Desperate Times …
With Liz Truss’s backing fracking policy in disarray, the industry is starting to realise that that its reprieve might be rather short lived, so we are seeing a concerted (if not very successful) attempt to influence public opinion by pushing the usual buttons.
Charles McAllister of industry mouthpiece UKOOG has been a busy boy. Last week he was doing a stint on the Net Zero Watch Fracking Panel to an audience of 10 people, and on Saturday he got an opinion piece published in the Yorkshire Post . As this piece was full of some rather questionable material I thought it would be interesting to analyse it.
Why the country needs to back fracking and become energy independent – Charles McAllister
With the right policy support from Government, Yorkshire, Lancashire and the East Midlands could become the UK’s energy powerhouse for decades.
OK – that’s not a great start – the volumes of gas that are currently estimated to be in place and extractable could not make the UK energy independent. According to the central scenario of UKOOG’s own modelling, they couldn’t even make the UK gas independent.
As the current cost of living crisis hits families across the country hard, it is absurd that we continue to import gas from other countries thousands of miles away while ignoring the gas we have under our feet.
Charles is trying here to use the current cost of living crisis to trigger people. He knows that there is absolutely no way that UK shale gas could be developed in time to make any significant contribution to resolving the current crisis.
The independent Climate Change Committee has been clear that we will need gas as part of our transition to Net Zero in 2050.
Nobody is seriously arguing that we will not use at least some gas in the run up to 2050, so he is stating the obvious there.
Had the Government not banned fracking in 2019, the industry could have been warming UK homes with UK shale gas this winter while helping to reduce the large increases in energy bills the country is facing.
The Government did not ban fracking in 2019. It placed a moratorium on it. Had they not done this they would have carried on at Preston New Road, provoked yet more earthquakes and then a total ban probably would have happened. Had they somehow managed to carry on without causing further problems UKOOGs own modelling suggests that they might have produced just over 100 billion cubic feet of gas by now assuming no delays in getting planning permissions. We use about 2.7 trillion cubic feet of gas in the UK every year. Nobody can credibly suggest that that level of production could have helped “reduce the large increases in energy bills the country is facing”
The energy crisis has made it clear that our domestic energy supply is in a perilous position. Two decades ago, the UK was a net exporter of energy and yet, last year the UK produced the least amount of energy in over 50 years with a 57 per cent gas import dependency. By the 2030s our natural gas import dependency could be as high as 80 per cent.
Yes the UK will import an increasing percentage of the gas it uses. However, the demand for gas is also projected to fall by 33% by 2050 so it’s an increasing percent of a decreasing number. We have a very robust and disparate supply for imported gas and it is only in truly exceptional and temporary circumstances like the Ukraine crisis that supply might be constrained. What the energy crisis does make clear is that dependency on fossil fuels leaves us open to pressure from regimes like Russia.
Shale gas development has the potential to drive billions in investment into the North of England, creating tens of thousands of well-paid and skilled jobs, as well as billions in tax revenue for decades.
Shale gas is an industry, so it involves investment and employment, although these are frequently exaggerated and there doesn’t seem to have been much evidence of these at the couple of sites they have already fracked. It is also an industry that receives massive tax breaks
Fracking companies are likely to be eligible for tax breaks, potentially worth billions, that the government is extending to oil and gas companies to encourage new exploration of fossil fuel resources.https://www.theguardian.com/environment/2022/jun/28/fracking-firms-could-be-eligible-for-uk-tax-breaks-worth-billions
Shale gas companies have also committed to sharing the revenue from production sites with local people. To put this in context, a single shale gas pad could deliver up to £400m in community benefits based on current gas prices.
Looking at the gas futures market, current gas prices are highly unlikely to persist and will revert to a level about 20% of what they are expected this Winter over the next few years, so this valuation (which is not backed up here by any data to show its assumptions) is essentially meaningless.
And it only seems like yesterday that UKOOG were telling us that “A single pad of 40 laterals would provide £13.5m in community benefits”. On the day they said that the UK natural gas price was about 44p a therm. On the day he wrote his article it was 277p a therm. So it is now 6 times more expensive but his “community benefit” value has gone up 30 times. I’m sure he can explain why that is.
Polling showed that most people in the North of England would back fracking in their local area if they received 25 per cent off their annual energy bill, which the community benefits offer can deliver. It should also be noted that £100,000 goes to the local community for each exploration site.
How very strange then that polling also shows that a huge majority of people in the country would not back fracking in their local area even if they received 50% off their electricity bills.
The benefits to the Government’s levelling up agenda are enormous.
If the UK doesn’t boost its gas production from the enormous and world class Bowland shale formation in the North of England, we will lock ourselves into reliance on more polluting and more expensive gas imports for decades. We will be heavily reliant on Liquified natural gas (LNG), shipped to the UK from Qatar, Peru and the USA to meet our demand, with a carbon footprint four times that of UK shale at the point of delivery.
It is telling that Charles tries this old chestnut again. Any meaningful comparison between the carbon footprints of shale gas and LNG has to be full life-cycle. In other words it has to include combustion. Once this is taken into account data shows that LNG may even have a lower footprint, and in the middle of the estimate range has no more than a 10% higher footprint. Why does he need to misdirect like this?
To attract LNG, we must send up high price signals to outbid the 42 other countries which import it, with a potential gas import bill of £1 trillion by 2050. Shale gas development would not only reduce the public’s energy costs, but it would also help to reduce our carbon footprint.
There is no credible evidence that UK shale gas will either reduce UK energy costs or the UK’s carbon footprint. In any event gas that is not imported by the UK will almost certainly be burnt elsewhere so UK fracking will actually increase the total amount of carbon in the atmosphere. This particular problem is global not local.
We must also face new geopolitical realities. The barbaric invasion of Ukraine and subsequent reduction of gas supply from Russia to Europe has created turmoil in the energy markets.
True but you are just pushing buttons here Charles, not saying anything germane to the argument you are pushing.
It is also important that we recognise that the impacts of fracking have been massively exaggerated by extremists who have been naïve about geopolitical realities, too inflexible, too dogmatic, and too hasty. Their actions have influenced previous Government policy despite the ‘dangers’ they present having no basis in fact or reality.
Where to start here? Those pushing fracking have made a pig’s ear of energy policy over the last decade, with hugely wasted opportunities to develop renewable energy. They have been too inflexible, too dogmatic, and too tardy. The dangers that have been identified with fracking are well-documented and when it comes to local issues, the fact that the fracking industry cannot either predict or mitigate the seismic activity that they provoke is absolutely incontestable. Far from “having no basis in fact or reality” these earthquakes are the lived experience of dozens if not hundred of local people. This is just risible jowl wobbling from somebody with a vested interest.
The moratorium imposed on fracking in 2019 was based on a report on the PNR 1z well in Lancashire, in which the largest event was 1.5 on the Richter scale, the equivalent of dropping a honeydew melon in your kitchen.
Yes, the Government took its decision based on the OGA report on PNR1z. They could hardly have done so on the basis of a non-existent report on PNR2, where the 2.9Ml quake rocked local houses. as it had only happened 2 months before.
If Charles needs any suggestions about where to put his honeydew melon I’ll be glad to oblige.
Government policy must be focused on ensuring UK shale gas is delivered in a timely manner.
No. Government policy must be focused on ensuring that the UK has a safe and sustainable supply of renewable energy so we are not dependent on fossil fuels from questionable regimes in future.