The Australian owner of the fracking company, Cuadrilla, has blamed the UK government’s net zero policy for increasing energy prices.
The mining company, AJ Lucas, published a statement to the Australian stock market late last night in which it said:
“the efforts of the UK to rapidly transition from a carbon intensive industry to the use of renewables has had a significant impact on the price of energy commodities and, therefore, electricity.”
The company’s chairman, Andrew Purcell, said:
“The UK Government will need to find a better balance between meeting its stated Net Zero 2050 objectives and the political implications of high electricity prices.
“The current price is unsustainable, particularly for an economy already transitioning away from being part of the EU.”
The statement comes a few hours after Boris Johnson told journalists at the COP26 climate talks in Glasgow that the UK wanted to move beyond oil and gas completely and as soon as possible.
Rising energy prices in the UK this autumn have been ascribed to a number of factors, including strong recovery in demand after Covid-19 lockdowns, tighter than expected supply and a particularly cold winter in Europe in 2020-21.
Electricity prices have risen throughout Europe, not just in the UK.
In September 2021, the executive director of the International Energy Agency, Fatih Birol, said it was “inaccurate and misleading to lay the responsibility at the door of the clean energy transition.”
Mr Purcell repeated the company’s view that gas had a role to play in the transition to a low carbon economy.
He said domestically-sourced gas was preferred to imports from what he called “jurisdictions with significantly lower environmental standards than the UK”.
He also said importing gas with a larger carbon footprint, because of the transport involved, “undermines the credibility of the stated goal of reducing carbon emissions”.
About 44% of UK gas production comes by pipeline from the North Sea and the east Irish Sea. Around 47% is from Europe, mainly Norway, Netherlands, Belgium and Russia, by long-distance pipelines. About 9% is imported as liquid gas, by ship, mainly from Qatar.
Regulators suspended fracking at Cuadrilla’s Preston New Road site in Lancashire on 26 August 2019 after operations caused a 2.9ML tremor. This was the UK’s largest fracking-induced earthquake and was felt across the Fylde region.
Just over two years ago, the UK government introduced a moratorium on fracking across England because of the risk of tremors. The moratorium remains in place.
AJ Lucas said today had expected progress on lifting the moratorium would be slow this year because the UK was hosting the COP26 climate talks.
The company said it had demonstrated that shale gas could be recovered from within its licence areas. It said:
“The moratorium on hydraulic fracturing means we have made no progress in developing the clean and probably abundant gas resource contained within our licence areas at a time when gas has become critical to the debate about the UK’s net zero climate commitments and the cost of achieving those commitments.
“we continue to engage with the regulator … to satisfy their conditions for a lifting of the moratorium on hydraulic fracturing.”