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Report highlights southern England 8217 s oil reserves

Article By: ,  Financial Analyst
May 23, 2014 11:15 AM

Several billion barrels of oil could be extracted from underneath southern England, according to a new report.

The study by the British Geological Survey (BGS) says that areas such as Sussex, Hampshire, Surrey and Kent may be ripe for widespread fracking, which is the method used to extract the oil from out of the ground.

Fracking has been a controversial topic in recent years, although it has been widely adopted in the US, where it has helped to bring down the cost of gas for consumers. But attempts to test fracking sites in the UK have been met with strong opposition on a local level.

Tory peer Lord Howell of Guildford previously stated that the north of England could be ideal for fracking due to the fact it is "desolate", although he later apologised for the comments and admitted pursuing fracking could result in lost votes for the Conservatives.

Fracking impact on energy bills

Green Party MP Caroline Lucas stated that fracking would not bring down energy bills in the UK as it did in the US. Speaking to BBC Two's Newsnight, she said: "Even the boss of (fracking firm) Cuadrilla has said fracking in Britain wouldn't reduce energy prices.

"Lord Stern has called it baseless economics and that's because here in the UK if we frack in the UK we don't actually use that gas or oil in the UK, it gets sold on European markets at the going price."

Oil demand is expected to continue to rise in the coming months, with a recent report from Opec (Organization of the Petroleum Exporting Countries) noting how demand is likely to be in excess of previous estimations for 2014.

The body now claims that utilisation of oil products is going to hit 18.89 million barrels a day this year and 18.99 million barrels a day in 2015. "The global economy will see a gradual recovery in 2014, led by growth acceleration," the report stated.

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