Is Britain ignoring its shale gas bonanza?
If you still haven’t heard about the shale gas (and shale oil) revolution, you will. Not interested? Well if you yearn for domestic energy bills, especially gas, to end their meteoric rise here in Britain, you should be. Just as important, what we in Britain need to know is that shale’s energy riches are already proving a global energy game-changer elsewhere. Yet while other governments are falling over themselves to back shale gas and oil development, the early signs are that the British Government has developed a myopic attitude to shale and the energy mix generally, seemingly indifferent to the potential energy bonanza right under our feet.
What is shale gas? Why all the fuss?
Around 70% of the world’s surface rocks are sedimentary. Some 50% of those rocks are shale: formations with vast quantities of trapped gas and oil. The energy world has known about shale gas for years, but direct drilling had always proved inefficient in terms of commercial extraction. But all that changed in 2009 when American engineer George Mitchell successfully pioneered a new ‘hydraulic fracking’ (of which, more later), transforming the method of shale gas and oil extraction and its viability. But while the rewards are undoubtedly great, the “uncertainty” over the fracking process is currently creating a loaded negative debate, especially in the UK. Which is a colossal shame, as for once the palpable excitement over a cheap, realisable, close-to-home new energy resource is justified.
The prevalence of global deposits of gas, particularly shale gas, has sent geologists around the world into over-drive at the behest of domestic political leaders. Poland, China, the Ukraine, India, Brazil, Argentina and a hatful of others have all lately claimed significant potential reserves. In July 2010 Cuadrilla, a British company with a Spanish name, announced the discovery of significant British shale gas deposits in Bowland Shale, which stretches from Preston, Lancashire to the Irish Sea. Early assessments suggest sufficient gas to provide up to 5 to 10% of national gas needs. Later in the year, IGas Energy reported that the rocks beneath the Wirral area alone could yield up to two trillion cubic feet of shale gas – enough to supply all 26 million homes in Britain for three years. The full extent of the British shale map is due to be documented by 2012.
Is shale to good to be true?
Carl Sagan once said, ‘extraordinary claims should be backed by extraordinary evidence.’ Well we need look no further than across the Atlantic to see that shale gas production has already revolutionised US gas supplies. Around 45% of US gas supply now comes from shale. Within a year or so, that figure is expected to rise to 60%. In June 2010, the Massachusetts Institute of Technology further predicted that US gas production was, due largely to shale, on course to double – from 20 to 40% – its share of the US energy market over the next few decades. However, while governments from China to India to the US have boosted shale gas and oil up their energy mix priorities, all the signs are that shale gas is not even on the British Government’s energy mix radar. Pressure too has come on the British Government in the form of reports by the Tyndall Centre and the Co-Op demanding a moratorium on shale gas drilling in the north-west until the hydraulic fracking process is investigated. For the time being, however, the Department of Energy and Climate Change (DECC) has had the sense not to impose one.
Last week two Lords peers expressed surprise that the government’s Revised Draft National Policy Statements, Britain’s national energy blueprint to 2050, didn’t even mention shale. As Lord Reay pointed out, ‘there is the possibility that potentially abundant supplies of unconventional gas will result in considerably lower gas prices.’ Lord Jenkin echoed the concern wanting to know why, since shale’s potential contribution was known to the Government last November, the report omitted any mention.
Meanwhile, DECC energy policy persists in majoring on just developing nuclear power (which we urgently need) and renewable energy (massively expensive and generating paltry investment-to-energy returns). As regards the latter, while hydrocarbons will continue to supply around 85% of the global energy mix beyond 2050 – whatever wishful thinkers may prefer – the DECC appears to have no serious hydrocarbon management policy. And while green ideologue Chris Huhne (what was Cameron thinking?) remains at the energy helm, it is not likely to get one.
The renewable energy diversion
Messrs Cameron, Clegg and Huhne all appear willing to pour taxpayer billions into a mostly wind power driven bid to overturn the laws of physics by producing industrial scale ‘renewable’ energy. It’s a bid that’s already generating an economic black hole that fails us entirely when cold weather hits. Yet, as regular winter wind power failures are putting a severe strain on our gas supplies, much of the answer could lie beneath British soil.
