Industry

Spend shale revenues on renewables and energy efficiency, says fracking supporter

Remsol Blueprint for shale gas community benefits

A company which supports the shale industry has proposed that proceeds from fracking should be used to makes homes more energy efficient and to pay for household renewable energy schemes.

The idea by Remsol, which has worked on fracking waste treatment, was published on Wednesday (10/08/2016) with little attention.

In a policy paper the company proposed using revenues from fracking for solar panels, heat pumps, double glazing and loft and cavity wall insulation.

The source of the money would be separate from the government’s shale wealth fund, which dominated headlines earlier this week with the suggestion of direct payments to people in shale areas.

The government payments would be from tax receipts on shale revenues. The Remsol idea is to spend money from a voluntary industry community benefit scheme comprising 1% of revenues from shale gas production.

Remsol, which describes itself as a sustainability consultancy, claims its ideas, if adopted, could give owner-occupiers direct and indirect benefits of more than £41,000. There would also, Remsol said, be cuts in climate change emissions.

Lee PettsLee Petts, managing director of Remsol: said.

“Until now, there hasn’t really been a great deal of discussion about just how the 1% of revenues could be spent. With our policy paper, we wanted to show that it’s possible for substantial numbers of local people to benefit directly from hosting shale gas in their communities.

“Opponents of shale gas regularly say that it will reduce investment in renewables, and lead to increased emissions but, as our paper shows, it’s possible to use the industry’s community benefit payments to actually boost renewables deployment and create climate change benefits.”

“Improvements to 260+ homes”

Remsol estimates shale gas revenues from a typical site would be enough to improve the energy performance of more than 260 local homes over 20 years.

The figures assume a maximum spend of £12,000 per property and revenues from shale gas based on forecasts in a 2013 report by the Institute of Directors. This predicted that a shale gas pad with 10 vertical wells and 40 horizontals would produce 128bn cubic feet of gas over 20 years.

Based on this year’s gas prices, Remsol estimated this would generate revenues of about £395 million per pad and, at 1%, £3.95 million for the community benefit scheme.

If all the £3.95 million were used it would pay for the energy improvement work Remsol suggested. But the paper says the industry scheme proposes to give two-thirds of the 1% to the local community. The remaining one-third would be distributed at a county level.

“£41,000 direct and indirect benefits”

Remsol estimated that investment in renewable energy and energy efficiency would result in more than £41,000 for owner occupiers living near shale gas sites over 20 years.

The company said this figure was made up of:

  • £12,000 installation costs per household
  • £13,700 energy savings, assuming a 50% reduction in energy bills
  • £16,000 house price increase, assuming energy improvements resulted in a rise in value of 14%-38%

Lee Petts said:

“Evidence from a study in 2013 shows that homes with better energy efficiency ratings attract higher property valuations, which would hopefully go some way toward allaying fears about potential falls in house prices.”

Advantages

Remsol said people must feel they would benefit directly from community benefit scheme. Distribution of money should be targeted and straightforward and the money should leave a lasting legacy, it said.

The company argued that its proposals would result in:

  • Local jobs for installers
  • Cheaper energy long-term
  • Lower carbon emissions
  • Higher house prices
  • Both owner-occupiers and tenants benefiting from reductions in energy costs

It recommended the government match the contribution from operators to extend scheme to twice as many local homes. It also called for special tax arrangements so that qualifying residents don’t have an additional tax burden.

Link to Remsol report webpage

PDF download: Remsol A Blueprint for Shale Gas Community Benefits

  • Remsol commissioned a public opinion poll about fracking and community benefit schemes from the research company, ComRes. DrillOrDrop will be reporting on this separately

34 replies »

  1. What a load of nonsense. This is not a “report” but publicity hype, sheer propaganda. As though anyone with intelligence believes that double glazing a few houses will stave off climate change.If Petts believes that living next to a fracking site will increase house prices he has a screw loose. No, let him put his money where his mouth is. Let him buy up all the property near Preston New Road and Roseacre Wood (at valuation before the fracking threat) and make his millions that way by selling on when fracking is in full production. As fracking if.

