Why a bet on shale gas will transform Britain Forget the scare stories - we can cut carbon emissions and boost our economic fortunes
By Francis Egan
7:35PM BST 03 Jul 2013
The Government last week published the British Geological Survey’s estimate
of 1,300 trillion cu ft of natural gas stored within the shale rock deep
beneath northern England. It is becoming clearer that the potential to
transform our energy provision lies underneath our feet.
If only 10 per cent of northern England’s shale resources can be extracted,
that would meet the UK’s current gas demand for more than 40 years. And at
today’s prices, it would have a market value of almost £1 trillion,
without considering the gas and oil deposits elsewhere in the country.
Some people argue we should generate more electricity using renewables
instead of falling back on fossil fuels. After all, the Government has
confirmed that renewables’ share of generation (around 9.6 per cent) will
continue
to grow. Decarbonising electricity generation is a key part of our energy
policy.
But electricity generation accounts for only about a third of UK gas
consumption. The remaining two thirds is taken up in heating our homes, firing
our cookers and fuelling industry. So even if all our electricity demand
could be generated without gas we would, without domestic shale gas,
increasingly rely on expensive and potentially insecure imported gas. Clearly,
gas
and renewables will both form part of our energy mix for a long time to come.
There are other compelling reasons for us to be exploring for and
developing shale gas. First, as a nation, we need sustained economic growth,
the key
to which is job creation. Britain’s recent performance in this regard,
particularly for young people, has been very poor. However, in a recent
report, the Institute of Directors predicts that shale gas development could
create 74,000 new jobs, spanning geology, drilling, accounting, IT, and
construction.
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Second, communities will benefit financially. The prospect of them
receiving £100,000 for every exploration well site that is hydraulically
fractured,
in addition to one per cent of revenues from future shale gas production,
is fantastic news. More than £1 billion over a 20 to 30-year production
period could be returned to Lancastrian communities in the Bowland Basin
licence area alone.
The third point is that shale gas will make a major contribution to the
Exchequer. In real terms, Deloitte estimates tax revenues from North Sea
production will decline from £11.2 billion in 2011-12 to £3.7 billion in
2017-18. Onshore gas production could fill that gap, providing money to pay for
health care, education, defence and other public services.
Predictions of production sites proliferating across densely populated
areas are wide of the mark. Within 20 to 30 years, a successful Lancashire
development could have up to 100 production sites in commercial operation
across 1,200 square km. But put them together, these sites – each the size of
a
football pitch – would cover a total area of two sq km. After drilling and
hydraulic fracturing operations are finished, each site would only contain
a few low-rise processing facilities, together with valves and pipes inside
units the size of post boxes, with the site screened by trees.
Of course, not everyone shares our belief about the potential of shale gas,
but as long as the debate involves scientific data, that’s fine with us.
There’s no place for ill-founded assertions about industrialisation, major
earthquakes, contaminated drinking water or cancer, to name just some of the
outcomes we hear propagated as “inevitable”. Britain has the engineering,
health, safety and environmental expertise, together with a robust
regulatory framework, to develop shale resources safely. To suggest that as a
country we are incapable of doing this and must rely on the Middle East,
Russia, North Africa or elsewhere to supply our gas is ill-judged.
We should also be wary of an artificial split between shale gas and
renewables. Together, they represent the best opportunity we have to bring down
the UK’s carbon emissions while maintaining competitiveness. There is little
evidence from the US that shale gas undermines the case for investment in
renewables, as long as the government and the electorate want them.
We need to demolish unfounded scare stories and tackle red tape so as to
generate long-lasting benefits for the UK through the safe and responsible
extraction of shale gas. Let’s start by stripping away guesswork, so we can
understand exactly how much gas stored in shale rocks thousands of feet
underground can be recovered.
Right now, we are on the verge of a historic opportunity to transform the
UK’s energy supplies and economic fortunes for decades to come. Success
means a stronger Britain, with better opportunities for our children, and
lasting economic and environmental benefits for all.
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