It\’s lovely to see someone actually getting this distinction correct:
However, as Ed Davey, the Energy Minister, flagged, this will not reflect the reserve – the amount of gas which can in practice be produced economically from that resource. “Until more exploration work has been done, a significant number of wells fracked and production patterns established over time, it will not be possible to make any meaningful estimate of likely economically recoverable resources of shale gas in the United Kingdom,” he said.
\”Reserve\” does not mean how much there is. It\’s how much we can extract and make a profit doing so.
But, here\’s the corollary. DECC and all that are forecasting that gas prices are going to rise over the coming decades. And given that reserves are an economic concept, bounded by that profitability, this means that reserves of shale are going to rise even as we use it. For as the price rises more of it will become profitable to extract.
This is entirely separate from technological development (extraction from shale is less than two decades old: we\’d not expect everyone to have explored all of the details of its efficiency as yet).
If DECC is right and gas prices are going to increase then reserves are too.