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Fracking in the UK is neither new nor intrusive. The picture to the left is of a fracking pump that has been extracting oil and gas daily for over fifty years. It is also situated next to the Royal Society for the Protection of Birds nature reserve at Beckingham, Nottinghamshire.

As the UK looks towards the exploitation of shale gas fields a detailed new report from the Institute of Directors (IoD) sets out the massive potential that the extraction of Britain’s shale gas reserves has to aid the economy and also to aid the environment.

The IoD report is entitled Britain’s Shale Gas Potential, and it explores the extent of UK shale gas, the practical and policy implications of fracking and the lessons that can be learned from the US’s experience opening up their reserves.

In 2010 Britain’s onshore shale gas reserves were estimated to be 5.3 trillion cubic feet (tcf) but the British Geological Survey estimate is expected to be revised upward later this year, possibly to as much as 200 tcf. Offshore reserves – which are harder to extract – are estimated to be 5-10 times larger than those onshore

In the US, shale gas accounts for 23% of domestic gas production and 22% of domestic consumption, and has led to a dramatic fall in energy prices for industry and households. By 2020, America’s shale gas boom is expected to create 3.6 million US jobs both directly and through the benefits of cheaper energy to the wider economy – particularly in manufacturing. Already substantial manufacturing capacity has returned from overseas locations.

As natural gas and renewables have replaced coal burning, the US has been able to cut carbon emissions by 450 million tonnes – more than any other country in the world.

The IoD report uses a conservative estimate of UK production, assuming we would be just half as successful as the Americans – if that was the case then the benefits to the UK could include:

  • 35,000 extra jobs, helping to offset the ongoing decline in the North Sea oil and gas industries;
  • Enough onshore supply to meet 10% of the UK’s gas demand for the next 103 years, preventing the expected rise in costly gas imports;
  • Environmental benefits from shifting from coal-burning electricity generation to shale gas which results in lower emissions of carbons and particulates. Gas emits half as much CO2 as coal – using gas as a larger part of the energy mix, rather than coal, would help to save up to 45 million tonnes of CO2, 8% of the UK’s annual carbon emissions. Such a shift would also help to reduce the 29,000 annual deaths from poor air quality in the UK.

Much publicity – and fear – surrounds the issue of “fracking”; the hydraulic fracturing method used to extract shale gas but the report finds that such concerns are unsubstantiated. Reports of earthquakes caused by fracking must be taken in proper context. In the last 50 days, the UK experienced three “natural” earthquakes as large or larger than the bigger of the two earthquakes caused by the Cuadrilla drilling in 2011. None of them caused any damage.

With a proper regulatory structure, fracking is no more risky than other hydrocarbon extraction, and should be allowed to proceed in the UK. Regulatory authorities should study closely the experience of the US, where more than 20,000 wells have now been drilled.

The report concludes that shale gas has huge potential benefits for the UK, both economically and environmentally. We have a massive reserve of shale gas sitting right beneath our feet, and we must take advantage of it. Shale isn’t the answer to all our problems, but it would be a really beneficial part of the energy mix – creating jobs, driving decarbonisation and helping to prevent constant rises in energy prices.

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Category: Political Comment

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