By Paul Ekins, on 7 August 2013
So it seems that an important element of the UK’s energy policy will be fought out, quite unnecessarily, in the British countryside around places like Balcombe. It is unnecessary because there is absolutely no need to bulldoze fracking through the planning system with little or no consultation with local communities – unless, that is, you are a shale gas believer and determined to see and benefit from the fruits of fracking before the next election, as would appear to be the case with the Chancellor, George Osborne.
So much Government political capital has now been invested in shale gas exploitation that it is easy to forget the very considerable uncertainties that are still associated with it in the UK.
First, there is the economics. It is still very uncertain indeed that UK shale gas will be extractable at a cost that is competitive with the current UK price of gas, let alone way below it, and yet an unfounded certainty that this will be the case seems to be the main reason that the Chancellor is promoting it with such unseemly haste. Simply saying that we can do it, because the US has, is to show the most woeful ignorance of the differences between the UK and the US, particularly in geology.
Much US shale gas has come up with associated liquids, effectively as a by-product of these higher value products, which covers the cost of production. The shale gas is effectively ‘free’, and if there is no pipeline nearby it is simply flared. It is the production of large quantities of this ‘wet’ gas that has caused the US gas price to fall, to levels that make gas there uneconomic to produce unless it accompanies liquids.
The UK’s shale gas is thought to be predominantly ‘dry’ gas. It would need to cover its costs itself. It is still very uncertain whether it could do so, especially as the costs of wells are likely to be higher in the UK, and new local infrastructure would be needed to get the gas to market.
Second, there are the emissions from shale gas. It has been calculated that only about 4% of shale gas would need to escape to the atmosphere as ‘fugitive’ emissions for the greenhouse gas emissions from the production and subsequent combustion of such gas to be as great as emissions from coal. It seems, however, that mere concerns about climate change, despite the evidence everywhere of its alarming acceleration, and the acceptance of the vast majority of climate scientists that greenhouse gas emissions are a major cause, cannot stand in the way of a putative boost to the UK economy before 2015.
Without this self-imposed electoral deadline it would have been possible to explore the implications of UK shale gas production in a measured and responsible way: properly consulting and compensating local communities; monitoring emissions; and evaluating the cost-benefit balance on the basis of evidence. A further advantage of this approach is that potential investors in renewables would not have been spooked by the schizophrenic situation of HM Treasury clearly advocating one kind of energy future, while the Department of Energy and Climate Change advocates another.
The ultimate irony for the Chancellor would be if, having rushed into shale gas in order to win the next election, the Tory shores were to vote instead for their countryside and choose a party that was not associated with its despoliation.
Prof Paul Ekins is Director of the UCL ISR and Professor of Resources and Environmental Policy. He is also a co-director at UKERC.
This post first appeared on the UKERC blog, The Current Event