Monday, 18 May 2015 GMT
Author: Staveley Head
April brought us the news that the citizens of southern England were standing on a pile of black gold.
According to UK Oil & Gas Investments (UKOG), an analysis of a well at Horse Hill, Sussex showed there could be around 100 billion barrels of oil beneath the surface of this leafy county. To put this in some sort of perspective, ‘only’ 45bn barrels have been extracted from the North Sea in 40 years.
All this could be good news for the economy. The UK’s oil and gas industry has seen better days even with George Osborne’s North Sea oil tax relief. New sources of fuel mean more opportunities for the sector, which in turn means greater tax revenue as well as new jobs being created.
So will we see the beginning of a mass drilling programme all over the country as we search for more? And how exactly will we benefit from this if we do that?
To begin with, most of us would hope to see our petrol prices fall. But dig a little deeper (forgive the pun) and a different truth appears…
For a start, we won’t be getting all 100 billion barrels out of the ground, even if there’s that much down there. UKOG only hope to get 5%-15% of the stuff, and even then we won’t be seeing a fall in petrol prices.
This graph might explain why.
The upper estimate of oil we’ll extract from Horse Hill is less than half of what the world produces every year. Getting this new oil out of the ground will be a process that takes decades and, of course, costs a fortune to do.
Plus, petrol prices are linked to the global market so you need a globally significant amount to change anything. And Horse Hill doesn’t have that much.
And we’re talking about oil here. We live in a world where we’re supposed to be going green. Solar panels on every roof, a wind turbine in every garden – that kind of thing. So is digging up another green and gorgeous part of the world for fossil fuels really an acceptable option?
Even before we count the cost of the damage caused by burning the fuel, the extraction process itself can contaminate local water supplies and soil. Then there’s the issue of accidental damage which, as we saw with the BP Deepwater Horizon disaster, can be devastating.
The use of electric cars is on the rise and while they’re not ready to take over from petrol cars just yet, how do we know where we’ll be in ten years? It’s possible that technological advances will make the electric car the norm leaving us with a gaping hole in the ground full of a pool of black sludge we don’t need.
But that’s tomorrow. Right now we need oil and with the majority of sources of it being half way round the world, having a massive energy source closer to home will save us money in oil transport costs, reduce our reliance on foreign markets and even increase our exports.
So to drill or not to drill? Click here to head over to our Facebook page and let us know what you think.