UK shale gas bonanza 'not assured'

Shale gas possibility: Will the UK's energy strategy follow the US?

Shale gas in the UK could help secure domestic energy supplies but may not bring down prices, MPs report.

The US boom in shale gas has brought energy prices tumbling and revitalised heavy industry, but the Energy and Climate Change Committee warns conditions are different in Britain.

The MPs say the UK's shale gas developers will face technological uncertainties with different geology.

And public opinion may also be more sceptical, they add.

The UK is a more densely populated landscape, and shale gas operations will be closer to settlements as a consequence.

'Cash sweeteners'

The MPs believe operators will have to overcome potentially tighter regulations.

What is more, the extent of recoverable resources in the UK is also unknown, so the report concludes that it is too soon to say whether shale gas will achieve US-style levels of success.

The MPs argue that this means the Treasury cannot afford to base the UK’s energy strategy on the expectation of cheap British shale gas.

They urge the government to stop "dithering" over energy policy, though, and to ensure there is a system to rebut what "scare stories" may arise over the environmental impacts of shale gas.

And they applaud the government's decision to offer cash sweeteners to people near shale gas facilities.

Success with shale gas will reduce dependence on imports and increase tax revenues, they say, but there is a downside: if it takes off, shale gas will shatter the UK's statutory climate change targets unless the government moves much faster with carbon capture and storage technology.

Tim Yeo, chairman of the Energy and Climate Change Committee, said: "It is still too soon to call whether shale gas will provide the silver bullet needed to solve our energy problems.

"Although the US shale gas has seen a dramatic fall in domestic gas prices, a similar 'revolution' here is not certain."

Tony Bosworth, from Friends of the Earth, responded: "This does little to back the case for a UK shale gas revolution.

"Fracking is dirty and unnecessary – it's little wonder so many communities are in opposition. We should be building an affordable power system based on our abundant clean energy from the wind, waves and sun.”

'Front and centre'

And Jenny Banks from WWF-UK said: "It's simply impossible to keep global warming below 2C and burn all known fossil fuel reserves – let alone exploit unconventional reserves like shale gas.

"In other words, the climate impacts of new fossil fuel developments must be front and centre of any decision on shale gas, not a secondary concern."

But the government's chief energy scientist, David MacKay, has warned that the UK would need to increase its nuclear fleet four-fold or its wind energy 20-fold to decarbonise heavy industry.

Both these options appear improbable, so the government is most likely to continue to give gas a prominent role in its energy strategy.

Ken Cronin, chief executive of the UK Onshore Operators Group, said: "The industry is pleased that the Committee supports our view that community engagement is key to public acceptance of shale gas exploration and that communities should share in the benefits of development."

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