Gas Could Power Economic Boom; the Fracking Debate: Will It Usher in a New Industrial Revolution for South Wales?
Byline: Peter Law
ENOUGH natural gas to meet the UK's demands for four years and transform the Welsh economy could be trapped beneath South Wales, a new report has found.
The discovery could be worth up to pounds 70bn and has been compared to some of the biggest energy projects in the world.
Experts say it has the potential to create thousands of jobs and be worth billions of pounds.
Australian exploration firm Eden Energy, which holds numerous licences to exploit gas reserves in South Wales, commissioned US consultants RPS Group to investigate the region's potential shale gas reserves.
The findings were last night described as potentially "colossal" and of "national significance" by Eden Energy's boss.
Academic experts also said it could lead to the creation of a major new industry in South Wales.
In its report, RPS Group - renowned experts in shale gas - said Eden Energy's exploration licences in South Wales could hold 34 trillion cubic feet of gas, of which 12.8 trillion cubic feet is classified as recoverable.
In 2009 the UK used a total of 3.6 trillion cubic feet of gas.
So, if the estimates prove correct, the amount is equivalent to four years of the UK's gas consumption.
Speaking from the company's head office in Perth, Western Australia, Eden Energy's executive chairman Gregory Solomon said the estimates vastly exceeded even the company's own expectations.
"This has got the potential to literally transform the Welsh economy - no question at all. We're talking about potentially huge quantities of gas," Mr Solomon said.
"The aggregated potential resource is of truly national significance.
"It has to be proven up, obviously, but the potential is very significant."
Eden Energy shares the licence to exploit gas beneath some 800 sq km between Swansea and Cardiff with Bridgend-based company Coastal Oil and Gas.
As first reported by the Echo earlier this year, the companies want to carry out test drills for coal-seam and shale gas in Maesteg and Llandow, in the Vale of Glamorgan.
If these tests find gas the company could use a controversial process known as "fracking" to extract it.
Fracking involves pumping a mixture of water, sand and chemicals and has been blamed for cases of water contamination in the US, but a cross-party group of MPs rejected the safety concerns last month.
RPS Group was commissioned by Eden Energy to analyse drill cores from previous oil and gas holes from the 1970s, thousands of feet underground in the region's Namurian shale.
Market analysts in Australia compared the size of any potential project to Gorgon, an offshore liquefied natural gas (LNG) field off Western Australia that is being developed at a cost of more than pounds 26bn by energy giants Chevron, Shell and Mobil.
It is Australia's biggest ever resource project, with an estimated 40 trillion cubic feet of recoverable gas. It's expected to create 10,000 jobs and produce 15 million tonnes of LNG per year for up to 60 years.
Mr Solomon said the firm would probably use the gas to either produce electricity or put it directly into the natural gas grid as compressed natural gas (CNG).
He said there would be a "very large amount" of investment into South Wales during the exploration and development stage and in the running and supplying of the gas. …