climate

UK shale gas won’t help energy prices – advisors tell PM

Government advisors have told the new prime minister the UK can’t rely on shale gas to solve the cost-of-living crisis.

Cuadrilla’s Preston New Road fracking site. Photo: Cuadrilla Resources

In a letter to Liz Truss, published today, the Climate Change Committee and the National Infrastructure Commission said:

“The UK cannot address this crisis solely by increasing its production of natural gas.

“Greater domestic production of fossil fuels may improve energy security, particularly this winter. But our gas reserves – offshore or from shale – are too small to impact meaningfully the prices faced by UK consumers.”

The organisations called for policies to reduce wasted energy and to boost cheap, secure low carbon production in the UK.

The letter, signed by the CCC’s chair, Lord Deben, and Sir John Armitt, chair of the NIC, said:

“Energy security and reducing the UK’s exposure to volatile fossil fuel prices requires strong policies that reduce energy waste across the economy and boost domestic production of cheap and secure low carbon energy.”

They recommended the government should:

  • Invest now in energy efficiency in buildings to reduce wasted energy
  • Provide and promote a comprehensive energy advice service
  • Deliver a working market-based mechanism for low-carbon heat
  • Make full use of new auctions for onshore wind and solar
  • Deliver updated national policy statements for energy and resolve barriers to deployment of strategic energy infrastructure

They said:

“There is an opportunity in the coming months to deliver policies which will drive a recovery that secures a long-term advantage for the UK. By doubling down on efforts to end our dependence on gas we can lower consumer energy costs and make meaningful contributions towards combatting climate change.”

The entrance to Cuadrilla’s Preston New Road shale gas site, 5 September 2022.

Media reports have suggested that perhaps as early as this week Liz Truss’s administration will lift the moratorium on fracking.

This has been in place since November 2019 after fracking induced earthquakes at Cuadrilla’s Preston New Road site.

There have also been repeated calls from the shale gas industry for a relaxation of the seismicity rules on fracking and removal of shale gas planning applications from local authority control.

Critics of shale gas have argued that production will not get underway quickly enough to help soaring bills this winter, or even next. There are no active shale gas sites in the UK and no current planning permissions for fracking.

The new prime minister has said there should be a “clear public consensus” behind shale gas. But there is currently no indication of how this would be measured.

30 replies »

  1. Publication of the July BGS report on fracking.etc., might be instructive and might provide Truss and Rees-Mogg with the opportunity at least to be seen to aim at integrity.

    • The government are now saying the BGS Report will be published after the mourning period for the Queen. Why the death of the Queen is relevant to simply publishing a report is unclear when they have already decided to renege on the manifesto the Tory government were elected on in 2019 and lift the moratorium on fracking, but no doubt it will give them more time to carry out the heavy redaction that usually accompanies such reports, ‘for commercial reasons,’

  2. Hahaha… Lord Deben??
    He does realise due to the UK’s dash for renewables which currently do not make profit, and are hugely government subsidised. The UK cannot afford Net Zero, it is unsustainable…

    In an economic report focusing on UK energy security, the organisation said there were energy reserves equivalent to 15billion barrels of oil – enough to fuel the UK for 30 years.

    But it warned that without “rapid new investment”, the UK would have to import about 80% of its gas and 70% of its oil by 2030. OEUK’s economic report estimates that the annual industry and consumer spend on energy will triple if the current planned October price cap increase goes ahead.

      • Renewables are currently something like nine times cheaper than gas but because electricity prices are pegged to gas prices the savings are not being passed on properly to consumers. Once the markets are corrected, which I believe is the intention, consumers will soon see exactly why their bills are so high, all down to high gas prices. Not renewables and not green levies as falsely claimed by some.

        • katT: That is a typical Greeny statement! Renewables are not cheaper, we outsource all UK renewable materials and engineering. Gas is the only savoir here and Renewables produce electricity, You cannot use electricity for everything we consume in a day! Gas is more versatile and easily stored, Renewable are not!

