I have long been bemused by the politics of shale gas in the UK. It’s hard to understand why a Conservative-led government is not trying to get the stuff out of the ground as quickly as possible – there’s potential tax revenue for a cash-strapped Treasury and most believe that George Osborne’s environmental credentials are little more than skin deep (if that).
It’s easier to see why green groups have focused on peripheral issues such as water pollution or earthquakes, rather than climate impacts – it sexes things up for the public – but the addiction to cheap campaigning stunts has obscured the only really important issue: will pumping out more domestic gas make carbon emissions harder or easier to reduce?
Look at what a mess Greenpeace has got itself into over the issue. It is resolutely opposed to fracking, of course, but, at the same time is determined to maintain that Britain has little, if any, unconventional gas that can be removed at market prices. This is absurd. If there ain’t any gas, why worry about it?
You see how boxed in Greenpeace has become in its most recent press release:
Every analyst, from Poyry, to Ernst and Young and even Cuadrilla says UK shale will have little or no impact on bills.
“MP’s [sic] voting tomorrow on the decarbonisation of the power sector should remember that sending drilling rigs into our rural villages in a desperate hunt for gas could cost them votes. They should instead vote for clean, renewable energy that will bring bills down over time.”
This borders on the mendacious. Every analyst? Play around with Google for a few minutes and you’ll find that this claim is far from the truth. And that includes those analysts Greenpeace mentions by name. Take Poyry. It argues that just Lancashire shale could provide a fifth of the UK’s gas by 2030, reducing wholesale gas prices by £8bn a year between 2014 and 2035, and wholesale electricity prices by 2-4%. Sounds a big deal to me.
Then there’s Ernst and Young. In a 2011 report, its analysts argued that shale gas would bring undeniable economic benefits to European countries, including by exerting downward pressure on prices (although not as dramatically as in the United States, primarily due to the prevalence of long-term gas contracts in the European market). Ernst and Young is cautious about the prospects for the UK’s shale gas, but still sees the emergent industry as a threat to higher-priced renewables, “combin[ing] the prospect of substantial financial reward for prospectors with carbon gains for regulators if coal is substituted out of the energy equation.”
As for Cuadrilla, it claims that “natural gas from shale has the potential to boost the UK’s gas production, reduce the UK’s dependency on expensive foreign energy sources and to lower gas prices.” It has also been excoriated by – yes – Greenpeace for funding a report by the Institute of Directors which argues that “growing shale gas production could play a key role in reducing potential upwards pressure on gas prices from rising demand in rapidly developing countries such as China and India.”
So that’s three out of three sources that are significantly misrepresented by Greenpeace’s claims. Now I am no geologist, but I suspect that British shale gas is worth worrying about it because there’s quite a lot that can be brought out of the ground, and at a price that will drop as extraction methods improve.
If I’m right, that’s forms part of a much bigger fossil fuel renaissance that has been driven by high energy prices since 2008. We live in a world where a LOT of ‘new carbon’ is being brought into play, just as damage to the world’s climate begins to reach critical levels. Pretending this isn’t happening may garner Greenpeace a few newspaper headlines, but – in the long term – it ain’t going to help.