Shale gas 'could boost Scottish economy'

Environmental campaigners are concerned about the potential impact of fracking

Scotland may contain "significant" shale oil and gas resources which could provide an economic boost if successfully exploited, according to a report.

An expert group set up by the Scottish government said it believed the resources could be extracted safely.

And it did not believe there were any major technological barriers to creating an industry.

Environmental groups said the report raised a number of serious concerns.

The expert scientific panel was established by the Scottish government last year to look at the existing evidence on the development of an onshore industry.

It was published as the bidding process for firms extracting shale energy using the controversial fracking method across the UK got under way.

The panel's report found that the shale gas "revolution" in the US has raised interest in the issue elsewhere in the world, including Scotland.

Summarising the findings, the report stated: "There could be positive economic impacts from the development of an unconventional oil and gas industry, in terms of jobs created, taxes paid and gross value added.

"The scale of the impact in Scotland is subject to debate and may only become clear once development is under way. Lack of infrastructure, such as drilling rigs, could have an impact.

"Suitable petrochemical feed-stocks from the North Sea are declining, in particular ethane and other light hydrocarbons.

"The potential availability of these feed-stocks from unconventional oil and gas resources in Scotland could have a beneficial impact on Scotland's petro-chemical industry in the long-term."

Technical challenges

The report noted Scotland's geology suggested that it could have significant reserves of oil and gas, with the greatest potential reserves likely to be in the Midland Valley, also known as the Central Lowlands, Scotland's most densely-populated area, which includes Glasgow, Edinburgh and Stirling.

It added: "When viewed in the context of the factors that have supported coal bed methane and shale gas development in other countries, it seems likely that unconventional gas could be developed in Scotland at scale".

The report said any technical challenges to the development were surmountable and that the necessary regulatory framework is largely in place.

But it also acknowledged public concerns around extraction and the possible impacts on people as it recommended early consultation with communities.

"The development of any new industry is likely to impact society - detecting and alleviating negative impacts, and enhancing positive impacts, is complicated unless careful planning of how to identify impacts is undertaken," the report said.

"Public concerns around unconventional oil and gas development include concerns about technical risk such as water contamination, public health and seismicity, but also wider issues such as social impacts on communities, effect on climate targets and trust in operators, regulators and policymakers."

Panel chairman Dr Chris Masters said: "It is clear that the development of unconventional hydrocarbons has had a profound effect on the economy of the United States with global repercussions in terms of gas and chemical feedstock prices.

"While it is unlikely that Scotland, or indeed, Europe, would benefit to a similar degree, there could be a number of positive economic impacts from the development of unconventional hydrocarbons, particularly in the petrochemical industry."

Energy Minister Fergus Ewing said the Scottish government would set up a working group to consider the panel's findings and ensure regulation of the industry was robust.

He said: "The panel report gives us an opportunity to consider some areas that may require further analysis.

"The views of the local communities are of prime importance to us and they will have an opportunity to feed their views and concerns into this group."

But the report also pointed to the likely impact on society of any new industry and public concerns around such development in terms of health and climate targets.

Friends of the Earth Scotland's head of campaigns Mary Church said ministers should put a moratorium on all unconventional gas extraction until a full assessment of the public health implications had been carried out.

She said: "The analysis clearly demonstrates that even if all the environmental, health and regulatory issues could be overcome, there still wouldn't be a US-style bonanza here, simply because the cost of extraction and the technical and geological challenges are too great.

"It is simply wishful thinking to imagine that it is possible to safely frack for unconventional gas in the most densely populated part of the country."

Last month, a report by the British Geological Survey estimated that there were 80 trillion cubic feet of shale gas in central Scotland and six billion barrels of shale oil.

That compared to 1,300 trillion cubic feet in the north of England and 4.4 billion barrels in the south.

It said it expected the amount of oil and gas which could be commercially recovered to be "substantially" lower.