Controversial Shale Gas 'Could Boost Britain'

Shale gas production could reduce Britain’s dependency on imported gas and create new jobs, according to a report by the Institute of Directors.

The report claims that shale gas, also known as fracking, is the only way to offset the effects of the increasing reliance on imports.

Without the development of new domestic gas resources, Britain's import costs for natural gas could rise from £5.2bn today to more than £6.7bn by 2015.

This will happen as North Sea supplies dwindle and Norway struggles to fill the gap. Britain was a net exporter of gas until 2004.

The IoD said: "Shale gas development can counter falling North Sea production, halting the increase in gas imports. It can also help to reduce price rises for consumers."

But shale gas production is a controversial technology requiring the use of large amounts of water and chemicals.

Bulgaria and France have both banned shale gas exploration, and in Britain it has yet to receive full government approval.

The IoD report said the environmental issues associated with shale gas exploration "are not to be taken lightly", but that "good practice can significantly reduce many of these risks".

It added: "Carried out properly and under strict regulation, hydraulic fracturing is safe."

The British Geological Survey estimates Britain's onshore shale reserves at 5.3 trillion cubic feet (150 billion cubic metres), which would be enough to meet Britain's gas consumption for one and a half years.

In the United States, shale gas production has been a huge success and has resulted in a sharp rise in natural gas production, leading to a collapse in domestic prices and the possibility of the US exporting liquefied natural gas by 2015.

However, the IoD said that the development of a shale gas industry in Britain would not be on a scale comparable with North America and that Britain would still face several energy problems.

The report said: "Shale gas development does not magically solve all the UK's energy issues.

"A mix of power sources is vital, and domestic shale gas is unlikely to account for a majority of the UK's electricity generation, or even of its gas usage. But it could and should play an important role."