It has been over a decade since the UK was a net oil exporter, according to figures released by the Office for National Statistics. In November, the balance on trade in oil was in deficit by £0.9bn.
The figures further confirm the long decline of North Sea oil production. North Sea oil can no longer be relied upon to ease the UK's balance of payments. The costs of exploration and extraction have steadily risen while a hostile tax environment has discouraged firms from renewing investment in the once prized resource.
As domestic oil production continues to decline, the UK will have to explore alternatives to take the place of oil. Shale gas could be Britain's answer to a squeezed energy supply and stubbornly high oil imports.
The British Geological Survey estimates the UK has enough shale gas to supply Britain's power needs for next 40 years. There could be as much as 1,300 trillion cubic feet of shale gas lying beneath Lancashire's Bowland basin. UK shale explorer Cuadrilla forecasts that the basin could have a value of up to £136bn while, tax revenue could reach up to £1bn.
The government has attempted to spur investment in shale gas by slashing taxes on company profits from 62 per cent to 30 per cent. Waiting times for exploration permits will also be axed from 13 weeks to one or two by February. The measures have been warmly welcomed by business groups.
Corin Taylor, formerly senior economic advisor at the Institute of Directors, said last year:
Even if only 10 per cent of the gas in the ground could be recovered, it would still provide more than 40 yearsí worth of Britainís total gas consumption.
This is a very welcome step that will speed up development.
176 licenses were issued in 2013 to explore and drill for gas