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UK parliamentary group urges priority for shale gas development

Increase font size  Decrease font size Date:2014-05-12   Views:429
Shale gas regulations should be streamlined and the government should lend its weight to industry attempts at producing gas through hydraulic fracturing, the Economic Affairs Committee of the UK's upper house of parliament said.

Launching its report published Thursday, based on dozens of interviews with industry representatives, it said not one application to drill an exploration well and fracking had been made since 2012 -- the year that the government lifted its moratorium on shale gas exploration.

The most common reason companies gave for not moving ahead was regulatory complexity. Local protests were another threat to exploration activity.

While tensions between Ukraine, Russia, Europe and the US show no signs of easing, committee chairman Lord MacGregor told journalists Wednesday that the government needed to "get its act together faster and more comprehensively" to enable exploration work to proceed.

"Energy security is now crucial and shale gas and oil are a part of that. But we have not yet left the starting-gate," he said.

"The government must be more forceful in its advocacy of the benefits of well-regulated shale drilling," he said.

A cabinet committee under the finance minister should be set up to drive forward the government's decision to go "all out for shale." That would show that the government was serious about it, he said.

Apart from the immediate crisis threatening gas flows to Europe, the UK has failed to address its dwindling capacity to generate electricity. One of the interviewees, the energy policy expert Dieter Helm, described this as a "very slow-motion car crash."

Based on the evidence heard, the committee found that while shale gas could not solve either supply risk in the time available, it could at least "provide, in the medium term an additional source of supply which, combined with policy changes to encourage investment in generating capacity, could help ensure that competitively priced electricity supplies are maintained at an adequate level for many years to come."

When the public is more aware of the economic and political benefits of shale gas production, aided perhaps by a shift in the tax take from Whitehall in favor of local communities, some of the opposition might evaporate.

But MacGregor said it was not the committee's place to say what percentage of the tax take should be redistributed.

One environmental group being interviewed said that it would oppose fracking, even if all the right regulatory and environmental boxes were ticked.

But as the committee pointed out, it will be years before enough wells can be drilled to assess the impact that shale gas might have on the economy and energy security of the UK.

Winning the support of the public has been a major problem for producers, while, as the committee pointed out, more and more coal is being burnt in power generation in the UK -- a clear contradiction of the intent of European energy policy that is aimed at decarbonizing.

Coal produces almost twice as much carbon dioxide as gas in power plants, per unit of output, and its share in the UK mix is greater than that of gas.

 
 
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