When the British Geological Survey doubled estimates for the shale gas reserves in the Bowland Basin, it raised expectations of a US-style shale gas revolution in the UK.

The region – which stretches from Cheshire to Yorkshire – is one of the UK’s most promising onshore shale gas prospects and could hold between 822 and 2,281 trillion cubic feet.

“The shale gas potential is enormous here, even if we just get 1 per cent of the in-place estimates,” says John McGoldrick, chief executive of unconventional gas company Dart Energy.

But just because gas is recoverable, it doesn’t mean it makes economic sense to do so. Explorers must drill wells to discover natural gas flow rates. Cuadrilla is the only company to have fracked in the UK and no wells have been fracked since an 18-month moratorium was lifted more than a year ago. The UK’s shale gas potential remains largely unknown.

Exploration is expensive and it is easy to spend more on drilling a well than the value of gas that comes out of the ground. Drilling costs are significantly higher in the UK than the US. The nascent supply chain and long licensing process are largely to blame.

“It’s a lot slower than in the US,” says Francis Egan, Cuadrilla chief executive. “We have to apply for eight or nine permits for each exploration well.”

Geology is another factor. While UK shale gas reserves appear to be thicker than those in the US, the UK’s geological make-up is likely to prove more challenging. “The UK is highly faulted by comparison to a typical North American shale area like Marcellus or Eagle Ford,” says Joe Cartwright, Shell Professor of Earth Sciences at Oxford university. “Our areas are intrinsically more complex.”

As costs are greater in the UK, gas must command a higher price to make shale gas production viable. UK consumer gas prices are currently double US rates. “Our costs will be higher, but will they be twice as much as in the US? I don’t think so – certainly not over time,” says Mr McGoldrick.

“At the minute, the economic equation is negative,” says Alex Grant at investment bank Jefferies. “It’s costing [UK explorers] well over $10m to drill a well – compared to say $4m in the US – and the gas they can get out is worth a lot less than that. If this is the best they can do then the equation doesn’t work on a per well basis and it doesn’t matter that they have huge amounts of gas.”