    • I thought this was a brilliant idea. For one I will help renewables that the anti frackers keep banging on about. Second it helps toward low CO2 energy future. Third it help family reduce future energy bill. Go for it. Brilliant.

      • Seems like Mr Petts is unaware of the current and future value of the shale gas industry he is pinning his hopes on. Happy to remind him.

        ‘Shale Wealth Fund’ sounds like an Industry that is going to make money…….I don’t think so. Let’s remind ourselves of what the Industry spokesman told the House of Lords Economic Affairs Committee regarding the cost of shale production.Bearing in mind he was out to convince the Lords how much of a cash cow shale could be his statement is hysterically funny when you look at recent wholesale value of gas and oil.

        “It is very very simple the shale gas Industry in the UK. If we can bring this stuff to market for about $8 a MMBTU it is a very commercially viable Industry. If it is going to take $15 to bring to market it is not viable”

        http://www.parliamentlive.tv/Event/Index/b05e83ee-5d8a-4f48-bc34-8d4b75f6a0db

        So the cheapest they could bring it in is $8 (works out at 61.2p per therm) to make profit ( which concurs other UK sources and US break even averages)

        Recent wholesale price under 40p per therm. Note that the price has been under the 61.2p all of 2015 as well

        http://www.energybrokers.co.uk/gas/historic-price-data-graph.htm

        As Mr Egan stated on Hard talk on 25/01/2016

        ” Forecasting the oil and gas price is a mugs game”

        I think Investors will have serious concerns over the fact that gas prices are 30% less than shale can be produced for. Not knowing what your product can sell for when your’s is the dearest sounds like a ‘ mugs game’ to me.

        Of course you could be in the minority who think oil and gas prices will rocket and that OPEC will give market share back to the US but none of the forecasts or common sense would suggest that is going to happen. Norway are set to lower prices to 20p per therm to insure they do not loose market share to imported LNG, running at 37p per therm.

        The world is awash with cheap oil and gas with everyone rushing to make sure they sell theirs first.

        As Jerome Ferrier (President of the International Gas Union) stated at the World Gas Conference in Paris 2015:

        “The future of gas does not depend on shale gas – there is enough conventional gas to meet demand for more than a century”

        I am putting together a list of people who are happy to invest time and money into non profitable industries. The list keeps growing.

        • John, what a ridiculous argument! A person from industry suggested that if gas could be brought to market at $8 mmbtu it could be very profitable. You take that point and make the enormous leap in logic to suggest “So the cheapest they could bring it in is $8.” But that isn’t what the rep said, is it John? He was speaking hypothetically and never said that the industry couldn’t produce at below $8. Typical anti-factivist junk!

          Why would massive energy companies be buying up onshore licenses and making applications to drill/frack if they didn’t think they could make money doing so? The answer is that they wouldn’t. And they know a heckuva lot more about the cost-economics of shale gas in the UK than you, John.

          Here’s a little brain teaser for you. If they can profitably frack gas in the US, pipe it hundreds of miles to a liquification plant, liquify it, pipe it to a ship, transport it 3,000 miles across the Atlantic, transport it off the ship, and then regasify it and put it into pipe in the UK, then why do you think it will be cost prohibitive to frack gas in the UK and send it directly to pipe? Extraction costs should not be significantly different in the two places once the industry is established in the UK. The LNG and transportation processes add $3.50-$4.20 in costs per mcf (not taking into account the transportation costs within the US). So please explain what it is that all of these oil and gas companies who wish to extract gas onshore in the UK have wrong? What are their economists/geologists/engineers/finance experts missing that John Powney knows about?

          • If you are not convinced by the Industry top spokesman and believe it can be profitable you need to consider what 4 major corporations state is the production costs of UK shale.

            Bloomberg between 47p and 81p
            Oxford Institute of Energy Studies between 49p and 102p
            EY (supporters of shale) between 53p and 79p
            Centrica (backers of Cuadrilla) at least 46p per therm

            http://energydesk.greenpeace.org/2015/08/20/super-low-gas-price-spells-trouble-for-fracking-in-the-uk/

            Now compare against the price you can sell it for

            http://www.energybrokers.co.uk/gas/historic-price-data-graph.htm

            The cost of the landed price (all duties paid) of LNG was 37p per therm in 2015 with Norway set to drop to 20p per therm if their market share is threatened.

