Industry

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.

58 replies »

  1. “He said the UK could be self-sufficient in shale gas ”

    What does that even mean – Is he suggesting replacing 100% of UK natural gas imports for ever?

    UKOOG’s own modelling in 2019 (http://www.ukoog.org.uk/images/ukoog/pdfs/Updated%20shale%20gas%20scenarios%20March%202019%20website.pdf) using Cuadrilla’s decline curve and their rather optimistic EUR assumptions only claimed that 100 x 40 well pads would perhaps get near to covering 100% of imports for a year or so by the mid 30s and then decline very steeply.

    As to UKOOG selling anything, they are a representative group. They won’t ever own any gas to sell will they? How will they guarantee these promises they are making of fixed prices and discounts for locals? Are they promising now that their members are so desperate that, if they can get the government to change their minds, they will allow the government to impose strict terms upon the entire industry forcing them to enter into cheap fixed price contracts to industry and 25% discounts to everyone living above/near the entire Bowland Shale (because it’s probable that all of those people would be living within 10 km of a fracking well if they tried to replace 100% imports!).

    This is truly desperate stuff!

    • Agreed Refracktion, it has long been recognised that fracking, even if viable, could not make the U.K. self sufficient. And it is also acknowledged that it would take years, likely a decade to establish an industry. Easy things for the industry to claim. Cheap words from the trade association of an unproven industry!

  2. Nope, refracktion.

    Your English A level should have noted the “could”.

    To ignore that, and ending up confused, is indeed desperate stuff.

    But, Ineos have offered to demonstrate at their cost the possibilities, so a win/win and you back in employment. Looks an irresistible package.

    • Ah I see Fred. So he doesn’t actually think UK “will” be self-sufficient? Funny that. Neither do I.

      Cuadrilla have already demonstrated what will happen. Weren’t you watching for the last 10 years? No need for Monaco Jim to waste any further cash. We know he likes to save what he can.

  3. Given many ex industry experts say that fracking in the U.K. won’t work, wrong type of shale, complex geology etc, and even if viable it is years away from delivering any meaningful quantities of gas the offers and promises made by a trade association are completely meaningless. Desperation in an attempt to plug the many gaping holes in the fracking case.

  4. Evidently Mackinlay and Baker have been busy!!! Pity they are spreading their Net Zero Scrutiny views in these days of increasing climate disaster. Government should be setting out compulsory solar and other green heating and cooling systems fir house building, that will avoid the release of methane which is very damaging.

  5. Oh, how those who can afford the luxury think those that can’t should be forced into it! Just at the time the many are relying upon help with their energy costs from windfall taxation upon oil and gas.

    If it was not such tragic delusion in the face of costly reality, it might even be humorous. That is the real desperation.

    As for KatT’s ex industry experts, well all industries have them. There is often a reason they are ex. Gaping holes? Hmm, like the sun and the wind are reliable? That one is a whole lot of hole. You could start by fitting around £160B worth of notes into it, and still not touch the sides.

    • Fred – you said above that McAllister’s comments should be read as only hypothetical musings (“could”), yet now here you are, having a whine that people who, quite rightly, question those hypothetical claims are actually stopping people getting the hypothetical help with costs that he dangled hypothetically in front of the committee.

      Come on! You need to at least try to be consistent if you aspire to any credibility on here.

      • Oh, I see. To have credibility I should not know the difference between could and would. Well, reaction, I do know the difference and it made my dating experiences all the better for it. I just trust you never had any cause to be involved in serious contract negotiations-it WOULD have been a disaster, based upon your recent comments.

        Ineos have offered to demonstrate at their cost that fracking can take place in UK. “What will happen”? You must have been to Blackpool and looked at the tea leaves with some old crone! However, remember that Ineos have a track record of demonstrating that they are able to make things work that others have not. You know that, I know that, many others know that, yet you still seem to believe that your credibility will remain denying that?

