The impact of the government’s endorsement could be dramatic for Britain’s energy policy. According to estimates of the International Energy Agency, globally there is enough natural gas for the next 120 years at current rates of consumption. Supplies of unconventional gas could provide us with this cheap and relatively clean energy for another 250 years or more. Energy crisis? What energy crisis?
The drilling company Cuadrilla estimates that shale exploration in the North West alone could contribute £5bn to £6bn to the local economy over the next 30 years through job creation and business taxes. Yet there are other large shale formations in other parts of the country that may be even bigger than the Bowland shale.
And then there’s the North Sea. According to the British Geological Survey, UK offshore shale reserves could be five to 10 times as high as onshore. That would be enough to turn the UK into one of the world’s top gas producers. No wonder a growing number of MPs want the North Sea to be at the heart of a new offshore shale gas industry. Even the Energy and Climate Change Committee has recommended that the government should encourage the development of offshore shale gas drilling.
With energy imports reduced, the UK would gain significantly from a shale gas revolution: cheaper energy would make UK manufacturing more competitive, gas and electricity bills would fall and the rising trend in fuel poverty could be reversed.
Shale gas fracking has already revived US oil and gas production, yielding an overabundance of cheap natural gas. The US passed Russia in 2009 as the largest producer of natural gas in the world. In 2010 natural gas contributed more than $500bn (£314bn) to the US economy. In the process, 2.8m jobs were created.
Because of the potential scale of UK shale drilling, significant levels of employment would be created or supported across a broad range of job sectors. Energy-intensive industries and manufacturers now considering relocating their operations abroad due to increasing energy costs will also be more likely to stay.
Britain’s looming shale revolution is a clear victory for those of us who have argued that renewable energy is economically unsustainable and that the exploration of shale gas can provide a huge potential boost to both UK industry and British households.
The government’s endorsement of shale gas, together with its gradual rollback of unpopular green schemes and expensive renewables subsidies, comes as a massive blow to the green lobby, which is suffering the longest losing streak for a generation.
“Shale gas exploration would be a major blow for the British renewable energy industry, which would see investment hijacked by a new dash for gas,” Greenpeace warned in response to the new report. “Large-scale shale gas extraction is completely incompatible with the urgent issue of tackling climate change,” the WWF complained.
Undoubtedly, a British gas glut would make renewables even less competitive. Initially, green campaigners were supportive of natural gas. Then they realised that it was undermining subsidies for renewables which are now drying up fast. However, cheap and abundant gas is not only competing with green energy, but also with coal and nuclear. “We used to regard gas as a transition fuel,” energy minister Charles Hendry MP said recently. “We now understand that it is in fact a destination fuel.”
Britain’s climate and energy policy now faces a huge opportunity. With a little bit of luck, a shale investment boom could materialise over the next few years. It would do wonders for the government’s severely dented reputation over its energy policies. As the shale industry gets the green light to steam ahead, it is almost inevitable that we will see the evolution of a more pragmatic and less zealous approach to the green agenda.
Benny Peiser is the director of the Global Warming Policy Foundation.