Future Energy – Thoughts on conditions for environmentally sound UK shale gas development

Two recently published papers (McGlade & Ekins (2015) and McGlade et al. (2014)) examine possible futures for fossil fuels, with a particular focus on the ‘bridging’ role that natural gas may be able to play during a transition to a global low-carbon energy system. Drawing on the findings of these papers, we have commented that the UK may be able to develop some of its potential shale gas resources within the context of a global effort to keep average global warming below 2 ^oC with a reasonable likelihood. This note aims to discuss the conditions that we consider are necessary for this to be the case.

Before doing so, it is important to bear in mind that none of our work to date has focussed explicitly on modelling natural gas consumption or production in the future UK energy system. This is a subject of our current ongoing modelling work and we will be able to comment on UK natural gas and shale gas in much more detail when this is completed.

The first condition is that there must be both technically and economically recoverable volumes in the UK at full life-cycle costs that are below future gas prices[1]. At present there are no UK shale gas reserves[2], and next-to-no information or data on volumes that could be considered to be recoverable resources. Whether any will be is unknown, despite frequent claims to the contrary, and this is self-evidently necessary for there to be any development of UK shale gas.

Second, because gas produces lower carbon emissions than coal, gas consumption can only increase consistently with stated commitments to limit average global warming to 2^oC if there is rapid and dramatic reduction in coal consumption. Within our modelled global 2^oC scenarios, gas acts as a transition fuel predominantly only in those regions whose energy systems are currently heavily reliant on coal. Since the UK began its transition period from coal to gas some time ago, the potential for replacing coal consumption is more limited.

Third, gas can only be a short-term complement to the much larger increase in true low-carbon energy sources that must also occur to reduce coal consumption and for the low-carbon transition actually to be achieved.

Fourth, the bridge formed by natural gas to a low-carbon energy system, and by extension the optimal timeframe for the development of shale gas to help reduce GHG emissions, is strictly time- limited. Nevertheless, it is important to acknowledge that there will probably continue to be some gas consumption in the UK energy system, at least through to 2050, even under a deep decarbonisation pathway. Shale gas production could therefore occur to replace declining North Sea production and displace imports that would otherwise be necessary.

Fifth, the development of some shale gas resources is only helpful if there is a globally-binding agreement on CO₂ emissions reduction. In the absence of such an agreement additional natural gas is not helpful for reducing emissions. McJeon et al. (2014) demonstrated on a global level that gas has the potential to displace zero-carbon sources of energy (such as renewables and nuclear) as much as coal, leading to little change in overall emissions. Under such circumstances the development of shale gas could not in any way be viewed as a positive emissions-reduction mechanism.

Our sixth condition is that both individual and cumulative local environmental impacts, including those from waste disposal, toxicity, noise and water pollution, groundwater contamination, induced seismicity, water use in water-deficient areas, and flaring, are appropriately regulated, controlled or avoided.

Seventh, the level of fugitive emissions that occurs during production needs to be determined and managed. The literature on this issue is not yet at a mature enough stage to have any confidence on what a reasonable range for fugitive emissions might be. If they are non-negligible the usefulness of shale gas as a lower-carbon bridge fuel diminishes rapidly.

Eighth, carbon capture and storage (CCS) is key to the development of new gas resources, shale or otherwise, as a lower-carbon bridge away from coal. On a global level, our modelling suggests that in a 2^oC scenario in which CCS is not available, gas consumption peaks much earlier and the role that gas can play as a transition fuel is substantially reduced. If CCS does not become available commercially soon, it is unlikely that there will be much scope within available carbon budgets for significant UK and European gas consumption beyond 2050. This calls into question the wisdom of developing a whole new UK shale gas industry for such a limited period of operation.

Ninth, if new resources are to be developed in the UK, then fewer fossil fuel reserves need to be developed as a result elsewhere. Policy makers and advocates for UK shale gas development will need to identify which additional reserves are going to stay in the ground if commitments to limit global warming are to be met, bearing in mind that all countries and regions already hold significant levels of ‘unburnable’ reserves, and will likely seek compensation for any such sacrifices.

Tenth, development of shale gas cannot occur in an unrestricted manner. For example, our Nature study suggests that 80% of European unconventional gas resources should still be classified as unburnable under a cost-optimal 2^oC scenario.

Given the current incomplete state of knowledge about shale gas and its potential role in a low-carbon transition, we suggest that policy makers should take as their basis for energy policy that there will be no shale gas produced domestically. Furthermore, while we are not against shale gas exploration in principle, we believe that it is incumbent upon the shale gas industry and its supporters, and the government, to demonstrate that the above conditions are met, as most if not all of them are not at present. Only then should shale gas production be permitted to proceed in the event that it is proved to be economically viable, in the knowledge that it is consistent with a decarbonised UK energy system and environmental protection more generally.

[1] It may be borne in mind that there is no guarantee that gas prices in the UK will be anywhere near as high as was perhaps thought one year ago. This will obviously have major implications for any potential development of UK shale gas.

[2] We define reserves as those resource that are economically viable to produce with current technologies, and which are likely to be produced within a few decades.

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References

McGlade and Ekins, The geographical distribution of fossil fuels unused when limiting global warming to 2 ^oC. Nature 517, 187–190 (2015)

McGlade et al., A Bridge to a Low-Carbon Future? Modelling the Long-Term Global Potential of Natural Gas. UK Energy Research Centre, London, UK (2014)

McJeon et al., Limited impact on decadal-scale climate change from increased use of natural gas. Nature 514, 482–485 (2014)

 

Prof Paul Ekins is Professor of Resources and Environmental Policy and Director of the UCL Institute for Sustainable Resources

Dr Christophe McGlade is a Research Associate at the UCL Institute for Sustainable Resources