          • Eli – Goth, stop trying to label me, it really is immature.
            It is not a greeny statement, whatever that means, it is fact – renewables are currently nine times cheaper than gas and once the price is decoupled from gas, the public will see exactly what is causing the high bills – gas!
            And renewables already employ a significant number of people in the U.K. (207,000 FTE in 2020) the Siemens factory in Hull as an example and renewables have helped provide employment in economically disadvantaged coastal towns.
            Gas is not the saviour, it is fleecing consumers and destroying the climate. And given we have so little U.K. gas left now with the NS, largely depleted, it cannot make the U.K. energy self sufficient, at best it can reduce imports. But guess what, that is exactly what renewables do but quicker and cheaper. I suggest you read the studies and modelling done by the Grid to see how it will comfortably work with all renewable/nuclear energy. Cars with petrol and Diesel engines to be phased out in a few years, gas use set to fall considerably by 2030, our reliance on gas is diminishing. I am sure after this crisis consumers will see heat pumps, solar panels and home insulation as far more attractive than a new gas boiler. I wouldn’t rest on your laurels. No one is saying gas can be phased out in a day but there is global commitment to achieving net zero and for many this gas crisis has focussed minds and will ultimately speed up the transition away from gas.

            https://www.itv.com/news/tyne-tees/2021-09-06/construction-starts-for-the-uks-first-gigaplant-in-northumberland

            https://www.carbonbrief.org/analysis-record-low-price-for-uk-offshore-wind-is-four-times-cheaper-than-gas/

            https://www.bbc.co.uk/news/uk-england-norfolk-48029440

            • KatT, the “renewables are nine times cheaper than gas” claim is based on average CfD’s of £48/MWh in today’s money, for offshore wind projects that will not come online until 2026/27.

              In reality no new CfD capacity has been added to the register during the last twelve months, even though new offshore wind farms and other renewable projects have been commissioned.

              Operators are at the moment legally choosing to delay their low priced CfD’s for up to three years, in order to take advantage of the higher prices in the wholesale market.

              Both Moray East and Hornsea 2 have delayed their original £57.50/MWh CfD’s, Triton Knoll phase 3 has also delayed its £74.75/MWh CfD.

              There’s no guarantee that those that have recently bid and received average CfD’s of £48/MWh, will not do like wise and delay in four to five years time.

              The Siemens Gamesa blade manufacturing facility was indeed a welcome employment boost to the city of Hull, but just two miles further down the same road, gas still provides far more employment opportunities.

  3. https://theconversation.com/could-liz-truss-allow-new-drilling-for-oil-and-gas-and-still-strengthen-the-uks-net-zero-target-190031

    Some common sense and a realistic plan at last….

    “Countries are racing to diversify their fossil fuel supplies right now, and producers are begging for new extraction licenses. Banning all new extraction isn’t helpful if it simply increases our dependence in future on Russia and Saudi Arabia. But how can the UK license more oil and gas without locking in more emissions? The answer is simple: make the continued extraction or import of fossil fuels into the UK conditional on permanent CO₂ disposal, starting now and ramping up to 100% by 2050. And then challenge the country’s trading partners to do the same.

    Require the world’s most profitable industry to get net zero done.

    • Some common sense and a realistic plan would be to maximise our renewable potential and maximise energy conservation. That would mean our own home grown North sea gas would last longer and we would need to import less.

      “challenge the country’s trading partners to do the same”

      Not with Liz Truss at the helm

    • That remains to be seen. Don’t forget net zero is law, we only have so much head room for emissions on the path to net zero and the courts have already ruled the government’s net zero approach is unlawful due to a lack of detail. It is wrong to think in the current crisis that climate change and net zero can be conveniently pushed to one side or further delayed. Or that somehow calculations can be altered to suit. They cannot. Timescales are important, decisions we take now have huge implications for maintaining a sustainable planet for our children and grandchildren. This energy crisis will pass but emissions will not.
      Economists and energy experts have repeatedly stated that more gas will not lower bills and is not the answer to this crisis. NS production is up 26% and has not even dinted prices. And the U.K. gas reserves are considered too small to lower prices and would only have a slight improvement on energy security. Whereas renewables and better insulation will lower bills, will improve energy security and will lower emissions,
      And CCS cannot be relied upon to allow unfettered oil and gas extraction either.