            I can supply the addressees of the above corporations / companies / and finance experts if you need to write to them and tell them they don’t know what they are talking about

            Thanks again for giving me the opportunity to remind everyone of the Industry stated facts that prove UK shale gas could only exist as a Ponzi scheme

            • Well, John, I guess that explains why they’ve all pulled up their stakes and left, right? Didn’t every single E&P company return its license to the government as worthless? LOL

              Understand that these are all estimates. Understand that Centrica, like all public companies, is generally going to be predisposed to overestimate its costs. Understand that over time, the costs of fracking will come down considerably, as the services industry becomes established, and as they perfect fracking and completion techniques to the specific geology encountered.

              There’s a reason these companies are paying for the licenses, and it is not to lose money.

    • The UK’s CO2 output is around 150 million tonnes per year. China’s is 9000 million tonnes and the US’s 7000 million tonnes. Forget double glazing, solar panels, energy efficiency and heat pumps, we could literally turn off the entire economy, shut down the whole country, and it wouldn’t change climate change.

      That doesn’t mean we don’t have to do ‘our part’, just that our part is tiny and if the ‘big players’ don’t then Europe doing it won’t change much, even more so in the coming context of the development of the currently developing world.

      I.e., we create around 1.5% of global CO2, equivalent to 5.5 days of global annual output. There are 84 years left until 2100 so 84×5.5=460 days. So if we completely shut down the UK, turn everything off, then climate change happens pretty much exactly the same as if we hadn’t a year and a bit later.

      So nope, double glazing won’t do it. Shutting the whole country down won’t do it.

    • Not sure I follow your logic there, NickP. So are you suggesting that double glazing will promote more GHG emissions? I kinda thought the opposite was true. I also thought that everyone was responsible for trying to help and that a lot of individual actions can add up to make a difference for the global environment. You think that we should discourage energy efficiency by homeowners? You seem to think it’s a poor idea to use shale revenues to help in this effort and that it’s just a publicity stunt, but isn’t making an effort better than not?

      If Petts made a big real estate gamble by buying homes in the area, he might do very well. If you use America as an example, home prices have risen dramatically in some areas where the gas industry has been successful. Homes in the immediate vicinity of wells usually decline in value, so hopefully the government comes up with a plan to offset that loss.

      http://www.usnews.com/news/business/articles/2015-12-28/oil-slump-weighing-on-housing-markets-in-texas-north-dakota

      http://www.gjsentinel.com/news/articles/fracking-has-no-impact-on-home-sales-study-says

    • New study calls John Hobson a “walking contradiction”…..

      “Anti-fracking pro-renewable energy activists are walking contradictions, according to a new study at the National Bureau of Economic Research. Three economists find that natural gas electricity generation complements and enables the deployment of renewable energy generation. To be against fracking is to be against renewable energy.”

      And more….”… the estimated indirect costs of renewables are at least an order of magnitude greater than those associated with dispatchable fossil-fuel technologies. For the latter, system costs are relatively modest, generally estimated below USD 3 per MWh (megawatt-hour) in OECD countries. For the formers, such costs are as high as USD 40 per MWh for onshore wind, USD 45 per MWh for offshore wind and USD 80 per MWh for solar. These high estimates are the direct results of the need for additional system reserves and back-up generation to ensure system reliability. Renewable energy system costs will also increase over-proportionally with the amount of variable electricity in the system, with far-fetching [reaching] implications for the energy markets and security of supply. Ignoring them can thus lead to a severe underestimation of the social and private costs of any energy transition.”

      And the article concludes: “… the study makes the point that evironmental activists had better come to grips with the fact that natural gas is indeed a “bridge fuel” to any renewable energy technology future. In addition, they should recognize that deploying renewable energy technologies will cost a lot more than many of their rosy projections of falling wind and solar power technology prices suggest that it will.”

      You’ll find that article here: http://reason.com/blog/2016/08/12/solar-and-wind-power-wont-work-without-n

      • Most of us have nuanced views on life that can appear contradictory at some level and from certain angles Peeny. I’m strangely untroubled that you seem to think I am a walking contradiction, but that’s maybe because I think you are a walking sockpuppet for an industry that is desperately trying to scream its way out of a corner.

