Well, those are entirely different points. At a particular point we could meet a larger amount of supply, but what I am talking about is the overall question of the amount of supply over a period of time that would be possible to underwrite as a result of that sort of level of shale gas production—two different points.
The additional point that needs to be borne in mind about shale gas wells is that they do not last very long. Research from the US demonstrates that the average life of a shale gas well is about seven years or so. That is because shale gas wells produce a lot of gas to start with, but they deplete very rapidly. So, after about seven
years they are producing virtually negligible amounts, even—as has happened in a number of instances—on the basis of refracking. Refracking of a well produces a little increase, but the well still dries over a fairly short period. Therefore, to maintain that sort of level of production over a longer period, one would need to redrill a number of those wells. That is the sort of scenario that we would set for ourselves if we were to introduce a level of shale gas production that would support the sort of intervention in the gas market that I have mentioned.
My second concern is this: would shale gas production actually reduce prices for everybody, if we went for it to that extent? The clear answer is no. The intervention of the shale gas itself would not reduce prices because of the way that gas is traded on the international markets, particularly in this country. There are three international markets for gas trading. Gas is not particularly transportable, except through vessels such as liquefied natural gas carriers, which make a marginal difference in terms of supply; gas is largely transported by pipelines. Gas is traded on the European market, the far east market and the north American market. The north American market has seen substantial price decreases because of the concentration of shale gas within that one particular market. We would need to have a similar amount of shale gas produced throughout Europe in order for the European traded gas market to come down significantly in price compared with what it is currently, notwithstanding LNG imports coming into the European market overall. So shale gas might make a marginal difference over a period of time, but probably not—for the reasons I have given—unless there were fundamental changes in gas trading.