Safe fracking will cut UK energy bills and pose no environmental threats, according to the British Prime Minister. Experts, however, claim otherwise
Last month, British Prime Minister David Cameron voiced his ardent support for shale gas production in the UK. Speaking at a public Q&A session in Lancashire, North England, Cameron claimed Britain would be “making a big mistake” if it failed to take advantage of the nation’s reserves of the unconventional gas.
Citing access to cheaper energy prices for UK households, businesses and industry, the Prime Minister also said the country was “missing out big-time at the moment” and compared the relatively poor performance of Europe’s shale gas sector to that of the US, which is currently booming.
“If you look what’s happening in America with the advent of shale gas and fracking, their energy costs in business and their gas prices are half the level of ours. We are seeing businesses that have previously gone-off to Mexico and elsewhere come back to the United States,” Cameron said.
“Nothing is going to happen in this country unless it’s environmentally safe. There is no question of having earthquakes and fire coming out of taps and all the rest of it. There will be very clear environmental procedures and certificates you will have to get before you can frack,” he asserted.
Cameron further publicised his views in an extended letter published by The Telegraph, where the Prime Minister reiterated the promise of widespread access to cheaper gas prices; paramount health, safety, and environmental standards; increased numbers of jobs; and royalties to local communities that could run into the hundreds of millions of dollars. In addition, the Prime Minister emphasised the enormity of Britain’s shale gas reserves, its potential impact on the nation’s economy, as well as the government’s commitment other low carbon alternatives.
“Where we can act to relieve the pressure, we must. It’s simple – gas and electric bills can go down when our homegrown energy supply goes up. We’re not turning our back on low carbon energy, but these sources aren’t enough. We need a mix. Latest estimates suggest that there’s about 1,300 trillion cubic feet (TCF) of shale gas lying underneath Britain at the moment – and that study only covers 11 counties. To put that in context, even if we extract just a tenth of that figure, that is still the equivalent of 51 years’ gas supply.”
“For centuries, Britain has led the way in technological endeavour: an industrial revolution ahead of its time, many of the most vital scientific discoveries known to mankind, and a spirit of enterprise and innovation that has served us well down the decades. Fracking is part of this tradition, so let’s seize it,” said the Prime Minister.
The view that domestic shale gas production will lower UK gas prices has, however, been met with widespread skepticism on the part of economists and opposition politicians. Of particular note, Lord Stern, Chair of Grantham Research Institute on Climate Change at the London School of Economics, said in an interview with The Independent, “I do think it’s a bit odd to say you know that it will bring the price of gas down. That doesn’t look like sound economics to me. It’s baseless economics.”
Gas is traded on the international market, which means that it will be sold to the highest bidder, whether inside or outside the UK. Because of this, any shale gas boom in the UK will have little impact on international prices. Furthermore, the US is an isolated market where gas producers do not have the option to export. Hence today’s oversupply in the US has suppressed the nation’s domestic gas prices and not those of other regions.
Lord Stern is equally as concerned over the environmental issues surrounding fracking, such as the amount of water required per frack, which currently stands at five million gallons. “There are major questions around fracking and those questions ought to be explored. We’ve not had a proper discussion on these serious issues,” he said. In a separate interview, Lord Stern also questioned the amount of shale gas housed underneath the UK, claiming the nation’s alleged 1,300 TCF of reserves to be “unproven” and “potentially inaccurate”.
The Prime Minister’s vision faces stiff opposition from the UK’s main opposition party – the Labour Party – as well as advisers representing the current Conservative-Liberal Democrat coalition government. Of note, Carol Flint, Labour’s shadow energy secretary, has been highly critical of Cameron’s shale gas pitch. “The way the government has framed the debate in terms of the potential and time in which it could be developed has been misleading… We’re talking decades away on this,” said Flint.
Industry analysts believe widespread production will begin by 2020 at the earliest, and subject to planning permission and public buy-in. “The government has tried to put across that somehow this is a done deal… This is something that actually might not happen at all,” asserted Flint.
In addition, Sir David King, recently appointed as the UK’s special representative on climate change by Foreign Secretary William Hague, believes gas from unconventional sources cannot be relied on to power the UK – whether today or indeed in 20 years-time.
“It will not be a game-changer here as it has been in the US… You will not be able to do that and there would be enormous environmental consequences,” said King in an interview with The Guardian. The special representative also said that the role of gas in future would be much reduced, with the fuel providing only a back-up service in power generation, turned on at periods of peak electricity demand and then turned off again in favour of renewables and nuclear power.
The Prime Minister’s seemingly impromptu push for shale gas production has not gone unnoticed by Britain’s electorate – many of whom see his efforts as being politically motivated, rather than showing genuine concern over high energy prices and the nation’s stalling economy. Indeed, until recently, the Prime Minister’s Conservative Party trailed the Labour Party for 18 consecutive months, according to popularity polls carried out by YouGov – a member of the British Polling Council. Today, however, the two parties seem on an equal footing, but this could soon change.
“Many people find it a little odd that the present government has seldom mentioned shale gas since coming into power. Yet all of a sudden the Prime Minister goes into overdrive on the subject” said Janet Reed, an anti-fracking activist protesting at the Balcombe oil drilling protests in Sussex, South England.
“With an election looming, energy prices forever rising, and the economy still ‘out-of-breath’ from the financial crises that has lasted over five years, many people view Mr Cameron’s current push as means of drumming-up political support, rather than showing real concern for the nation’s countless problems. We all want cheaper energy and the nation needs a healthier economy. But surely there are other ways of achieving this that are more environmentally sound, like renewable energy or even nuclear fuel, dare I say.” asserted Reed.
From a neutral perspective, it is easy to understand why fracking protesters view the Prime Minister’s shale gas push as a means to attract votes. However, despite caution urged by industry experts, much of the Prime Minister’s argument is supported by hard facts. And, if the UK were to harvest a fraction of the nation’s shale gas potential, it would alleviate gas supply pressures that look certain to increase over time.
A vibrant shale gas industry on Britain’s shores will create more jobs and bolster the economy. Independent estimates claim the shale gas sector could create an additional 75,000 jobs over the next decade. Furthermore, it would reduce the nation’s gas imports bill, which is predicted to surge to US$11 billion by 2015, according to Reuters News.
The Prime Minister’s vision of the UK as a major shale gas producer may appear somewhat far-fetched today. But let us remind ourselves of where the US was a mere five years ago. Indeed, when asked whether the US’s shale gas revolution had caught America’s oil industry by surprise, ExxonMobil CEO Rex Tilerson said, “I would be less than honest if I told you we saw it coming, because quite simply we did not.”
Perhaps the likes of Lord Stern and Sir David King will be likewise surprised by future events this side of the Atlantic.
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