        It is only the self-deceivers, the carpet-baggers and the politicians who pretend life has simple answers. I know which category I think you are in and you are certainly no politician.

        Even Tindale admits shale is no bridge fuel without CCS. You do know that don’t you?

        • I know that you’re losing, John. That’s what I know. I know that the facts are the facts and the facts show that fracking has led to an astonishing energy revolution that has lowered energy prices across the globe while cutting air pollution. The facts also show that fracking can be accomplished safely. As for nuances, I think you are blind to the concept because all you understand is NO. You cannot accept the facts, John. You cannot come to terms with the idea that fracking is helping the planet get rid of coal generation. You cannot come to terms with the fact that natural gas has been shown to be acting as a bridge fuel already, through empirical data, you can just deny. John, you don’t have the ability to understand these facts and come to the nuanced conclusion that fracking for natural gas in the UK can lead to positive outcomes for the country. It isn’t the sole answer, but it can help if it is properly overseen. It is you, sir, who do not understand nuance.

          • Mr Sock Puppet, maybe it would help if you actually read what I write rather than ranting in that unattractive way that you have? Your problem is that for you there is no nuance. The rest of us can weigh up an argument and come to a conclusion, but for you it seems there is only one possibility – that shale gas will make you a load of commission on your Wall Street doings, so you must try to big it up and make out that is has no possible downside.

            If you ever start to admit that it does has negatives then maybe we can start to take you seriously here, rather than just using you as a live example of all that is wrong with those who support fracking at the expense of common sense. Until then my anonymous little pal ….

            • John,
              If you had paid attention, you would have noted that on numerous occasions I have acknowledged the fact that fracking is less than perfect. I have written about the fact that spills occur, that the natural gas extracted emits co2 (though in smaller quantities than coal) and that during operations it can create inconveniences to locals due to the noise and traffic.

              Each and every energy extraction method known to man imposes costs, and fracking is no different.

              So, you are incorrect in asserting that I have never admitted to the downside of natural gas production.

              And now, to bring you back to the real world, here’s a dose of reality……you have never admitted to any advantages of extracting shale gas. And when i’ve proven your cockamamie ideas wrong, you have never admitted such.

              Some more reality, John. I don’t earn commissions as you suggest.

              I’m glad that you identify me as all that is wrong with those who support fracking. I’m glad because my arguments are supported by fact and cold hard data, John. The idea that you find that these facts are “wrong” sums up your viewpoint very well. If the antifactivist hat fits, John, then wear it!

            • “cockamamie ideas” – eugh really? That sound a bit sick but I know you chaps have other similar sounding insults. Maybe it’s normal where you come from?

              “spills occur, the natural gas extracted emits co2 and during operations it can create inconveniences to locals due to the noise and traffic.”

              I don’t recall you ever admitting such things but then I really don’t pay you as much attention as perhaps you believe or would like?

              As to your commissions – all we know about you is that you say you work on Wall Street – maybe you are a janitor not a frack dealer – who could possibly know or care?

              The anti-fracktivist hat fits very well Peeny and I am very proud to wear it, which is why *I* use my real name here. For some reason you don’t / won’t. I do wonder why THAT could be? Come on surprise us with some integrity and courage now – you know you want to! Who are you?

            • I thought you wouldn’t have the integrity or cojones to say who you are Peeny – you just showed me I was right. No surprise there then. Maybe you have an explanation for why you hide your real identity – I’d love to hear it.

  2. We all know that the gas will be used. Either we will import it from Norway and Qatar, or we can use it like this to multiply climate change remediation, alongside the climate footprint reductions of not importing in the first place.

  3. A good idea and some good news is usually enough to get the anti-factivists out in force! Look at them try and rain on Lee Petts parade! As if skimming revenue off the top to promote energy efficiency is a bad idea. At least they are consistent. They just hate the idea of fracking: they don’t know a lot about it, but they hate it all the same. And if you try to tell them that enormous good can come out of it, as has happened in America, this makes them even angrier because they hate fracking and no amount of good that results from the use of the technology will make them change their minds!

