Member Article

Shale oil could boost UK GDP by £50m

Shale oil production could boost UK GDP by up to £50bn in by 2035, a study by PwC suggests.

The study points to “significantly lower” oil prices than would otherwise have been the case, and an increase of around £500-£800 in GDP per capita.

Entitled ‘Shale Oil - the Next Energy Revolution,’ the report looks at the potential impact of shale oil production growth.

Findings suggest that shale oil production has the potential to spread gradually from the current US base and increasing the world’s total oil supply by 2035.

Richard Podd, director in PwC’s Newcastle office, said: “The UK government would lose some North Sea tax revenues if global oil prices were lower, but with North Sea resources in long term decline, shale oil and gas present an opportunity to create a new growth engine for UK plc as well as a new source of tax revenue.

“Shale oil has the potential to reshape the global economy, increasing energy security, independence and affordability in the long-term. However, these benefits need to be balanced with broader environmental objectives at both the local and global level, and consequent changes in policy and regulatory regimes will undoubtedly have knock-on effects on oil producers and consumers.

“The implications of the growth in shale oil will be felt along the value chain. Investment choices based on long- term predictions of a steady increase in real oil prices may need to be reassessed in the upstream, midstream, downstream and oilfield services sectors.”

The study also notes that should shale oil take off, significant geopolitical shifts could occur as energy independence for the likes of the US and China reduces the influence of OPEC.

This was posted in Bdaily's Members' News section by Tom Keighley .