        Your use of the English language to attempt to distort may be the best way, in your eyes, of making use of your qualifications, but it does still rely upon others not being able to discern what you are attempting. So, I suggest you stick with establishing credibility via that route, although I am not convinced it is a route that leads that way. I am supposed to be uneducated and yet it is pretty obvious to me. Relying upon Emojis can weaken the concept of what words actually mean, but remember not everyone relies upon Emojis.

        Meanwhile, for those who want to look at numbers, and bend them, try bending £2 billion (reported) to patch up Rough to come from the tax payer, to put gas under the ground. Maybe using UK gas already under the ground and do away with the need to spend £2B would be a net saving to the UK tax payer? Maybe UK already has lots of gas storage that someone has offered to get to at their cost, and now offering to supply the product at a discount if they get to it. And, perhaps the £5k best ‘photo money would resurface. No wonder that has caused such a reaction! Almost as good as a scrappage scheme on BMW diesels.

    • Oh Martin, very poor from you. Attempting to discredit recognised, industry experts smacks of lack of legitimate argument. Leading experts, such as Professor Al Fraser, have had exemplary careers, are very well respected and have moved into academia and research. And it is a fact many such experts, like Professor Al Fraser, do not support or have doubts about shale gas in the U.K. And this is because of research that has exposed issues, concerns and constraints, regarding geology, existing surface development, U.K. shale, ability to treat waste water etc.

      If any other unproven industry, years away from production, even if eventually successful, had made these statements of offer at this stage, I suspect most would rightly see them for the completely meaningless and empty gestures they are.

      I’m not even sure what authority a trade body has to make such statements to a formal committee.

      It is not so long ago gas prices were low, are they going to give these reductions to customers if prices drop from the current high and their profits squeezed? Of course not. They are simply exploiting the hardships currently experienced and for which they can offer precisely zero help!

      And as for INEOS’ gesture, that was a PR stunt, to grab the headlines. One site would prove nothing, it does not make an industry. Wasn’t it the former chair of Cuadrilla, Lord Browne, that said around a 100 wells drilled in different areas would be required and it would take around a decade to establish an industry?

      https://www.imperial.ac.uk/people/alastair.fraser

      • Perhaps I should take “experts” who told us it was the right thing to do to buy diesel, KatT? Some obviously did. Then, there were the “experts” who said German diesels were the way to go, and some did.

        Lord Browne? Would he be the “expert” that sold assets he could not make work to Sir Jim who then made them work, and in the process became UK’s richest person?

        Oh dear KatT. Whilst trying to discredit me, you have rather shot yourself in the foot, and made my point for me.

      • Al Fraser is not a leading authority on hydraulic fracturing. It was not his speciality when he worked in BP. The technique that he based his assumptions on is not used by any leading shale gas exploration companies and only a small number of samples were analysed. The only way to tell if a particular shale play will be productive (after the rather obvious disqualifiers such as lack of brittleness, too little TOC, incorrect thermal maturity) is to drill and fracture at least 10 horizontal well. The fact that the Bowland at PNR was significantly overpressured suggests that it is productive.

      • Ahh, Jack is back! Goodness, these comments have certainly ruffled a few feathers, now resorting to, of all things, the Express!!

        Sorry to burst your bubble again Jack but all these nuclear power stations required to back up unreliable wind and sun aren’t exactly going to add to local and not so local property values, and neither have electricity pylons to date, or on shore wind turbines.

        Whoever is supplying your scripts Jack is really not thinking about anyone seriously considering them-just like the Chesapeake Energy one. Maybe they just believe in supplying an open goal, just like KatT. Really desperate stuff, even when multiplied.

          • Speculation from 2015, Jack! The “could” lesson has already been exposed and digested.

            Do keep up. Here’s some “news” for you-Martin could be king, according to Martin. Chesapeake Energy could be one of the prime 2022 investment targets in USA according to experts over there.

            I prefer my “experts” to be someone like the past Chief Scientific Adviser, Professor Sir David McKay who told the same Guardian, in 2016:

            “There is this appalling delusion that people have that we can take this thing (renewables) and we can just scale it up and if there is a slight issue of it not adding up, then we can just do energy efficiency. Humanity really does need to pay attention to arithmetic and the laws of physics.”

