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Tom Bawden: Good news for business - but what about the environment?

The potential environmental repercussions of "fracking" for shale gas by blasting apart rock formations deep underground are clearly substantial and have yet to be satisfactorily addressed by MPs and the companies involved.

However, with household utility bills soaring, North Sea gas reserves dwindling by the day, rising global demand and concerns about energy security, the environmental case needs to be balanced against the backdrop of a struggling, hydrocarbon-hungry economy.

The business case for shale gas gathered considerable momentum yesterday as the company at the forefront gave its first estimate for the volumes that could be contained in the rocks of Britain's shale gas heartland of Lancashire.

And the estimate by Cuadrilla Resources dwarfed analysts theoretical expectations.

Omar Rahim, editor of the Energy Trader Daily, the data provider, said: "This is a game-changer that puts shale gas at the front of the energy agenda.

"This could considerably reduce the cost of gas in the UK, although probably not for about a decade because it takes a while to set up production."

Analysts estimate that it will be commercially viable to extract about a fifth of the 200 trillion cubic feet of the gas Cuadrilla estimates to be in the Bowland Shale rocks. This is nearly 10 times the potential reserves the British Geological Survey estimated for the whole of the UK and is enough to satisfy UK gas demand for 11 years, at 2009 levels.

Fracking has been made possible by the development of new technology in the US, where shale gas has revolutionised the energy industry. US households are paying 21 per cent less for their gas than they were in 2006, while in the UK gas bills have risen by more than 14 per cent in the past three months.