After a significant discovery of up to 100,000 billion barrels of oil in the south of England, does this bring good news for the plastics industry, or will it be a while before we reap the rewards?
The discovery back in 2014, after exploration firm UK Oil & Gas Investments (UKOG) drilled a well near to Gatwick airport suggested the area could hold 158 million barrels of oil per square mile. (In comparison, over a 40 year period, the North Sea has produced only 45 billion barrels).
Stephen Sanderson, UKOG’s chief executive said: “We think we’ve found a very significant discovery here, probably the largest onshore in the UK in the last 30 years, and we think it has national significance.”
UKOG describes the discovery as a “world class potential resource” and says that the well has the “potential for significant daily oil production”.
Estimates suggest that anywhere between 3% to 15% of the oil could be recovered – so could this transform the UK plastics industry into one of the world’s big hitters?
Good for the economy
Well, probably not. Whilst 100 billion sounds a huge amount, in comparison to Saudi Arabia which produces 11.7m barrels of oil per day, and the US which produces 11.1m barrels per day, the UK find is quite tiny.
Tiny, but not insignificant. According to reports, 1000s of jobs will be created by the find, and UKOG’s shares have more than quadrupled since the announcement, so it’s already having a positive impact on the wider UK economy.
As for the plastics industry, we’ll have to just wait and see. The oil has yet to be recovered and tested, so we’re a long way off using it just yet. Only 5% of the world’s oil production is used to make plastic, so if there is an impact to the industry itself, it would only be small.
There will almost certainly be a raft of controversy surrounding the find when it comes to extracting it, due to the possible use of fracking – which involves pumping high pressured water, sand and chemicals into rocks in order to liberate the oil trapped within.
Some experts have claimed that to get commercial quantities of oil, fracking will have to take place – something that is sure to stir up quite a bit of unrest.
It wouldn’t be the first time that the controversial practise has been opposed – in 2013, Cuadrilla drilled in Balcombe, West Sussex and received a barrage of abuse and opposition nationwide.
It remains to be seen whether the oil found will be viable for the plastics industry, but surely the discovery can only have a positive influence on the UK as a whole. With the constant pressure for companies to reduce operating costs and become more efficient, if the oil discovery can be utilised for the UK plastic industry, it will surely mean big business.
For more information on the oil discovery, please click here>>