Globe and Mail: Britain’s shale-gas revolution faces a tough sell

Lord John Browne, the former CEO of British oil giant BP, thinks Britain is on the verge of a shale-gas revolution, one with the potential to bring down energy prices, create scads of industrial jobs and reduce the country’s carbon output. He might be wrong, and if he is, Britain, and the other parts of Europe that are sitting on vast amounts of shale gas, face a transAtlantic energy war they are bound to lose.

Europe is already losing: Its (waning) debt crisis is on the verge of evolving into an energy crisis as U.S. and Canadian natural gas prices plummet, thanks to the Wild West-style shale gas bonanza. While gas prices vary considerably, American gas generally trades for $3 to $4 (U.S.) per thousand cubic feet. In Britain, the price is two or three times higher and higher still on some parts of the continent.

Mr. Browne, who turned BP into a super-major before resigning in 2007, is such a believer in shale gas that he became a managing partner of Riverstone Holdings, a U.S. private equity firm that has raised $26-billion to invest in all manner of energy. One of its holdings is Cuadrilla Resources, the British oil and gas company that is trying to make shale drilling socially acceptable and commercially viable in Britain.  

With anti-shale protests erupting here and there, that will be no easy task. Still, Mr. Browne thinks shale’s development in Britain is inevitable. “There is a very good probability that we have a large source of unconventional gas onshore,” he said in an interview in Riverstone’s London office this week. “I think it can be developed safely. The advantages to the U.K. are significant … I think it’s unwise to neglect resources that you’ve got.” MORE