be drilled at locations across the UK by 2032.
In December the Department of Energy and Climate Change said huge swathes of central Scotland, running from Dumfries and Galloway to north of Montrose, offered shale gas exploration potential.
The new UKOOG report, compiled by professional services group EY, states that shale could produce up to 64,000 jobs in the direct and indirect supply chain as the industry matured.
However the study warns that much work needs to be done if the economic potential of shale, which is extracted by the controversial process of hydraulic fracturing or ‘fracking’, is to be harnessed.
Issues facing the fledgling industry include the build-out of major infrastructure, the establishment of a new supply chain and the recruitment of skilled personnel.
“We wanted to answer three important questions as part of this study,” UKOOG chief executive Ken Cronin said. “First: what will it take to build a shale gas pad in the UK in terms of supply chain and skills?
“Second: what are our capabilities in the UK?
“And, finally, what do we need to do in order to fill those gaps and to stimulate the supply chain and skills we already have?
“What we have found is a truly enormous opportunity for the UK.”
Huge investment will be needed to pursue shale gas, with a single exploration pad which could contain up to 10 vertical and 40 lateral wells costing in the order of £333 million to bring on-stream.
At peak activity levels the study estimated that 50 landward rigs, with a potential £1.6bn price tag, would be required and 12,600km of underground steel casings.
“This report focuses on what is required to ramp-up for production,” Mr Cronin said. “It shows that in most sectors we have the capability to supply this industry.
“In some sectors, such as rig manufacturing, we will need to bridge the gap between the industry being able to deliver a sustainable order book and the need for early capital commitment by the supply chain.
“In other sectors, such as steel, we may need to help suppliers to open up new product lines.”
Author Chris Lewis said the potential for shale gas in the UK was “impressive” and offered “a unique opportunity to secure the future of next generations of energy users”.
However, he said a standardised approach to shale exploration was required in order to unlock investment.
“Putting a good launch pad in place so we are ready to push the green button and start exploring the UK’s reserves should be on top of our to-do list,” he said.
Energy Minister Michael Fallon said: “The report demonstrates the big prize that could be available to the UK in terms of jobs and manufacturing in the supply chain for our onshore oil and gas industry.
“Just as importantly, it makes clear what needs to be done to be ready to seize this opportunity.”