      https://ieefa.org/resources/carbon-capture-crux-lessons-learned?fbclid=IwAR3M9ei1N9H5GqgATJlDY1lgwv-PHSUWCzZeda1uSK5w0giJ0IkAeYc3gUk

  4. So, all interested parties are lobbying.

    Whilst it will be Government to decide, not lobbyists, I suspect it will not be more of the same. That is what has produced this mess, with previous pontificating glibly about energy security and then the consumer finding that was a mirage. New “energy security” but whilst the sun shines and the wind blows doesn’t look like a winning proposition.

    There will be a mixture of energy sources, and what is prioritized first will be what can deliver quickly. Nuclear can’t be delivered quickly but will need to be decided quickly. Oil and gas, into hydrogen or whatever, to get the CO2 sorted as Paul outlines, will need the acceleration. The £54B required to upgrade the electricity distribution will take many years to be rolled out. It will be, but until it is, there is a blockage there that needs to be accepted.

    Removing the hysteria from the fracking issue, I suspect some will get the go-ahead. After all, if a hydrogen industry is multiplied, feedstock has to supply it, and whilst surplus nuclear may produce hydrogen in the future that is decades away. Intermittent sun or wind would only produce intermittent hydrogen and that doesn’t seem something to rely upon just because some lobbyists would like it.

    Insulation? Much improved in UK over recent years. Look at the figures. Government can help to keep that going but best way to accelerate that is to facilitate good jobs and low taxes so people have their own money to insulate their own homes. Householders are rather better at deciding what suits their own requirements rather than have Big State providing them with a one size fits all type of offer. Much better to have the local chaps getting your business if they make you a good proposition and then doing a good job to get your endorsement for neighbours and friends to use them. The alternative of a fat contract for a State controlled system, produces fat cats, shoddy service, and the same issue a few years down the track, and rinse and repeat.

  5. Such excellent advice and now the High Court has instructed the government to place greater weight on the advice of the CCC when making decisions, it is to be hoped Ms Truss is paying attention. Especially when JRM reports to the High Court next March with his detailed plans showing exactly how net zero targets will be achieved.
    Sure the fracking industry will be disappointed to see the fact and truth in print i.e. that U.K. gas reserves are so small they will not lower bills.

    • Hopefully Ms Truss is paying attention to what the EU is doing, after all, wind and sun are free:

      “Ursula von der Leyen outlined a five-point plan in response to an energy price crisis, driven by the Russian shutdown of the key Nord Stream 1 pipeline but exacerbated by the climate crisis and lingering effects of the Covid pandemic.

      Low-carbon energy companies, renewable and nuclear suppliers that have reaped “enormous revenues … they never dreamed of” from generating electricity will face a windfall tax, Von der Leyen said, with proceeds earmarked to help domestic consumers and companies pay “astronomical” bills.

      Under EU energy rules, the price of electricity is determined by the cost of the most expensive fuel, usually gas, rather than cheaper renewables and nuclear power. As a result of all-time-high gas prices, low-carbon electricity generators have been rewarded with a big increase in income.

      “These revenues do not reflect their production costs,” Von der Leyen said. “So it is now time for the consumers to benefit from the low costs of low-carbon sources.” The commission, she said, proposed “to re-channel these unexpected profits” to allow member states to support vulnerable households and companies.”

      • At PMQs today, Liz Truss explicitly ruled out a windfall tax on any energy companies – saying that some companies are foreign based and that such a tax would discourage investment.

        • Thanks Paul. It seems that The EU will impose a windfall tax on renewables and nuclear generators but not fossil fuel generators? This is because the renewables and nuclear generators are making obscene profits, just like in the UK.

        • Actually, Paul, she ruled out any increase in the windfall tax. The windfall tax increase would probably raise about £1B but would indeed risk development and security going elsewhere. So, could raise £1B out of about £100B, or more, and UK could end up like Holland paying for more LNG at $47/MMBtu, and more to fund the unemployed. (The figures on what will be raised will not be achieved. Tax bases can be shifted very, very quickly by International companies. Politics will suggest they will not, reality shows they will. Labour tested it with INEOS, and in a blink of an eye they were based in Switzerland. Holland tested it with Shell, and in a blink of an eye they were based in London. Lesson learned? No. Should have been.)