    • another good joke Mr Ballpeen from America….I’m holding my sides cos their splitting with your ridiculous comments today….

        • He’s probably just exasperated about the way you demonstrate a complete lack of understanding of the local issues in the UK, yet come around and here, shout and generally behave in a very rude and aggressive fashion. There *is* a stereotype in the UK of the brash American ( I do know many who don’t fit it of course) and you are playing right up to it, so you really shouldn’t be surprised when you get a negative reaction.

          As for Lee’s idea – hilarious stuff – is this the best they’ve got? Let us mess up your countryside for a few billion cubic feet of gas and we’ll put in some double glazing for you? This is like the North West Energy Task Farce at its very best.

          • LOL. How ironic, John! “Let us mess up your countryside for a few billion cubic feet of gas and we’ll put in some double glazing for you?”

            You don’t mention how you’re half-baked plan to meet energy needs would have around 100x the impact on the countryside vs. natural gas extraction, do you? That would be what we term an “inconvenient truth,” right my good friend?

            As for brash Americans – you can name call all that you want if it makes you feel better. I just present the facts, so if that makes me brash, so be it. The antifactivist dialog is obviously in desperate need of my “brashness.”

            First John Hobson proposed an energy strategy that threatens to kill thousands of pensioners. Now he wants to beat up Lee Petts for proposing solutions to help promote energy efficiency and encourage renewables. I think you’ve gone off the deep end, John!

          • John, my ‘deduction’ of Mr Ballpeen being American and my ‘observation’ in the post was based on evidence in their posts….spellings of words e.g. check instead of cheque; the way they refer to ‘Putin’ and ‘Tehran’ amongst others, their ‘brash’ behaviour would be better attributable to their ‘troll’ status. Incidentally, do you know that a ‘Ball-peen’ is a machinist’s hammer used in metal work…maybe a better clue to the identity of this classic ‘troll’?

            The name calling of ‘a run-of-the-mill parochial xenophobe’ is a typical troll reaction. I have to belly laugh at this statement…it cannot be further from the truth 🙂

            I think that the posts need to stay on topic, that way they cannot ‘feed’ off a reaction.

            This site has given the opportunity for genuine posters, including yourself, to add credible information from both sides of the argument so we can investigate and confirm the ‘big picture’. Let’s those who are genuinely concerned about the important issues keep it that way 🙂

      • Rather unnecessary personal comments from hballpeeny – I don’t think the 10,000 plus Pennsylvanians protesting against fracking in Philadelphia a few weeks ago would agree with your idea of good. After living with this industry for a decade opposition grows – if it is so good, why is that?

  4. LOL – you are as bad as that crazy old vicar, Mr Sock Puppet – have you been mainlining his drivel about Aunty Elsie again? I’ve asked you before to support your conclusion that fracking will have any downward impact on supply but you can’t. and you can’t explain why the industry admits this either.

    As to Mr Petts’ solution – why not just cut out the dirty middleman and invest directly in renewables – you need to get with the programme Peeny – your clients will thank you you know, you’ll sleep so much better at night and you you won’t have to hide who you are on comments pages like you do now!

    http://www.telegraph.co.uk/business/2016/08/10/holy-grail-of-energy-policy-in-sight-as-battery-technology-smash/

  5. I’d be very surprised if this ‘idea’ proposed by Remsol is any more Remsol’s idea than the government’s latest ‘idea’ of a bribe. Both sound more like the product of the many expensive PR companies employed by the fracking industry. They’re getting more and more desperate as the public are becoming more aware of the detrimental effects of fracking. It’s an attempt to soft sell fracking in advance of Sajid Javid’s imminent decision on Cuadrilla’s Appeal to frack in Lancashire.

    • Funny you should say that Pauline, when Lee Petts was involved in the now discredited North West Energy Task Farce and is also involved in the amusingly incompetently named Lancashire for Shale (shome mishtake surely?- Ed) which is apparently also linked to the same “guerilla” “sh!t them up” PR Company (Westbourne).

      https://www.linkedin.com/in/leepetts

      Of course I’m sure his company has absolutely nothing to gain from fracking going ahead.

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