POLITICS

U.S. shale gas will be warming British homes by 2018

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Politics,Beltway Confidential,Michal Conger

Shale gas is a controversial energy source in the United States, but the U.K. will soon benefit from the U.S.’s natural gas boom. British company Centrica announced a deal with Cheniere Energy Partners on Monday to provide enough gas to heat almost 2 million homes starting in 2018.

The deal is the first time major exports of shale gas will be used in the U.K., according to the Guardian.

Shale gas is a controversial energy source in the U.S. because it is recovered from shale rock formations by fracking, a drilling method environmental groups say can harm the earth and pollute drinking water supplies. The practice is under review by the Environmental Protection Agency and several state governments, including New York, which sits on one of the largest shale gas reserves in the country.

But fracking has also made U.S. gas prices some of the lowest in the world, the Congressional Research Service found rccently. The U.S. is now the leading producer of natural gas, outpacing Russia, which supplies much of Britain’s natural gas.

“In 2011, the United States produced and consumed more natural gas than it ever has—23 trillion cubic feet (tcf) and 24 tcf, respectively—while paying some of the lowest market prices for  natural gas in the world.,” CRS said. Gas prices in the U.S. are at about $2 a unit, compared with about $10 to $12 in Europe and Japan, according to the Guardian. Britain’s gas reserves have been severely depleted by unusually cold weather, the British newspaper reported. The country depends on imports for much of its gas, and hopes the deal with Cheniere will help give some security to its energy supply. “I warmly welcome this commercial agreement between Centrica and Cheniere,” Prime Minister David Cameron said in a statement Monday. “Future gas supplies from the U.S. will help diversify our energy mix and provide British consumers with a new long-term, secure and affordable source of fuel.” The British government lifted a year-long moratorium on fracking in December. British energy companies say there are “huge reserves to be exploited,” CNN reported at the time. BP and British Gas have also signed deals on U.S. gas imports to the U.K. in the past two years, the Guardian reports, but they may take longer to reach delivery and probably will not reach the same volume as the Centrica deal.Cheniere will export its gas from Sabine Pass liquefaction plant in Louisiana.
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