The cost of shale gas extraction in Europe is likely to be two to three times that of the US, according to an analysis by Bloomberg New Energy Finance published yesterday.

It estimated UK shale gas will cost between $7.10 and $12.20/MMBtu to extract, compared to $4.54 to $4.83/MMBtu in the US. The UK figures are similar to the range of market prices for natural gas in 2012, the analysis said, meaning shale gas developers could struggle to compete.

This follows on from a warning by Ofgem chief executive Alistair Buchanan on Tuesday that the UK was heading for an energy supply crisis that would put consumers at the mercy of fluctuations in global gas prices.

Guy Turner, head of economics and commodity research at Bloomberg New Energy Finance, said: “Shale gas might seem to offer a new dawn of low energy prices for the UK. Our analysis suggests such hopes should be treated as wishful thinking.

“The UK imports half of its natural gas, a proportion set to grow. Shale gas may help replace some of our declining conventional production, but it is unlikely to arrive quickly enough in sufficient volume to drive UK prices below international levels.”