In the past few minutes, the Scottish Parliament has voted in favour of a ban on fracking.
After a two-and-a-half hour debate, a majority of MSPs voted in favour of a Labour amendment calling for an outright ban on fracking to meet Scotland’s climate change goals and to protect the environment. SNP members abstained.
Labour’s amendment
The vote was 32 in favour, 29 against and 62 abstentions.
The amendment is not a binding policy.
An amendment by the Green Party which said unconventional gas extraction was incompatible with Scotland’s low carbon ambitions was also passed. That vote was 32 in favour, 30 against and 61 abstentions.
A motion by the ruling SNP was amended with Labour’s amendment and also passed. SNP members again abstained.
Claudia Beamish
During the debate, Labour’s Claudia Beamish said:
“We must say no to fracking. No ifs, no buts, no fracking. Fracking is just another fossil fuel and we don’t need it.”
SNP members said the party was “deeply sceptical” about fracking. They argued that a ban would be challenged by fracking companies if it were introduced before a research programme and public consultation were completed later this year.
Energy minister, Paul Wheelhouse, said only the SNP had promised to make a decision on fracking based on evidence and public opinion.
The people of Scotland will have the benefit of the most substantial body of scientific evidence when the final decision is made, he said.
How MSPs voted?
Scottish parliamentarians voted on party lines in all the decisions. Labour and the Greens voted for a ban or in opposition to fracking. The SNP MSPs abstained. The Conservatives voted against a ban.
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Categories: Politics, Uncategorized
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If we follow the logic then the Scots are giving up their rights to produce oil and gas from the North Sea, correct?
Incorrect. The Scots want to maintain and maximise a healthy Offshore oil and gas industry providing hundreds of thousands of jobs and gas energy security.They also want to promote renewables .Sounds logical to me.
So, John, the logic is that fossil fuels are okay as long as they come from land that is located underneath water?
It would seem to put the country in a difficult spot from an economic/competitive standpoint, no? Offshore gas extraction is more expensive than onshore.
Already jobs, investment, and growth are leaving Scotland because of the policy. More will follow.
“Offshore gas extraction is more expensive than onshore”. I am really interested in keeping up to date with the numbers. Please could you either post the actual costs on here with the source or a link to the source that illustrate your statement.
Well, this puts the cat amongst the pidgeons, interesting that the SNP abstained. I understand that Westminster are sitting on a report of the implications of fracking in the UK. Is this the report that the SNP are looking for?
I couldnt resist this, its a bit back to front but hey! Humour is always the best way to look at these things.
Emperor: “You don’t need to see the reports.”
SNP: “We dont need to see these reports”
Emperor: “These aren’t the reports you are looking for.”
SNP: “These aren’t the reports we are looking for.”
Emperor: “You can go about your business.”
SNP: “We can go about our business.”
Emperor: “Move along.”
SNP: “Move along… move along.”
Apologies to George Lucas.
The Scottish Government have commissioned their own research which is due to be published over the summer:
http://www.gov.scot/Topics/Business-Industry/Energy/onshoreoilandgas/EvidenceGathering
This is despite their own Independent Expert Scientific Panel already concluding in 2014 that onshore unconventional gas could be safely extracted:
http://www.gov.scot/Resource/0045/00456579.pdf
John,
This article estimates that offshore wells are 3-100x more expensive than onshore:
“One is just moving the new exploration techniques that were perfected onshore—offshore. Offshore wells are 3-100x more expensive than onshore, so there is obviously less financial risk onshore if it fails.” http://oilandgas-investments.com/2014/energy-services/offshore-oil-drilling-revolution/
But that’s just for well cost and wouldn’t include some other factors such as the cost of the concession. Here’s another article that addresses shale oil onshore vs. offshore conventional – note that shale oil extraction is fairly expensive so this may not give us a good gauge on the relative costs for extracting gas. Nonetheless, it shows onshore as having a lower breakeven and payback period as well as a higher IRR.
http://marketrealist.com/2016/02/offshore-onshore-drilling-perform-oil-prices-tumble/
John, You’ll find this article of interest: http://www.epmag.com/north-sea-remains-hard-sell-even-bp-shell-850491?utm_source=twitterfeed&utm_medium=twitter#p=full
Lots of North Sea assets on the block and few buyers. Bid/ask spread is wide because buyers don’t want to pay up for high cost assets with uncertain production profiles, and large decommisioning expenses.
Here’s a quote: “In general it is high cost region in which you have to keep spending to stay in business and have significant decommissioning and restoration costs.”
Bill, Thank you for your research. I have read it but do not see the comparisons of North Sea against UK onshore shale in your first two links.
Your first link references offshore unconventional in US.Gulf of Mexico. This is not comparable with North Sea Conventional.