Last Autumn saw gas prices surge in Europe. Across the Atlantic, however, the shale gas glut was largely responsible for flat-lining the US gas price. By the end of 2010 Americans were paying half as much for their heating fuel as their shivering British and northern European counterparts. Moreover, not only would shale gas provide a cheaper source of energy than any renewable source, it could do so without the economically draining public subsidy lifeline on which renewables depend (and will continue to do so).
At the Prospects for Shale Gas in Britain gas shale forum in Berlin in mid-January, Professor Mike Stephenson, Head of Science (Energy) at the British Geological Survey, echoed his concern at the lack of interest of the British government in a potential domestic gas bonanza. Citing India, where they are already building huge power stations powered by gas, Stephenson said that he didn’t think the British government was ‘thinking enough about shale.’ He went on to say that Tony Blair’s commitment for 15% of the country’s energy to come from renewable sources was proving ‘a bit of a bind.’
A recent report, Global Shale Gas: What Now, What Next? published by No Hot Air at Research and Markets, also identifies the chief reasons why some politicians and energy “experts” reveal an ‘antipathy’ toward shale development. The report highlights how
‘in the UK especially, an entire energy-risk mitigation industry has arisen’ with many energy experts having ‘a vested interest in highlighting any alleged downside risk of shale.’ In short, lots of reputations (and associated public cash research grants) are at stake.
Political prejudices notwithstanding, it is, though, the issue of fracking which is causing most public confusion.
Fracking nonsense: risk and reward
No mining technique is without risk. But in the case of fracking, particularly in Britain, the risk is miniscule, the potential reward huge. Fracking involves drilling down up to 10,000 feet then drilling sideways into the shale layer using a mix of water and chemicals to release the gas and oil. The process has made extraction far more efficient if, for some, controversial. The resulting excitement about a prospective 100 years plus of shale gas, has offered us a potential ‘bridge’ to a post-hydrocarbon era, with shale gas plants emitting up to 45% less CO2 than conventional coal-fired plants. But the lack of understanding of the global energy realities among the environmental lobbies – who, let’s face it, are likely to be against any hydrocarbon extraction efforts – has consistently led to public confusion.
As my colleague at Energy Tribune, Dr Michael Economides, a gas consultant of international renown says about fracking, ‘there is a vicious war being waged against the public interest by environmental groups that fracturing fluids will infiltrate the water supply’. Economides, with 25 years experience as a consulting engineer working with energy companies in 70 countries, articulates the prevailing concerns. ‘First that fracking causes natural gas to migrate upwards through geological formations, infiltrating drinking water aquifers. Second that chemicals mixed with water will contaminate the water aquifers.’ Economides then debunks both as eco-myths. He says, ‘the idea that natural gas formations 10,000 feet below ground can somehow contaminate drinking water aquifers 9,500 feet higher than the actual fracture is false’. He adds, ‘ironically, in fracture design engineers go to great lengths to avoid fracture growth of even 100 feet to avoid losing production to another natural gas formation.’
Quite simply, more domestic gas will mean lower gas prices. We are already facing the very real prospect of serious power shortages if we don’t press the button now and starting building a new generation of power stations, and quickly too. As it is, it takes up to ten years to bring a nuclear power plant online. Whereas it takes only two years to build a gas extraction power plant. Shale gas reserves in the UK may be more modest than in the US and Poland; even so, they offer us a seriously useful addition to the domestic energy mix – with little or no risk. Can we really afford to ignore a potential saving to the on our Russian/Qatari/Norwegian gas bills of, at current estimates, around £20billion, probably more? How strange, that a nominally pro-free market Conservative-led government should think so.
Peter Glover is the author of Energy and Climate Wars: How naive politicians, green ideologues and media elites are underming the truth about energy and climate.
Critical Reaction, 20 January 2011