    • No, there were not, Dorkinian. Look at the figures. Insulation, or energy efficiency ratings, have improved dramatically over the last few years. As with all things, some way still to go but it is not the panacea it is claimed to be. It is the comfort blanket for those who find that the policies they have advocated for the consumer have failed, and do not have the guts to admit it.

      Bit like saying waste less energy. Oh the young waste the most. Simples-no more children.

    • It cost a fortune to kingspan my 12 bedroom castle from the dividends I have achieved with my FF shares, I’ll be waiting 50 years for the payback on my renewable / green investments. So much so in 30 years time I’ll be 6 feet under fertilising daffodils!

      • Nonsense, Jack.

        Look at energy efficiency rating for UK houses. I advised you to do so. You were too lazy, or your search engine doesn’t include such data.

        If you still are too lazy then find someone who lives in the UK-like me-and wait until it snows. Then walk around your area and see where and when the snow melts off roofs. Yes, it does quickly in a few cases, but those of us with a few years under our bonnets, will note how few houses there are compared to a couple of decades ago. There are quite a few in those remaining houses who are quite happy to spend more on energy. Energy efficiency ratings within the sales documents for housing in UK have produced a step change to UK energy efficiency, as they have for domestic appliances. A bit more can be done, but it is tinkering at the edges.

        Of course it was you who needed the comfort blanket, Jack, but it is just that. Your strategy is shown by current events to have failed so what is left? Oh yes, do what many have already done, or some haven’t but just don’t want to.

        As far as your nonsense about the oil and gas companies, £100B more cannot be raised from the N.Sea. They are already paying tax at 65%, where that tax is able to be levied. N.Sea is already a relatively high cost production area. Make it even more so, and the operators will just go elsewhere, and then no 65%. Hand outs by Government are always with tax payers money, Jack. They have no money, they just allocate that of the tax payer. Borrowing is just a way of deferring the tax. Maybe keeping companies in UK paying 65% tax would reduce some of that deferred burden falling upon the individual? Perhaps even allocate them some licences to encourage them?

        And, yes, according to Reuters, the moratorium on fracking in UK is about to be lifted. Now, if that doesn’t show how the strategy advocated towards Net Zero has failed, then what does? More of the same? Good job that was not the mindset after Dunkirk, Jack. Obviously, the strategy has not worked, £160B for new nuclear that was previously not even in the small print, shows that.

  6. “In one move that will cheer some Tory backbenchers, it is understood that Truss will announce an immediate end on a pause on fracking for shale gas, with new drilling potentially beginning within weeks as part of her hydrocarbon-based push for greater energy security.”

    From the Guardian this morning.

    Paul / Ruth – which locations (if any) currently have planning permission to drill shale gas wells. The Guardian is implying that there is at least one, otherwise how can they say “within weeks”?

    • Our understanding is that there are currently no wells with permission to start drilling or fracking for shale gas. See Ruth’s summary at https://drillordrop.com/2022/09/02/uk-fracking-a-decade-of-broken-promises-earthquakes-and-no-gas/

      IGAS believe they can get fracked gas into peoples’ homes in nine months – but that is “with government help” – so presumably looking to short-circuit the planning process.

      Cuadrilla currently have no permissions to drill or frack at Preston New Road.

      So we wait with interest for this new drilling “within weeks”.

      • IGAS need to remember the strength of feeling against their Fracking project at Barton Moss before they consider going down that path again .

        They were crippled financially by well organised, determined opposition from local
        people .

        IGAS was not welcome and not wanted .

        Anyone wanting to see the strength of opposition to IGAS at Barton Moss should check out YouTube and type in ” Fracking Barton Moss “

      • The Guardian now seems to have revised its position. A tweet from Political editor Pippa Crear now says “with planning requests for new drilling now expected within weeks

Add a comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s