Shale gas could help to deliver energy security but we need a clearer strategy to exploit it

Editor's comment

The exploitation of shale gas is proving to be a hugely divisive issue. On one side you have the ardent advocates, who cite it as an enormously important potential source of energy, pointing to the dramatic impact it has had in the US. In the opposing camp are the vocal campaign groups, such as the provocatively named Frack-Off, who claim that all unconventional extraction methods threaten to devastate countryside, while increasing our contribution to the global ecological crisis. In truth, both diametrically opposed positions are probably some way off the mark.

Shale gas has transformed US energy markets. Since 2005, it has grown from 2% of natural gas production to 24%, and prices have fallen as a result. Furthermore, anticipation of self-sufficiency in this energy source is underpinning the nation’s vision of a resurgence in manufacturing.

But the success of shale gas in the US doesn’t necessarily mean it can be replicated in the UK. Yes, the UK does benefit from shale gas-bearing geology, including extensive fields in the North East, Lancashire, Somerset and Avon, South Wales and the South East. Indeed, estimates suggest that 6,000 billion m³ of gas resources are available. Currently the UK’s annual gas consumption is of the order of 100 billion m³.

But in the UK, and Europe more widely, the market structure and dynamics are different and the costs of exploitation are uncertain as there has been no production outside the US to benchmark against. And, as a report from the Institution of Mechanical Engineers points out, European geology appears to be less amenable to shale gas exploitation, and the environmental requirements across the EU are potentially tighter. So future exploitation is anticipated to have a far smaller impact on gas prices in the UK than it has had in the US.

So what is the sensible approach at a time when claim and counterclaim about this most controversial of energy sources are only likely to get louder and more confusing?

First, more data is required, both to ease public concerns over the environmental impact of shale gas extraction and to give us a more accurate prediction of resources. The government should therefore seek to accelerate the enhancement of the environmental regulatory framework to ensure safe exploitation of shale gas in the UK as soon as possible. Recent studies have shown that the UK’s regulatory framework is fundamentally fit for purpose for shale gas exploration, but government should urgently extend the framework for production to build public confidence.

This has to be underpinned by the development of a UK industrial strategy to include a regional focus for exploitation of shale gas. This would provide a framework upon which to support the creation of skilled jobs with future export potential, while contributing to the nation’s energy security. There have been too many examples of the UK missing out on emerging technologies.

And, while all this is happening, the government should look to prioritise the development of carbon capture and storage (CCS) with gas-fired power plant. The UK is committed to a decarbonised energy system by 2050. With gas-fired plants projected to make up a substantial part of the generation mix in the coming decades, there is an urgent need to deploy CCS in gas power stations.

Shale gas offers tremendous potential. But we are still crying out for a clear and considered approach.