Widespread fracking could be prevented in the UK by public opposition, the large amount of investment needed and limits on carbon emissions, MPs heard yesterday.
Three witnesses to an inquiry into the risks of fracking* questioned whether a large-scale shale gas industry in the UK was practical. They were also unconvinced by the government’s case that shale gas would give the UK energy security or provide a bridge to a low carbon economy.
Tom Burke, chair of the sustainability consultancy E3G, said shale gas had to be developed on a large scale to have a significant impact on prices and energy security. “If you don’t go to scale it is very hard to see how the cost of any gas produced will begin to compete and even then it might not”, he said.
“If you are talking about 10 or 20% of our gas coming from fracking that is billions of pounds of investment”.
But he suggested this was incompatible with government policy to use shale gas as a short or medium-term “bridge” to low carbon alternatives that would allow the UK to meet its commitments on carbon emissions.
That level of investment would expect returns over 35 years, he said.
“You can’t suddenly decide you want to switch that off if you think you have reached the end of your available bridge. As investors think that point through I think we will hear less of the idea that it is a bridging strategy.
“If you don’t go to scale it is very difficult to get the costs down to where you can compete with the existing or readily foreseeable competitors. That is likely to be a disincentive to investors”.
“If you are building your energy policy around the availability of shale gas for energy security reasons, is that a realistic policy?”
Mr Burke said investors would also be dissuaded by public opposition to fracking. Asked by the Conservative Caroline Spellman how to get greater public acceptance for the shale industry, he said “You do not start from here”.
He said: “Public acceptability will be a very strong issue for investors looking for exploration to scale”. Opposition to fracking would influence the appetite of investors and would be considered when they decided whether shale gas was deliverable, he added.
Mr Burke said the mining industry had learned the hard way about consulting communities. “You have to start very early”, he said. “You make your social investment before you make your financial investment decisions, otherwise you find your decision-making is out of step with the community”.
The climate scientist John Broderick, of Tyndall Manchester, said time and the issue of unburnable carbon were not on the side of shale.
He suggested that a large-scale shale gas industry was unlikely to displace coal in electricity generation (as supporters of fracking often suggested) because Britain was already phasing out its coal-fired power stations. “If we are talking about the mid to late 2020s for large scale potential shale we will have very much diminished coal” he said. The inquiry heard that the use of gas in heating was also likely to shrink.
Dr Broderick said the climate change impacts of shale gas was not just about fugitive methane emissions. He said carbon budgets, based on avoiding intolerable climate change, showed that the UK had far more fossil fuels in reserves than could be burned.They would be a very strong constraint on shale gas.
“We know that we do not have the emissions space to burn the quantity of gas from the Bowland shale.”
He said the country was looking to transform the economy.
This is not an issue of high or low intensity fossil fuel. It is between a high emission intensity fossil fuel economy and one that is very different economy based around very low or zero carbon technology”.
Asked if shale gas was compatible with the UK’s climate change commitments, Dr Broderick said the UK could increase emissions from the energy sector from shale gas production if other parts of the economy reduced their emissions.
But he said this would not solve the problem of adding new fossil fuels to the international market. “We know that the quantities that people have been talking about in the industry are larger than the emissions space that we have in our UK budget so that that issue of expansion on the international market is a real one”.
“If we don’t have stringent and binding agreements on global carbon emissions then adding new fossil fuel resources would tend to increase emissions in total and work against our commitment on climate change”.
The third witness, Professor Paul Stevens, of Chatham House, told the inquiry: “I remain very sceptical that shale gas will be viable economically. I am sceptical from an economic, climate change and energy security supply point of view”.
He argued that domestic energy did not guarantee security of supply. He said a UK shale industry would be constrained by the lack of an established supply chain and infrastructure. He also said there was a shortage of skilled oil and gas employees. The current workforce was aging because young people wanted to work in renewables.
Professor Stevens said the experience of the US shale industry was not comparable to Britain. For example he said: “It was built on a mountain of debt. In the UK that is not going to be an option”.
*The inquiry on fracking risks is being undertaken by the House of Commons Environmental Audit Committee.