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Stewart Dalby: Britain hastens to get a shale gas boom going

Stewart Dalby: Britain hastens to get a shale gas boom going
An energy supply gap is looming, might shale gas be the answer?

The UK government is very keen to get what it hopes will be a shale oil and gas revolution underway in the country.

Domestic gas supplies from shale are seen as a potential remedy to Britain’s chaotic energy mix, so there is an enthusiasm among policy makers for the emerging sector.

Recently, with a sense urgency not usually seen in government bodies, the Oil & Gas Authority awarded 93 onshore hydro-carbon licences across 159 blocks in the government’s 14th licensing round. Some 47 companies were involved in the round. Some 75% of the blocks contain shale.

It has recently been announced that the local government secretary Greg Clark, rather than local councils, which have been obstructionist, would have the final say over the applications.

Last week, a government-sponsored task force said shale gas drilling was relatively safe and should be allowed in the UK subject to strict environmental and safety conditions.

Also last week MPs voted by 298-261 in favour of fracking under national parks, Areas of Outstanding Natural Beauty (AONBs), Sites of Special Scientific Interest (SSSIs), World Heritage sites and groundwater protection zones.

In other words the government has been busy dismantling the barriers and obstacles that it feels have stalled the development of shale zones because of environmental concerns about the use of controversial fracking methods used to extract the oil and gas.

There are known to be considerable shale reservoirs of both oil and gas in the UK.

But it is gas that the government is interested in because it is seen as vital to transforming the country’s energy mix.

The prize could be great. The Bowland Basin is a vast area stretching from Lancashire in the north west of England right across to Yorkshire in the north east.

A British Geological Society (BGS) survey has estimated that there could be 1,300 trillion cubic feet (TCF) of gas in the Bowland basin. Recovery rates are low for shale gas. But as the UK currently uses 3.5TCF of gas a year one tenth of this estimate would equate to more than 40 years gas supply for the UK.

Britain currently imports half of the gas it uses and the figure is expected to rise to 75% in the next few years.

Home grown shale gas could reverse this trend and improve security of supply.

But there is more to the argument for shale gas than this.

British energy policy is deemed to be in such a mess that the country could be facing serious power black outs in the next few years.

The reasons that energy policy is chaotic can be traced back to the Gordon Brown era.

In 2008, his Labour government passed the Climate Change Act, which committed Britain to cutting greenhouse emissions by 80% (from 1990 levels) by 2050.

This paved the way for subsequent governments to introduce a confusing mixture of penalties for heavy polluters, such as coal fired power stations, to get them to close down and incentives or subsidies for renewables, like wind and solar as well as nuclear projects.

At the same time, the hope has been there would be more gas-fired power stations to help fill any energy gap.

Unfortunately, things have not gone to plan.

Coal fired power stations, which account for 30% of power supply were given until 2025 to phase themselves out. But they are closing down at a faster rate than expected.

The renewables sector has grown rapidly, particularly wind and solar.

Ten years ago only 5% of electricity was generated by renewables. By the end of 2014 it was 19.2% and could now be 23%.

But renewables have not grown enough to replace coal, and with subsidies now being closed off are unlikely to grow further. Thus a supply gap is looming. 

Gas currently accounts for 30.2% of electricity generation. But this is essentially through back up schemes for when renewables have down time.

Investors have been scared away from the idea new gas plants by the policy uncertainties.

Only one new gas-fired power station is currently under construction at Carrington in Greater Manchester.

But this could change if circumstances change and this means that a gas shale boom gets going. 

Mark Abbott managing director of Egdon Resources, which is heavily involved in shale projects says: “It has got to be gas. The lead time on nuclear is too long, renewables can’t do it. I know of ten gas fired power projects that could be built once we get gas volume production in the UK”

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