Shale gas is an energy security issue – climate change minister


The climate change minister, Nick Hurd, said the UK owed it to future generations to find out whether it could produce shale gas.

Speaking this morning to the Business, Energy and Industrial Strategy Select Committee, he said:

“We’ve seen the impact in the US. I think we owe it to ourselves to find out whether something similar can happen in the UK.”

The Labour MP, Albert Owen, asked him how unabated shale gas fitted with emissions reductions.

Mr Hurd replied:

“I look at shale gas through the lens of energy security.

“It is primarily an energy security issue for me. We import a lot of gas. If we have the capacity to generate our own gas in this country and we can do it while reassuring people about the impact on the environment, personally, I think it would be irresponsible to future generations not to answer the question can we do it.”

Carbon capture and storage

nick-hurd-170110-2Mr Hurd said he expected to include proposals for developing carbon capture and storage in the Carbon Emissions Reduction Plan within the next three months. He said “there will be a plan and a direction of travel”.

The former chancellor, George Osborne, cancelled a £1bn pilot project for CCS in November 2015.

Pressed by Labour’s Anna Turley, to make a commitment to CCS, Mr Hurd said:

“I know from the cancellation of the competition that we may have given the impression that we’re not interested in CCS. That’s not true at all.

“What we’re interested in is finding a smarter path forward to see whether we can reduce the cost of it. It is too high. And give ourselves some intelligent optionality on it in the future.”

He said CCS would be important in the future for reducing emissions from electricity generation and industry. But he backed Mr Osborne’s decision:

“I think it was right to cancel the competition. The advice I’ve received is probably it was the right decision. It wasn’t set up in the right way. We’ve now got to find a smart path forward and we’ve got to engage with industry to get their buy-in and we’ve got to engage with places.”

Mr Hurd said there were places that were very keen to develop CCS and this could play a very important in their future.

albert-owenBut Mr Owen countered:

“I find that extraordinary what you’ve just said: ‘you’re looking for places, you’re looking for business’.

“That was all set up before. It was finance that was lacking and government commitment taken away. There was Peterhead and many other locations that were agreed on. It was policy that changed.”

Mr Hurd replied:

“In a very challenging fiscal environment the decision was taken that that was not value for money as an exercise.

“There are parts of the country that want this and want to develop it and so part of our process going forward is to try and work closely with those areas and with industry.”

37 replies »

  1. You just have to marvel, that with the current sorry situation in N.Ireland, we still have politicians suggesting that huge sums of tax payers money should be thrown at an issue, with untried and untested technology, just because the issue is linked to climate change!
    Some couldn’t run a bath!

    Before there is a queue to knock me down, I do like the idea of carbon capture. When someone shows me that it is practical and economic I might even become over-joyed!

    Seems to be another “cargo drones over Aleppo” fantasy at the moment. Lots of compassion, absolutely no practicality.

    • Martin, I certainly agree with much of the sentiment you have expressed, but I think that the government does have a role, in any nation, encouraging the development of smart technologies to solve for problems such as this one. That encouragement doesn’t have to be very large, as we are not talking about scaling out these solutions – just proving them. Where I take issue is when the government spends vast amounts of capital to promote technologies which are not proven, where the consequences of the government’s spending are uncertain, and where markets are perverted as a result. We all have our favorite examples of this, but I look at Germany and all of their spending on renewables, and the lack of progress on GHG emission reductions and their sky high electricity prices as a good example. Greens like to offer Germany as an incredible success story, because the country produces a lot of low-carbon energy, but the cost has been very high in terms of increased carbon emissions and a giant tax on energy bills. If it weren’t for the effective subsidy of an artificially deflated currency, Germany would have had to give up on its Green dreams long ago.

      • On and on and on, never mind, you asked me who has priority right on a UK road, pedestrian or car, i told you its the pedestrian and it is true and i gave you proof.

        In UK pedestrians have priority right of way on a road, that’s it, any other connotations are another matter,

        You asked me if fracking operators are offshore companies and hide their tax in tax havens, i told you and gave you proof, and it is true,

        Changing the subject to protest rights and restrictions wont change the fact pennywise, but it made you look didnt it? So easy.

        • But you are incorrect, Phil. I didn’t ask you who had priority right on a UK road. I asked you if the rights of anti-frackers should supercede those of the public or Cuadrilla employees in general. According to the Highway act, passage on the highway shall not be willfully obstructed. I also cited Article 11 and the right to protest which specifically references that freedom of protest may be limited if it infringes on the rights and freedoms of others, as is clearly the case in this instance.

          “You asked me if fracking operators are offshore companies and hide their tax in tax havens, i told you and gave you proof, and it is true”

          [Edited by moderator] You have not provided any proof that Cuadrilla is an offshore company. Nor have you provided proof that it is able to avoid taxes. Cuadrilla is based in Lancashire, and is responsible to pay UK taxes.

