UK fracking industry offers fixed gas price “to cut bills”

The organisation representing the UK shale industry has offered to fix gas prices to industry, transport and homes.

Charles McAllister, of UKOOG, speaking to the Environmental Audit Committee, 22 June 2022.
Photo: Parliament TV

Charles McAllister, of UK Onshore Oil & Gas (UKOOG), told a committee of MPs this afternoon this was a “plausible way” to cut bills.

He said:

“I have already got my board to agree that they will be more than willing to sell gas, especially to large industrial users, at fixed contracted prices.”

Mr McAllister was responding to comments by members of the Environmental Audit Committee that a revived shale gas industry onshore in the UK would not cut bills because gas prices were set internationally.

He said the Bowland shale was “literally underneath” industrial areas on the east coast and in the north west that had received government funding to develop carbon capture and storage.

He said:

“So we’ll be more than willing to fix the price into those facilities, that give a guaranteed price to those facilities and to the downstream users, be that other heavy industry, homes, transport, etc. That’s a plausible way of getting bills down.”

Mr McAllister, UKOOG’s director of policy, government and public affairs, also offered a 25% cut in gas bills to people living 5-10km from a shale gas well.

He said the UK could be self-sufficient in shale gas using 0.003% of the land area. He said a greater self-sufficiency in gas would also help to cut prices.

Currently, he said, the UK had to offer a high price for imported gas to attract liquified natural gas tankers.

“If you are more self-sufficient, you have to do that less. That will have a depressive impact on price.”

Mr McAllister called on ministers to lift the moratorium on fracking in England, in place since November 2019, and “facilitate shale gas development”.

A review of the science of fracking, commissioned by the business secretary, Kwasi Kwarteng, is due to be completed by the end of this month (June 2022).

Without a lifting of the moratorium, |Mr McAllister said,  the onshore shale gas industry was unable to take advantage of tax relief on investment in new production.

The shale gas industry should also be defined as nationally-significant infrastructure (NSIP), Mr McAllister said, to “provide consistency in the planning system”.

This would take decisions away from local authorities and give them to planning inspectors and ministers. In November 2019, the government dropped proposals to define major fracking schemes as NSIPs.

Mr McAllister criticised the recent government refusal of planning permission for shale gas sites at Woodsetts and Ellesmere Port . The decisions had been made for “really spurious reasons”, he said. “We are seeking clarity on that”, he added.

The committee also heard evidence from Dale Vince, the founder of the renewable energy company, Ecotricity.

Mr Vince called for a presumption in favour of renewable energy when decisions were made on planning permission.

He said onshore wind and solar schemes were the fastest, cheapest and cleanest way generate electricity. He also called for fossil fuel gas to be replaced in the grid by gas made from grass.

59 replies »

  1. It would take several years to develop UK fracking-to full scale. It would take less to develop.

    It takes about 30 years to complete a nuclear power station and probably about the same time to rejig the whole of the electrical distribution infrastructure in UK. Probably the same sort of time to get EVs fully operational. Better not start then? After all, energy security can be predicted so easily for the next 30 years!

    Development of fracking in UK, if successful, looks very much a sprint in comparison. Now, in USA there seems to be a large growth in re-fracs, so once the well has been drilled, and more new wells are being organised, back for a “booster”. Cheapens the whole process, makes better use of the existing infrastructure, workforce, and increases output. There the “battle” is between Biden, calling for PROFITS from the fracking companies to be invested to boost output, and the shareholders wanting profits distributed to them to make up for the pandemic period.
    Anyone would start to think that perhaps reality has a habit of showing what works and what is required. Output of fracking is required in UK.

    The only question is whether it is imported or home produced.

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