            Like Warren Buffett predicted a problem with inflation and was quickly denounced by some “experts” who now look stupid, including the Fed. The Profs. comments have been equally denounced and also that denouncement now looks stupid, and arithmetic like £160B missed out of the original equation just goes to show how accurate his comments were shortly before his death. And, those left still trotting out the same lines just claim higher intelligence, even though their ability to grasp arithmetic and physics is so obviously lacking, and facts are such a mystery they can not even define correctly what the meaning of “fact” is!

            But then, I chose my experts based upon what becomes obvious in the real world, not those who just plonk out stuff that suits a dogma.

            • MARTIN ,

              So it’s all speculation is it ??????

              So this is YOUR ” OPINION ” on the matter is it ???????? Just your OPINION backed up with the usual SWEET NOTHING.

              HA HA , I’m sure that will be of great comfort to homeowners living with their families within the 10km fracking zone , whose house values , health and environment are all going to be decemated by this toxic industry.

              • Quite straight forward Jack. Could is a maybe-so yes, it is speculation. You do well with your second language but every now and again run into the same problem. Do you not read what you post? 2 coulds. So, it is someone’s opinion you are posting, and then you morph onto “are all going to be decimated.” 2 coulds do not make an are!

                Nice try Jack, but speculation does not mean it will happen, hence the use of “could”. So, arithmetic, physics, and English just all part of the reality that has to be dumped to make your argument. Looks as if the Prof. was underestimating, not exaggerating.

                Not my job to do the education, others have offered, but try thinking about my team could win the Premiership. Sorry, but I fear they will not decimate the others. I should be careful about suggesting decimation. A quaint old tradition of getting rid of one in ten to encourage the others within a Roman Legion when performance had been shocking. Jack you could revive the practice, your fellows seem quite keen to attack each other. That would be a shame as your posts are quite diverting-from the reality.

                • No, I do not have to listen. I know cobalt is a carcinogen and your brave new world has kids in the DRC using their bare hands to grub it out of the earth.

                  Then “we” have new nuclear to make the unreliable reliable.

                  You have tried the same thing multiple times Jack., yet you must have heard of Chernobyl. It really is pretty desperate, incoherent and adrift from reality.

                • MARTIN ,

                  So let’s get his clear , as this is important….. For the benefit of the forum members that are reading this .

                  For the record, I’ve seen you use this approach many times before when trying to push for UK Fracking.

                  When I show you indisputable evidence that warn of the dangers of Fracking , YOU always bang on about the children working in the DRC, Democratic Republic of Congo mining rare earth minerals for the Green Industry.

                  In taking this approach , it’s clear to all concerned that your ” priorities ,” and ” concerns ” are NOT for the UK public.

                  Your concerns clearly lie with people living outside of the UK .

                  It’s important that UK forum members take note of this when reading your ” OPINIONS ” that are always backed up with zero evidence.

                • [Edited by moderator]

                  More desperation does not produce more clarity, Jack, just the opposite.

                • NO, NO , NO MARTIN ,

                  I’m not letting you off the hook with this one , I repeat ,

                  ” For the record, I’ve seen you use this approach many times before when trying to push for UK Fracking.

                  When I show you indisputable evidence that warn of the dangers of Fracking , YOU always bang on about the children working in the DRC, Democratic Republic of Congo mining rare earth minerals for the Green Industry.

                  In taking this approach , it’s clear to all concerned that your ” priorities ,” and ” concerns ” are NOT for the UK public. ”

                  Your concerns clearly lie with people living OUTSIDE of the UK .

                  Why is that MARTIN ???????

                  What about the children that ” experts ” clearly warn, will be effected by UK Fracking ???????

                  Are they of NO concern to you??????

                • MARTIN ,

                  Fracking Dangers

                  Are these ” expert ” enough for YOU ???????

