* Construction could start tomorrow if emergency -CEO
* All constraints to shale would have to be removed
* Would take 4 years to get to 'appreciable' output
By Nina Chestney
LONDON, April 2 Shale gas production in Britain
could begin within four years if the current crisis in Ukraine
escalates to such an extent that a national state of emergency
is declared, the chief executive of Cuadrilla Resources said.
Britain is in the early stages of exploring for shale gas to
counter its growing dependence on imports, and geologists have
estimated it could have shale resources equivalent to several
hundred years of demand.
Cuadrilla is the only company in Britain so far to have used
hydraulic fracturing, or fracking, in test wells in Lancashire.
It is two to three years away from establishing whether its
British shale gas operations are commercially viable, Chief
Executive Francis Egan said at an event at think-tank Chatham
House on Tuesday evening.
If the Ukraine crisis worsens dramatically and Britain
declares a state of national emergency and removes all
constraints, "it would take two, three or four years to get up
to appreciable production rates," he added.
In an emergency situation, Cuadrilla could start
constructing a drilling site immediately and start drilling
after two months. Drilling a well would take around four months,
and three to four wells would be needed to demonstrate the
commercial value of shale gas.
In normal circumstances, it will take two to three years
just to find out whether shale is commercially viable, because
it has not yet been established at what rate the wells would
Energy consultancy Poyry has estimated it would take up to
eight years for a developer to start commercial production in
Britain after receiving a licence.
As Russia's occupation of the Crimea region has led to the
worst East-West crisis since the Cold War, there is increasing
urgency for European countries to find alternatives to Russian
gas supplies, which arrive via Ukraine.
Last week British Prime Minister David Cameron called the
current crisis in Crimea a "wake-up call" and said shale gas was
a good opportunity for Europe to move away from Russian gas.
Russia provides around a third of Europe's gas, with most of
that going to central and southeastern Europe rather than
Britain, but Britain will begin to import gas from Russia under
formal contract for the first time this year.
British domestic gas production from the North Sea basin is
declining, and it imports most of its gas from Norway or via
liquefied natural gas shipments.
North Sea gas production will fall to 19 billion cubic
metres (bcm) by 2030 from 108 bcm in 2000, Minister of State for
Energy Michael Fallon said at the Chatham House event.
"Without shale we are forecasting we will be importing 70
percent of our gas by 2025, which equates to a 10 billion pound
($16 billion) per year import bill," he added.
For shale gas production to begin within four years, Britain
would have to opt out of all applicable EU legislation and of
regulations by its local authorities.
Local opposition to fracking has been another obstacle.
Shale gas is ordinary natural gas trapped in dense rock
formations. In the fracking process, water, sand and chemicals
deep are injected into rock formations to release hydrocarbons.
Cuadrilla has been repeatedly targeted by protesters and
environmentalists concerned about groundwater contamination,
earthquakes and the expansion of fossil fuel use.
"There is no short circuit through this. It will take a lot
of cups of tea in parish councils until it becomes a 'so what?'
question," Egan said.
($1 = 0.6011 British Pounds)
(editing by Jane Baird)