          • In UK pedestrians have right of way above vehicles, you asked me to give you the law on that and i did, why the diversion into protesting?
            You may think you asked me something else, that is your opinion.
            i have never mentioned Cuadrilla pennywise, you have diverted the subject yet again.do try to keep on subject, i am not sure the word you use is acceptable either.

          • As of 31st December 2009, a Bermuda company, Cuadrilla Resources Corporation Ltd (CRC) was the parent company for all Cuadrilla’s subsiduaries. The controlling party was then AJ Lucas Group Ltd (Australia) – the initial investors.

            On 15 February 2010 another company, Cuadrilla Resource Holdings Ltd (CRH), took over CRC and became the main parent of the group. AJ Lucas had evidently doing some fundraising: they enticed a second investor, Riverstone/ Carlyle Global Energy and Power Fund IV, to join them in owning Cuadrilla’s activities.

            Riverstone/ Carlyle Global Energy and Power Fund IV bought 40.9% of the shares for $37,075,000, valuing the company at around $90m. Lucas Caudrilla PTY Ltd retained 40.9% and the management team also got 18.2% of the share capital.

            15th February 2010 was a signature moment for the company. At this point most of the current directors also joined CRH’s board. Riverstone/ Carlyle evidently brought with them some major oil and gas firepower – 8 of the twelve then directors joined at this point.

            Because the company was Bermuda based it’s difficult to ascertain what went on before 15th Feb 2010. However there are some interesting anomalies: one Hubert Ashton was appointed ten days before this date, and resigned on the 15th. Gregory Beard joined the board on the 15th, and then resigned on the 12th May, to be replaced by N John Lancaster Jr. Meanwhile Chris Cornelius resigned on the 8th November, to be replaced by the current head of UK operations, Mark Miller. Riverstone/ Carlyle’s new board, it seems, was exerting its will.

          • Companies owend by Cuadrilla Resource Holdings

            Cuadrilla Resources Ltd – Management services to subsiduaries
            Caudrilla Well Services Ltd – Services for oil and gas exploration
            Elswick Resources Ltd – Electricity production
            Bowland Resources Ltd – Oil and gas exploration
            Bolney Resources Ltd – Oil and gas exploration
            Tanglewood Resources Ltd – Oil and gas exploration
            Susquehanna Natural Resources Co – Oil and gas exploration
            Caudrilla Hungary Ltd (UK) – Investment holding
            Caudrillco Ltd (UK) – Not trading
            Hardenburg Resources BV (Netherlands) – Oil and gas exploration
            Brabant Resrouces BV (Netherlands) – Oil and gas exploration
            Hardenburg Rsources BV (Germany) – Oil and gas exploration
            Cuadrilla Austria GmbH (Austria) – Oil and gas exploration
            Caudrilla Poland SpZo o (Poland) – Oil and gas exploration
            Caudrilla Resources Iberia SL (Spain) – Oil and gas exploration
            Cuadrilla Morova SRO (Czech Republic) – Oil and gas exploration

          • http://www.david-leuschen.com/riverstone-and-aj-lucas-announce-investment-in-cuadrilla-resources/

            Seems A J Lucas now have a major holding, as do Riverstone

            Aj Lucas Group
            Stock price: AJL (ASX) A$0.40 -0.01 (-2.44%)
            11 Jan, 14:10 GMT+11 – Disclaimer
            Headquarters: New South Wales, Australia

            Riverstone Holdings is a private equity firm based in New York City, established in 2000, focused on leveraged buyout and growth capital investments in the Energy industry and Electrical power industry sectors. The firm focuses on oil and gas exploration, midstream pipeline, electric generation, energy and power services as well as energy and power technology and also invests in renewable energy infrastructure and technology.

            • Have you heard of creative accountancy pennywise? It is easy enough to employ the parent company to run their accounting, then money is moved backwards and forwards to, apparently, Bermuda, then follows an untraceable series of take overs, bankruptcies and new companies with apparently no responsibility for the tax responsibilities of the original, all out of reach of the Inland Revenue, like every other company with holdings in offshore tax havens does.




            • And, Aj Lucas Group, Headquarters: New South Wales, Australia. Riverstone Holdings New York City USA, both company parent groups are overseas, both foriegn parent groups,
              Only Cuadrilla Resources is based in UK, and declares: The company is privately owned by its management team and two investors, AJ Lucas and Riverstone LLC. The company is registered in the UK.
              Cuadrilla Resource Holdings: Cuadrilla is a privately owned company with headquarters in the United Kingdom. The company was founded in 2007, financed with investment from the Australian engineering company A.J. Lucas and the Anglo-American equity firm Riverstone Holdings. As of March 2016 it is owned 45% by AJ Lucas, and equally by Riverstone LLC, while Cuadrilla management owns the remaining 10%. In 2009, Riverstone had settled corruption charges in New York through its partner The Carlyle Group.
              Its chairman is Lord Browne, former chief of BP and President of The Royal Academy of Engineering from 2006−2011. The chief executive is Francis Egan. Cuadrilla is Spanish for group or party.

  2. Perhaps an alternative headline for this piece might be “GOVERNMENT U-TURN ON CARBON CAPTURE AND STORAGE”. Feels like potentially good news to me.

