Shale gas is not the answer to all the UK’s energy policy challenges, peers said last week, but it appears to be a solution to a lot of them.
The Lords Economic Affairs Committee’s (EAC) study into the economic impact of shale gas and oil, said a substantial impact on oil and gas prices in the UK, such as that experienced in the US, was “unlikely”.
However, peers did state that, despite this, “abundant new shale gas reserves are bound to have a restraining effect on prices”.
This comes as a timely reminder for the government, and the rest of Europe, as the G7 state that Russia should not use energy as a weapon and that Europe should try to find more diverse energy resources, one of which is shale.
The three key points that peers were keen to stress in their report were: the increased security of supply that shale gas could provide; the boost to employment that the development and exploitation of the UK’s resources could have; and the retaining and re-shoring of energy-intensive industries and the petrochemical industries in the UK.
With these wins available, peers have urged the government to “go all out for shale”.
Lord MacGregor, chairman of the House of Lords EAC, commented: “The UK has not yet left the starting gate. Developing a successful shale gas and oil industry in the UK must be an urgent national priority.”
He warned of a “regulatory logjam” holding up the development of the shale gas and oil industry, citing this as the primary reason why the Environment Agency has not received an application, nor approved a permit, for fracking since 2012.
As it currently stands, energy and drilling companies face at least 16 different regulations when applying for a permit to undertake the controversial fracking process.
Lord MacGregor said: “The government has made attempts to simplify the regulatory regime for development of shale, but these measures have not gone far enough.
“Our report shows that unnecessary duplication and diffusion of authority are still rife throughout the regulatory process.”
The government is expected to remove one of these barriers to development by making changes to the trespass law as part of the forthcoming Infrastructure Bill. This would allow companies access under privately owned properties to hydraulically fracture shale rock, to access the oil and gas.
Responding to the report from the EAC, energy minister Michael Fallon said the government has made “great progress” in setting up a regulatory regime to support the development of the UK’s shale gas industry. He added: “It’s now up to operators to seize these opportunities and step up the search for shale.”
Alongside the potential benefits to the UK of a shale boom, the House of Lords report stated that delays to the development of the UK’s shale industry were partly caused by public resistance. Peers recommended “that the industry improves its presentation and communication skills and puts across more convincingly the economic and employment gains shale development can bring”.
Essentially, the Lords are saying that a better co-ordinated campaign could win over the majority of public doubters. But Greenpeace chief scientist Doug Parr slammed their report, saying: “This is just more taxpayer-funded cheerleading from unelected politicians who seem all too happy to ignore
the country’s legitimate concerns about fracking.”
Despite resistance from groups such as Greenpeace, the Lords were convinced that the use of shale gas would help the UK to meet its 2020 carbon emissions targets by displacing coal from the UK’s energy mix.
They also dispelled other environmental concerns as “unfounded” and urged the government and industry to put across these points more clearly to the public.
Ken Cronin, chief executive of the UK Onshore Operators Group, said: “We are working with government, industry, local communities and other interested parties to create the right environment to develop the UK’s shale gas reserves safely and in the most environmentally sensitive way possible, while enabling local communities to share in the national benefits shale gas can bring.”