great stuff, Dung - I hope that doesn't come across as too Drakeish

What is the take-home message? Prices are low because of a glut and companies are investing to use the gas and take advantage of this effective subsidy. But gas companies are losing money (subsidising users). Export facilities are to be built that will cause the domestic price to rise towards its medium term average ($6 ish) - gas co.s will celebrate and those investing on the basis of the current subsidy will presumably be sad.

What is the lesson for us the UK? Import and export facilities already exist, so the potential for a glut and hence lower prices seems limited. It might improve our balance of payments and push up the pound, but that seems all.

Confused...

I can see the potential benefit for the UK, but if there is to be a bonanza, I think the 30% royalty gives away too much. We should be taking the 70% and giving the 30% to the contractor! Bonanza or not, to be honest I don't want it in my backyard. If it comes to my neighbourhood, I'll help man the barricades.

But for the US I still don't know whether they should be happy that exports will allow their gas companies to be more profitable or sad that the era of cheap gas will be over as soon as it has begun. And sad for those companies apparently piling in to use cheap gas who will be disappointed - do they not see that exporting the stuff will kill their golden goose? If not are they not being rather blind? If they do see that, why would they go ahead with their investments? As I said, I'm confused.

I bought my house away from busy traffic and industrial activity because I considered it a good place to raise my family. Why should I now accept a change in land use around my house that will alter its value and potentially put my family at risk?

Chandra

Fifty years ago, as a BP university apprentice, I worked for six weeks as a labourer on a directional oil well being drilled by BP on the outskirts of Gainsborough, Lincs. To our great delight, we struck oil. I recently revisited Gainsborough courtesy Google Maps. The site of the well is now surrounded by housing and there appears to be a nodding donkey quietly adding to our prosperity. What is not to like?

Bishop Hill, what evidence do you base that upon? Where has there been shale exploration in the UK to give you that confidence? The US is not the same as the UK, but I've read of lenders refusing to lend on properties near shale developments. Are these reports untrue?

Say you were going to buy my house on its quiet country lane. You then discover that there would soon be gas exploration and fracking down the lane. Would you,

a) pull out?
b) drop the price offered?
c) raise the price offered?
d) go ahead unchanged?

If you select (c) you are a strange person. Unlike in the US, there is no upside from such a development, only risk.

Bishop Hill, you are talking about US where the landowner benefits from the gas extracted. Why do you expect the same to be true in the UK where this is not true? You didn't answer my multiple-choice quiz. It is an easy one, so please answer :-)

Is it really only a few weeks? I understand there are normally many wells drilled in different directions from the same pad. If the thing about exceptional depth is true too, I expect there would be many more wells from the same pad all to differing depths. Are they all likely to be done in only a "few weeks"?

Dung I visit quit often. I don't normally post though. Like I said, I'm in favour of gas, just not on my doorstep.

Bishop Hill, "shale has brought about economy-wide increases in house prices" sounds like a statement from an economist who mistakes correlation (things moving in step) for causation (one thing causing another). Even if your assumption were true (that shale gas extraction is the cause of both renewed growth and rising house prices), it doesn't take a fall in the absolute value of my house for me to be worse off. A relative price change (ie. houses unaffected by shale extraction increasing in value more quickly than mine) means I loose too.

As far as a frack taking a few hours, that is misleading and I wonder why you state it. The rigs and tanks and what-not all have to be brought to the site. The water has to be trucked in and the waste stored and trucked out. That is all a part of the process, as much as the actual frack. I saw a cartoon on one of your other threads gave a similarly minimal, clean, depiction of the process. One of the commenters who actually worked in the field berated the cartoonist for trying to make the process seem anything but the complicated, highly industrial and disruptive process it is. Maybe you don't read the comments to all threads but in that case you missed out. Fracking is transitory, for sure. So is have a tooth extracted and if I can possibly avoid it, I will.

Like I said, I'm not against fracking in principle, but if you want to convince people that it is desirable, you need to do better than these sort of half truths. They damage the cause, in my view, just like the US companies who maintain that it doesn't poison the water (which I believe should be true if it is done correctly) damage their cause immensely by buying the silence of those adversely affected. It is all very well complaining about lies and distortions of the "other side" but half truths and secrecy are just as bad.

Dung, the drillers should indeed cause as little disruption as possible. Sadly the industry has a history of failing to live up to this ideal because what is possible is governed by the cost. Safety and environmental protection cost money and will always be challenging for these companies.

I still don't know where people stand on my initial confusion. A glut caused a halving of prices and exports are now set to re-inflate the price. Should we celebrate the return to profit of the drillers or bemoan the higher prices that all those piling into the market to take advantage of the glut will face?

Someone said that a new supply of gas in the UK would lower prices, but prices depend upon both supply and demand. There is plenty of demand and we have export facilities. If I were a driller, the LAST thing I would want is for my activity to lower the price of gas.

One of the misleading 'facts' about fracking would be the 'not in my back garden' - as if a fracking site would be chosen so close to residential areas! The shale supply is over such a wide location that all that is reqired is ACCESS to a site - the site itself could be anywhere in 100's square kilometers. If you imagine for one moment that fracking companies would WANT to raise ire and the inevitable protests by fracking "in someones back garden" then you are indeed a vicitm of the propaganda.

I didn't suggest taking 70% of "their" profit but 70% of the value of gas pumped. The gas belongs to the people of the UK, not the drillers. They should be contractors operating on our behalf, not owners of the resource. The benefit to us lies in extracting our gas at the largest possible profit to the UK. Whether this means extracting it as fast as possible, flooding the market and dropping the international price, or extracting it more slowly so that the price is not altered and the value of the gas is higher I don't claim to know. But giving the lion's share of the value to the shareholders of the drillers, who may not be in the UK, does not feature in my idea of maximising the benefit to our country. I am in favour of shale extraction but for the benefit of the many, not the few.