  3. The Climate Change Minister that clearly doesn’t understand climate change. We owe it to future generations to keep all new reserves of fossil fuels in the ground.

  4. A somewhat myopic view through a single lens of energy security and a brief nod towards carbon capture, barely a commitment? All that environmental destruction and destroyed communities? Where will we be the? Back to square -1 without having any security whatsoever, just broken lives and destroyed health and environment. Way to go! The answer has never been to frack the hell out of the entire country, the answer has been staring us in the face for 100 years. Use the potential difference in electical charge between the air and the ground. Simples, no wind, no sunlight, no fossil fuel required. Continuous and free once the towers have been built, one for each town and village and maybe a dozen for cities. Job done. Permanent Energy Security, not short term expediency wasted on a non sustainable dangerous practice which will deplete resources in a few years and reduce gas revenue further in a glut.
    Why don’t we do such an intelligent thing?
    Guess? I’ll give you a clue, begins with “m’.

  5. I bet he has no idea that we export huge amounts of indigenous North sea gas every day.

    If we don’t export it we won’t have to import it.

    Hello Nick……..Anyone there?

    • Utter nonsense. We only export gas because Norway needs to get it to the continent. We only produce about a third of our needs. You’re not Shadow Minister Gardiner in disguise are you?

  6. Nick Hurd tripped with the first statement: “the UK owed it to future generations to find out whether it could produce shale gas” – Shale gas extraction would last less than a generation. What future generations would then have to solve is the legacy issues of a useless decaying infrastructure and a new way of generating power.

    • Well, Phil, not according to the CEO of shale gas firm, Cuadrilla. According to a statement he made, he thinks that resource could meet all of the UK’s needs for 80 years, if 10% were recovered. They won’t push development that hard, so it is likely that the 10% could provide gas for 100-200 years, depending on how it is used. Perhaps you know more about the prospective recoverability of shale gas the Mr. Egan?

      • History will prove you wrong. And the UK simply does not have the wide open spaces of the USA to expand gas fields into. Also, ‘potential’ is not the same as recoverable. Potential is in inevitably a hyped up figure in any commercial prospectus.

        • You do realize, of course, that we have been fracking in some of the most densely populated parts of the US (such as Los Angeles) for years, right? Much more densely populated than the north of England.

          As for recoverability, we won’t know until we know. It may be that 10% is much too low. He used that figure because it was fairly conservative. What we do know is that no one thought there was much potential in the US 40-50 years ago.

          • Overlooking the fact of course that Los Angeles grew up with the automobile (generous sized roads etc) and with Oil rigs and pipelines in its midst. Do visit the north of England some time and see if you can find a single similarity.

            • How are you working out the boundary? It almost reaches San Diego these days doesn’t it? Transpose the area onto the North of England and I wonder what populations you would net. I’ll let you figure that out. Just don’t imagine the N of E is like some wilderness / prairie.

          • Of which fracking in the form we’re talking of here has been around for 10 years or less … 40 years to go.

            • Incorrect, Phil. As I have shown you in the past, even when you try to categorize fracking in ways that are irrelevant to the prospect for damages. High volume, slickwater fracking started in the late 1980’s. Do the math.

      • I would not believe everything a CEO has to say when he hasn’t even fracked yet, he is hardly likely to down sell his company! And it may be a recurring echo but the reality is if we hope to avoid destroying the planet through climate change, we cannot afford to burn new reserves of gas and need to be moving away from fossil fuels asap. So it is a rather meaningless argument over how many decades or centuries of gas Cuadrilla may have. They should not be allowed to burn it.

        • But he has fracked. And he has well logs. And he has core samples. And he has flow rates. He should be better positioned than anyone in the UK to understand the potential for shale gas.

          You must be aware that a majority of the UK’s energy needs are met by natural gas. Gas will continue to be used for decades to come. The only question is how much of that gas will be imported, causing greater environmental damage than domestic gas, and how much lost tax revenue and wealth and energy security will be shipped overseas.

          • I agree. Before heading, Francis Egan quit as head of uk oil and gas production for Caudrilla. Now that is a big career call because shale is a risky business and he know it as the head of uk operation man for BHP. He dont do it unless he has seen good evidence from Caudrilla before accepting the post. And Caudrilla and Centrica dont throw away 15 millions a years over the last 5 years waiting just on hunch and hope. Like you said they have log sample core sample from 3 wells and partially fracked flow rate from Preesehall well and they are interested.

  7. “We’ve seen the impact in the US. I think we owe it to ourselves to find out whether something similar can happen in the UK.” Yes, we have seen the impact in the US. Water and Air pollution, impacts on health and massive rise in seismic activity. I disagree completely, we owe it to ourselves to never find out if something similar can happen in the UK.

    • Agreed. Learn from others experiences. It’ called wisdom. Or, if still in doubt send a team of scientists and engineers to the USA to investigate the reality there. Germany did just that and have now decided to ban fracking. The risks are not worth it.

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