                  From the British Medical Journal ( BMJ )

                  NONE of these think Fracking is safe , why should we ??????

                  https://www.bmj.com/content/348/bmj.g2728/rr

                  Dr Robin Stott, Co-Chair, Climate and Health Council
                  Professor Sue Atkinson CBE, Co-Chair, Climate and Health Counci
                  Professor Hugh Montgomery, UCL
                  Professor Maya Rao OBE
                  Professor Martin McKee, LSHTM
                  Dr Clare Gerada, GP and former Chair of RGCP
                  Dr Christopher Birt, University of Liverpool and Christie Hospital, Manchester
                  Professor John Yudkin, Emeritus Professor of Medicine, UCL
                  Dr Sheila Adam, former Deputy Chief Medical Officer
                  Professor Klim McPherson, Chair of the UK Health Forum
                  Dr John Middleton, Vice President UKFPH
                  Professor Alan Maryon-Davis, KCL
                  Helen Gordon, Board Member, Climate and Health Council
                  Dr Frank Boulton, Medact and Southampton University
                  Dr Sarah Walpole, Academic Clinical Fellow
                  Professor Allyson Pollock, QMUL
                  Dr Julie Hotchkiss, Acting Director of Public Health at City of a York Council
                  Professor Jennie Popay, Lancaster University

  6. Meanwhile (2) for those who wish to observe more reality, and how Ineos seem to know what that is, see the Telegraph.

    Ineos Energy sign agreement with Sempra Infrastructure of California to bring 1.4m tonnes/year of LNG from USA to Europe for the company and customers.

    Good job those who know what they are doing, do it, allowing the luxury of others not to do anything-according to Jono-to merely whinge about it.

    • Yes you’ve been doing a lot of whingeing here Fred, but not contributing much in the way of cogent argument.

      It’s not the quantity of words that counts you know!

      • Ahh, the denial approach then attempted. Remember what happens to those birds with their heads in the sand.

        Cogent argument? Well, reality shown by a recent contract seems cogent to me. But, my head is out of the sand.

        • It’s a bit rich when Martin starts accusing interlocutors of denialism, he who has still not accepted the predominantly anthropogenic nature of the climate change we are all experiencing.

          • It’s a bit rich that some display their poor memories on this site. And that is the polite way of framing it. I could suggest get your facts correct, but I recall that has it’s problem for you.

            What I have explained to you, and others, many times 1720, is that I do not accept many of the solutions offered, although you have not gone much beyond offering “something must be done”. Then, when something can be done, like cutting transport emissions you are the one who doesn’t want HS2 and doesn’t want to reduce other transport emissions. So, please forgive me, but I fear that if you ever propose any solutions to climate change I shall be inclined to scrutinize with a low level of expectation.

            The one where “we” take life expectancy increase around the world since the development of fossil fuel and chuck that away, thus perhaps reducing population growth pressure upon climate change, seems a something that must be done that I could not support. Perhaps you wish to deny Afghanistan more helicopters to rescue people from the earthquakes?
            Uncontrolled pandemics may be another means of achieving the something must be done, but again not my choice. Current economic circumstances around the world show clearly that something must be done does need to create more benefit than disadvantage. OMG-that something seems to be make sure there are secure supplies of fossil fuel. Yet still lots of denialism around that, which now looks rather silly as the reality becomes obvious. Looks like the South Sea Bubble 1720, all over again. How apt and how ironic.

            • And in all the irrelevant waffle, back to the question – do you accept the predominantly anthropogenic nature of climate change, or do you deny this? Simple question. Just forget the answer you think you may have given in the past and provide it for once clearly. Your replies to questions increasingly resemble those of Johnson – perhaps you are mentoring him.

              • For goodness sake, 1720, do not waste my time.

                That is a playground technique. If you really have to have everything repeated then do the work yourself and review my texts. What a silly, lazy attempt to cover your incorrect statement.

                “Pay attention, boy” would have been part of my education.

                • ‘Tis you wasting the time of us all, Martin. Interested in the questions underlying most posts on DorD, I read most of yours until I get too bored or too utterly confused by irrelevance, spurious arithmetic or mangled English, but I really don’t recall your doing anything other than avoiding answering this question.If I am wasting your time then I suggest that I am doing the world a favour.
                  It really would be helpful to know whether those who post are addressing a denier.