Your second post clearly states
. “These unconventional sources have started gaining popularity in recent years, but the crude from these sources are more costly
to produce than conventional sources are”.
and
“Traditional onshore drilling is cheaper than offshore drilling, but the overall cost of unconventional onshore oil is on par with or exceeds offshore drilling costs”
Again not referencing UK
Here is UK figures
By end of 2016 average operating costs of North Sea is £15 per boe. That equates to 25.8p per therm across all fields.
Mike Tholen, Oil & Gas UK’s economic director, detailed the improvements: “Strong investment in asset integrity over the last four years, coupled with measures being taken to improve the efficiency of assets offshore, have resulted in better output from many existing fields and we expect the rate of decline in production from those fields to slow significantly over the next two years. Taken together with the start-up of the sizeable Golden Eagle field, the Government’s provisional data show that production in the first half of 2015 was 3 per cent higher than the same period in 2014, an indication that over this year, we are likely to see annual production increase.”
The industry has been focused on bringing costs down and improving efficiency for the past year and a half and Oil & Gas UK last week launched its industry task force to step up the pace of change.
Mr Tholen continued: “We are now seeing companies’ commitment to improving cost and efficiency reflected in industry performance. We anticipate that by the end of 2016, companies will have reduced the cost of operating their existing assets by 22 per cent (over £2 billion). Whilst the improvement will be offset to some extent by £1.1 billion of operating expenditure relating to new fields brought onstream in the intervening period, these new developments are vital for the future of our industry, in terms of both oil and gas production as well as the commercial opportunities they bring for the supply chain.”
This more positive production outlook will help to reduce the average operating cost per boe for across all fields from an estimated £17.80 in 2014 to £17 this year and by a further £2-3/boe to around £15/boe by the end of 2016. The 15 per cent reduction from 2014 to 2016 almost reverses the last three years of increases.
The predicted cost for European shale varies but on average is over twice the price. Even Centrica suggest nearly double.
In a 2013 submission to Parliament, Bloomberg said it would cost between 47 and 81 pence per therm to extract shale gas in Europe (using USD-to-GBP conversion rates).
The Oxford Institute for Energy Studies said in its 2010 report “Can Unconventional Gas be a Game Changer in European Markets” that shale extraction would likely be even more expensive, costing between 49 and 102 pence per therm.
EY, in its 2013 report “Shale Gas in Europe: Revolution or evolution?”, went further still, saying it would cost between 53 and 79 pence per therm.
And Centrica, which backs UK fracking firm Cuadrilla, said it would cost at the very least 46 pence per therm to frack, according to stats referenced in this 2012 EU report.
Your third link is relevant however my response covers this as it is clear that UK shale could never compete with North Sea prices and therefore any increase in market price puts North Sea producing more at a quicker rate. There is 40,000 unemployed skilled offshore workers who will get back to work if prices rise and infrastructure in place for much more output.
I think this is the most current and well sourced data relevant to comparing The North Sea Industry with a UK shale industry.
John, these cost you are quoting for North Sea gas BOE appear to be OPEX costs for existing Nort Sea producing fields which do not include sunk CAPEX (drilling of production wells, platforms, processing equipment, compression, pipelines etc.). Most importantly they do not include decommisioning and abandonment costs which are huge. The various costs quoted for shale gas onshore UK appear to include all of the CAPEX, OPEX and abandonment within the per therm figure i.e. life cycle costs. Is this correct?
It would be more appropriate to compare with full life cycle costs for new North Sea gas fields – ther are one or two. The Golden Eagle Field is an oil field.
Total’s Laggan development may be a good example but it was discovered 30 years ago and has only recently come on production at a cost of £3.5billion which appears to be a billion more than originally budgeted. I don’t have the reserves / costs per mscf but there is a quote from Total:
“Will Total make a return on its investment at current gas prices? “We can, but it requires extremely good performance in production, and to be extremely strict on cost,” says the company’s UK managing director, Elisabeth Proust.”
Operating a complex subsea development in a West of Shetland environment in 600m of water depth requiring DSV intervention is not going to be cheap. I cannot see how the OPEX for this type of offshore development can ever be lower than onshore gas, fracked or not fracked. And what about decommisioning costs?
By the way I fully support all offshore oil and gas exploration and production as well as onshore. If we can find more oil and gas offshore and development is cost effective then thats great for all of us and the Government. But I think you will find new finding costs and development and OPEX costs for new fields are prohibitive. Look at the offshore rig situation. Things will pick up again with sustained higher oil prices as they have done before in several previous boom or bust cycles which the industry seems to suffer from. But it will be a while yet.
I hope that Labour in England will now join the Lib Dems and state they too oppose shale and want an outright ban. Political support is waning and public opposition is growing – this industry is opposed throughout the world.
I also hope Labour in NI and Wales also vote to ban fracking as well. Wales currently has a moratorium – an outright ban across the UK Labour party would be a great result.
Just likr France who ban shale to suit their nuclear industry the SNP ban shale to protect their offshore which is the main revenue for them.
Are they ready for a huge influx of refugees from Ryedale?