Shale gas opportunities

Shale gas production has the potential to drive down gas prices and thus stimulate economic activity

During these times of economic uncertainty and growing unemployment the UK badly needs projects that will show a high real rate of return that is not dependent upon subsidies from the taxpayer or the consumer. I was therefore interested to read the article in the February edition of PE on the subject of shale gas.

Experience in the USA shows that shale gas production has the potential to drive down gas prices and thus stimulate economic activity and this is contributing to that country coming out of recession. It is also a game changer in geopolitical terms since shale gas production in Europe and Poland in particular will break the stranglehold on gas supplies that Russia is exploiting to control EU countries. It was therefore disappointing but not unexpected to read about the hostility of the Tyndall Centre at Manchester University to the idea of shale gas production in the UK.

Their reasoning appeared to be based upon the fear of new gas fired power stations delaying the decarbonisation of power production. This ignores the fact that wind power requires virtually 100% back-up due to the intermittency of wind and gas turbine plant is a relatively low carbon way of providing this. During the weekend of the 11th and 12th of February, when there was a region of high pressure over the country, wind was producing less than 1% of the available power and open cycle gas turbines were producing some power as well as the combined cycle plants. It also ignores the use of gas as an industrial and domestic fuel and as a feedstock for chemical production. In the USA chemical production that had moved to countries where cheap feedstock is available are beginning to return. 

Shell have recently started up a gas to liquids plant in Qatar which produces diesel fuel from natural gas. The construction of similar plants in the UK would create employment for engineers, construction workers and manufacturers and may eventually reduce the cost of road transport fuel. The latter would exert downward pressure on prices generally.

These opportunities need to be exploited to the full, albeit with the necessary regulatory safeguards in place. In Poland and China they are leaving us standing.

Peter Martin, West Byfleet, Surrey

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