How to play Britain’s shale gas revolution

It’s not all bad news. In last week’s edition of The Fleet Street Letter, David Stevenson outlined an exciting new investment trend.

It will come as no surprise of most of you to here that David is excited by the prospects for gas. Most of us here at MoneyWeek have written articles on the investment potential of natural gas - a plentiful fuel that’s cleaner than coal and cheaper than oil. We’ve also explained how new drilling techniques have opened up huge reserves of shale gas in America. But David is not just keen on natural gas. He is convinced that the shale gas revolution is about to come to the UK.

“Over the next decade, Britain could be facing a serious power generation shortfall”, says David. “As ever, expert opinions vary on how big this might be. But the government is now about to publish its Energy Bill. This will explain how officialdom will encourage earlier-than-planned investment to cope with a mounting electricity crisis in this country.”

Meanwhile the government is also encouraging energy utilities to build more gas-fired plants.

And with Britain’s North Sea gas reserves rapidly declining, David believes the government will turn to ‘fracking’ for shale gas to boost domestic supply.

“After all, there’s plenty of shale gas potential over here”, says David. “The most recent report by the British Geological Survey (BGS) estimated UK onshore shale gas reserves at 5.3 trillion cubic feet (tcf). At Britain’s current gas usage rate of 3.5 tcf a year, that would meet our needs for 1½ years.

“But the UK’s overall shale gas figures could turn out to be a whole lot higher. Cuadrilla Resources reckons the Bowland formation alone, which spans the Isle of Man to North Wales, South Cumbria and the East Midlands, could contain as much as 200 trillion cubic feet of shale gas.

“Indeed, Britain expects to issue a new BGS estimate of its shale gas resources in the Bowland formation before the end of 2012. And next year there will be a more comprehensive figure for the whole country.”

In other words, Britain’s shale gas sector could be about to take off in a big way. Of course spotting trends is all very well but the point of The Fleet Street Letter is to help people make money from them. David’s done just that and found an exciting British company that should do well if the UK turns to shale gas.

If I gave that tip away here for free neither David nor his subscribers would be too pleased. However, one thing I can let you see is his latest investment report. In it he explains how you can double the income you get from a share without spending a penny more.