For far too long we have debated what our energy mix should look like, all the while crucially missing the most important point: the UK has become a nation that imports its energy, reducing its energy security, shunning UK job opportunities and missing out on tax revenue, as other countries reap those rewards.
We have also started to offshore our climate change commitments by allowing energy to be transported over vast distances, often produced from countries with very different environmental standards and regulations to our own. To some it’s better to import gas than to produce it here, as the carbon “costs” of producing and transporting the gas are borne by others. It must be a bitter irony to those who campaign against onshore oil and gas that UK shale gas wells drilled over the next 20 years could save 117m tonnes of CO2 rather than being reliant on LNG imports.
Last Friday another Russian tanker started pumping LNG into UK storage tanks. There can be no better illustration of what our future could look like. This is exacerbated as our European neighbours have similar issues to us. By 2030 Norwegian gas production is forecast to decline by 25 per cent. This means that around 75 per cent of EU gas supplies will have to come from either long-distance pipelines or LNG-exporting nations, like Russia and Qatar. This will have a big impact on the UK with a large neighbour also competing for gas. It is inevitable that the result will be higher prices for the UK consumer.
We can reverse this trend. But we need to stop arguing about the relative benefits of nuclear, gas and renewables and recognise – we need all three for power, heat and feedstocks.
The announcement of further government support for onshore oil and gas was met by howls of indignation from some quarters. The idea that you can drill an oil or gas well as easily as putting up a conservatory on your house is laughable. The government will be launching a consultation to see whether temporary conventional oil and gas test wells, that are not hydraulically fractured, that are drilled to ascertain if there is any oil and gas present should be treated as permissible development. These wells will have to satisfy up to four other regulators outside of the planning authorities that they are safe and will have no harmful environmental impact. These are simple, straightforward structures just like bore holes and sewers that already have permitted development status.
The facts can’t be disputed, we need gas today and for many decades to come to power and heat our nation – it is not a case of whether we use gas, but what gas we use. The GMB union also welcomed the government’s announcements as did the Chemical Industries Association. Half a million jobs depend on gas as a feedstock.
We must think of the future, and industry and government must look at solutions such as storage, carbon capture and hydrogen to reduce carbon emissions still further. The most economical way of producing hydrogen is through methane reformation and the best environmental outcome is producing this methane in the UK.
Energy security must be thought of in much wider terms than ‘there is plenty of gas in the world if we need it’. As the recent report for the government on gas security commented, a number of scenarios are viable only if “GB consumers are willing to pay for it.” Energy security should be about ensuring that we have an uninterrupted supply of energy now and in the future at an affordable price with the lowest environmental impact.
British onshore gas can meet this demand, creating UK jobs and tax revenues, while producing the energy we rely on in an environmentally sound and safe manner. The alternative is handing responsibility, jobs and taxes over to others.
Ken Cronin is chief executive of Onshore Oil and Gas, the trade association for onshore operators