Shale gas drilling

Britain'sfirst drilling campaign for shale gas has beaten expectations, with the company responsible estimating 5,660bn cubic metres lie beneath the county of Lancashire in north-west England. This suggests the UK has significantly more of the resource than earlier surveys predicted.

After completing three exploration wells, Cuadrilla Resources said that its licence area held enough "gas-in-place" to supply Britain's entire annual gas requirement for more than 56 years - at least in theory.

In practice, only a fraction is likely to prove recoverable. Experience in the US, where shale gas production has transformed the energy market, suggests recovery rates of 10-20 per cent.

Mark Miller, Cuadrilla's chief executive, said: "The big recoverable reserves start with a very big 'gas-in-place' number. We've ticked that first box." He added: "We're equivalent to - or exceeding - the gas per square mile that you'd find in the really successful plays in the US."

Earlier estimates for the amount of shale gas in the UK now look very cautious. The British Geological Survey had thought the country possessed only 150bn cu m.

Cuadrilla's estimate - the first to arise from an actual drilling campaign - applies only to its 437 square mile licence area between the town of Blackpool and the City of Preston, where the Bowland shale rock formation lies 10,000ft beneath the surface. Three other concentrations of shale rock, known as "plays", are found elsewhere in Britain.

Mr Miller declined to say what proportion of the resources in Lancashire was likely to prove recoverable.

Nonetheless, Tim Yeo, the Conservative MP who chairs the energy select committee, described Cuadrilla's announcement as "very good news" and "more significant than I had appreciated". He added that shale gas production should go ahead. "I see no practical or regulatory reason why we should not," he said.

Cuadrilla will now drill between four and six more exploration wells with the aim of establishing how much of the gas can be extracted. After an estimate is published next summer, the company will decide whether to proceed to the production stage.

Mr Miller declined to prejudge that decision. The Department of Energy and Climate Change would have to give permission for production to start.

Environmentalists say that drilling for shale gas could risk contaminating groundwater aquifers. They have also objected to "fracking", the process by which gas is extracted from subterranean rocks using high pressure jets of water.

Mr Yeo said that Cuadrilla would need to secure public confidence before production could begin. "We have a good history of sensible regulation in this country," he said. "Once people have overcome their anxieties about the technology - which I suspect they will do - I see no reason why they shouldn't start."