Shale gas can also help renewable development, as every megawatt of intermittent
renewable capacity needs back-up, and will do until more effective storage systems
are found. Gas-fired generation is the lowest carbon option and is also the most
flexible, being easily switched on and off as the sun and wind vary. So, far from
distracting energy firms from a focus on renewables – as some environmental groups
claim – gas should be seen as an essential part of any system that prioritises wind
and solar power, for the time being at least.
Add to this the fact that about a quarter of UK energy consumption is in the form
of gas for heating homes and other buildings, which cannot quickly or easily be
replaced by renewables, and the importance of shale gas to the economy and society
becomes even clearer. The Department for Energy and Climate Change (DECC) states
that shale gas will be used as a "bridge in our transition to a green future in
conjunction with carbon capture and storage (CCS), nuclear and renewables." Efficient
and easily constructed gas power stations, "provide flexibility to help balance
out increasing amounts of relatively inflexible and intermittent low carbon capacity".
There are also substantial advantages to the UK in reducing energy import costs
and improving energy security, against a background of declining North Sea production.
Every cubic foot of gas recovered domestically means one less that needs to be imported,
and money that would have gone to Qatar or Russia instead goes to fund British jobs
and economic activity.
Francis Egan, CEO of pioneering UK shale developer, Cuadrilla, recently estimated
that shale gas could supply up to a quarter of UK demand, but that this would take
ten years or more. Whatever the actual level of production, it will certainly put
downward pressure on prices – potentially helping those in fuel poverty, while also
providing a further boost to the economy from cheaper energy. The anticipated price
falls are, however, likely to be limited as the gas must be shared with European
buyers, unless our neighbours on the continent also decide to develop the resource.
At a local level economic benefits are even more pronounced. Councils are able to
keep all the business rates from shale gas operations, compared to half normally.
Alongside this, operators have offered £100,000 plus 1% of production revenues,
which The UK Onshore Operators Group (UKOOG) estimates could generate more than
£1.1bn over a 25 year period for local communities, or £5-10 million per site.
However, the Local Government Association wants more, stating that given the impact
on local communities, "returns should be more in line with payments across the rest
of the world and be set at 10 per cent." Industry group, Energy UK, has suggested
another option might be for developers to set up joint ventures with Councils and
As well as providing additional income, local communities should benefit from job
opportunities. A recent government report concluded that 32,000 new jobs could be
quickly generated. Others are even more optimistic – the Institute of Directors
estimates up to 70,000 jobs could be created, while in April a UKOOG report predicted
shale gas development could provide over 64,000 jobs and investment of £33 billion
over an 18 year timeframe. Cuadrilla has estimated that 15% of jobs from their Lancashire
operations were contracted locally, a figure that is expected to rise as local supply
chains are established.
While opposition to shale gas extraction has been vocal, national opinion polls
are generally positive, and – perhaps with the incentives in mind - local communities
even more so. The Green party, which is the only one to oppose hydraulic fracturing,
came last with 4% of votes cast in a recent council by-election in Fylde, where
Cuadrilla is active.
Echoes of the great game
Current tensions in Ukraine and Europe's heavy reliance on Russian gas has pushed
the issue of energy security back up the agenda. State-owned Gazprom has criticised
attempts to develop shale reserves in Europe, claiming fracking has "significant
environmental risks" including water contamination. But Gazprom's opposition to
shale gas is not motivated by environmental concern.
Vast sums flow from the UK and other western gas consumers to the Middle East, North
Africa, Norway and Russia, of which Gazprom is the biggest beneficiary of all. Shale
would reduce our reliance on and consequent support for these suppliers, presenting
them with a significant risk.
Shale is such a concern to Gazprom that it is even attempting to boost opposition
in Europe through environmental NGOs. According to NATO's Anders Fogh Rasmussen,
Russia is "engaged actively with… environmental organisations working against shale
gas, to maintain European dependence on imported Russian gas." This gives the development
of shale gas a strategic imperative, not just here, but across Europe.
Earthquakes in perspective
The biggest cause of fracking-related earthquakes in the US has actually been the
reinjection of waste water into disposal bores, rather than the actual fracking
itself. This is a practise not permitted at all in the UK. In addition, these earth
tremors need to be put into context. Similar effects have been produced from the
filling of reservoirs for hydropower, and coalmines have long been a cause of earth
Since early drilling triggered tremors in Lancashire, a review by the Royal Academy
of Engineering and the Royal Society has concluded that risks "can be managed effectively
in the UK as long as operational best practices are implemented and enforced". With
strict seismic monitoring and more attention to geological detail including faults,
DECC says the risk of future earthquakes will be lower.
Other concerns include water contamination and methane leakage. Water recycling
will be compulsory in the UK, and sites will be tightly contained at the surface.
New chemicals and treatment methods are already being developed to reduce clean
water requirements. During extraction there can be leakage of methane, which is
a powerful greenhouse gas. In the UK tight monitoring should pick up any emissions,
and there is considerable focus on improving well casing and drilling procedures
to address the problem.
The Institution of Mechanical Engineers and leading operators emphasised recently
that they believe shale gas exploitation and production can be done safely in the
UK. And in early May this was backed up by a House of Lords report that urged the
Government to "go all out for shale" - but with the highest standards of regulation,
including independent well inspectors.