A pretty tiny oil company made an amazing announcement on Thursday morning: UK Oil and Gas Investments (UKOG) reckons it has found 100 billion barrels more oil in the Weald Basin during exploration at a well just north of Gatwick airport.
But if you're expecting an oil boom just outside of London you should probably dial down your expectations a little bit.
For starters, the comparison to geologically similar US oil fields that UKOG is using suggests that you could only get between 3% and 15% of the oil in place out of the ground — though that would still be a colossal boom for the company, 100 billion barrels it is not.
But it's clear there are some other problems with the estimate. The company used the Williston Basin in North America as an example of an area with similar earth. It might be an excellent comparison on that basis, but there's a small problem.
This is what it looks like around the Little Knife oilfield in North Dakota. For an idea of the scale we're talking about here, Dickinson (on the map, population 17,787) is 50 miles away:
This map of the Horse Hill site is done on the same scale. It's closer to St. Paul's Cathedral in the centre of London that Little Knife is to Dickinson. Tens of millions of people live in the space pictured.
Can you see the issue?
If the Weald Basin sounds familiar, that's because it made the news in the past couple of years. Balcombe, the centre of a series of furious demonstrations against fracking plans, was also situated there.
This area is not sparsely populated and it doesn't look like the Dakota plains — it's pretty much what people think of when you say "England's green and pleasant land."
Any significant drilling project would get massive opposition from both the environmentalist left, with activists ready to swarm on the area and camp there semi permanently, and the conservationist NIMBYs who actually live there. That's a pretty powerful political coalition, one that oil exploration firm Cuadrilla wasn't able to surmount. It suspended plans to frack in the area last year, and though it won a recent court case for more exploration, it faced a protracted legal battle just to get seven days of drilling approved.
What's more, there's a rich history of people overestimating how much oil or gas is actually beneath the ground. In Monterey, California, it was widely believed that there were enormous shale reserves which could create up to three million (!) jobs. The Energy Information Administration cut its estimates of the reserves by 96% last May.
So if they could actually get more than a tiny fraction of the oil out (which they may not be able to), and the measurements are accurate (which they might not be) and they can surmount the local and environmentalist opposition (which they probably can't) then they'll have a real oil boom on their hands. It's up to you how likely that seems.
Horse Hill could still be a boom for UKOG, but the vast majority of those 100 billion barrels, if they're there, are almost certain to stay in the ground.
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