Bloomberg: U.K. Shale Gas Will Fail to Unleash U.S.-Style Collapse in Price

The U.K.’s efforts to build a shale gas industry will fail to unleash the decline in prices that has benefited U.S. fuel consumers as its cost of extraction will be too high and output too slow, Bloomberg New Energy Finance said.

“The cost of shale gas extraction in the U.K. is likely to be significantly higher than in the U.S., and the rate of exploitation insufficient to offset the decline in conventional gas production, meaning market prices will continue to be set by imported gas,” the London-based researcher said today.

U.K. Chancellor of the Exchequer George Osborne plans tax breaks to spur shale development after a boom in the industry in the U.S. saw the nation become the world’s biggest gas producer. Britain in December lifted a ban on hydraulic fracturing, the technique used to tap fuel from shale rock, and imposed safety controls after drilling triggered minor earthquakes in 2011.   MORE