                • [Edited by moderator]

                  Others should be able to read what I have posted, repeatedly.

                  [Edited by moderator]

          • [Edited by moderator]

            Back to reality, it takes 30 years or so to develop a nuclear power station. UK should have started the current requirement a long while ago, but will soon start them. So, fracking absolutely no different, except a much shorter time lag. There are two differences though. The companies offering to do the fracking are offering to do so without the tax payer funding, and the price of the energy to the consumer COULD be a lot cheaper.

            Gas prices are high because gas is the world’s transition fuel. That is not going to stop anytime soon.

            • Only two differences, then, between fracking and nuclear?
              Dear me, some of us have a little work to do. I’m afraid I don’t have the time or inclination to start from the beginning with you, Martin, but if you review scores of postings over the last few years, you’ll find all you need. I suggest you stop posting until your reading is complete.
              What a pity that we didn’t support renewables at the right time to the required extent rather than subsidising gas and other fossil fuels! This is of course down to the deniers and the FF industry they support.

              • Where is the only in my post, 1720??

                OMG, you do share the problem of attempting to change others posts in order to make a point. [Edited by moderator]

                “What a pity”? That would have made the unreliable, reliable? Nope, just more that was unreliable.

                [Edited by moderator]

                • And still we do not know! Will we ever? Or will we always be told we know because you have told us.
                  Well, when Johnson tries this, and he, like you, frequently does, we know what credence to accord.

                  Let’s try a new tack – you are, I submit, a denier of the accepted and scientifically demonstrated truth of the proposition that climate change as we are experiencing it is predominantly anthropogenic. J’accuse! Defend yourself if you wish: it’s your right.

                  You adduce only two differences between A and B to make your pro-fracking point.A reasonable person might assume that these were the salient points for you. Even if you don’t say ‘only’.

                  [Edited by moderator]

              • Fred – it seems your accusations keep getting edited by the moderator, but I really would like you to explain what you think I misquoted. (if you have anything to back up your ramblings that is). You don’t seem keen to reply though. I’ve asked you three times now and nothing, nada, zilch which is funny because the quantity (if not the quality) of your output elsewhere seems to be off the scale

  7. I think the most interesting thing about this report is how little attention it got in the mainstream media, after all he is suggesting a possible solution to the Heat or Eat crisis. Also how much the European gas crisis generally seems to have passed under the headlines. It’s possible I’m just being paranoid but I do wonder how much external nefarious influence there is from Russia or the Middle East on British coverage.

  8. For those less conversant with concerns about Russia, Rasmussen was a past Secretary General of NATO who expressed his concerns many years ago about possible Russian influence in the European debate about energy policy. Just a thought but as chief of NATO he might have had some inside knowledge. Who knows, but if I’m paranoid I’m in good company. By the way, do you work for RT?

    Reading today, I might be wrong about these issues not cutting through……report in the Telegraph that government modelling predicts 6 MILLION people could face blackouts this winter in the U.K. if Russia cuts of gas to Europe. Not funny.

  9. Kat T, anyone who manages an”independent, in depth, investigation” of Russian foreign policy is doing very well indeed. We’ll probably never know. I would suggest however that the Salisbury poisonings and the invasion of Ukraine suggests what they are capable of.

    Just a point about the “several years” for fracking to develop. A story I have repeated here a couple of times…..during the 2ndWW, at another time of fossil fuel emergency, we managed to drill 100 oil wells in the Gainsborough area within one year with American help. Just shows what’s possible.

    • So drilling 100 wells in a year is a magnificent achievement!

      Better not let on that the UKOOG modelling in which fracking never gets to equate to forecast imports is based on 400 laterals a year being drilled at peak without any help from the Americans.

      And after 6 year they’d only have managed to extract 1 tcf of gas (about 4 months UK demand). UKOOG’s own models suggests that it would take 8 years to drill all the wells on a 40 well pad (Page 11) , so even if they started one today it would be being worked on until 2030.

      So of COURSE it would take “several years” for fracking to develop.

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