US Shale Gas, UK Jobs (lost)

The story so far on UK shale gas job seems to be:

  1. Shale gas boom in the USA reduces gas prices
  2. Cheap dirty gas displaces less cheap, dirtier coal
  3. US CO2 emissions go down
  4. The price of US coal goes down
  5. Rather than leaving the coal in the ground the US exports more than 50% of the displaced coal to Asia and Europe, where it is burnt, more than offsetting the US emission reductions (when added to the gas emissions)
  6. In the UK we burn cheaper US coal and our emissions go up
  7. Global emissions go up
  8. UK coal becomes uncompetitive with cheap US coal
  9. 600 UK miners loose their jobs

See Prof Kevin Anderson speaking in the video below, and Scottish Coal cuts 600 jobs at mines in Ayrshire, Lanarkshire and Fife

The power of market forces. The way to make market forces work in our energy sector is to set the carbon intensity of electricity generation and then let the technologies compete to be the most carbon and price efficient. An amendment to the Energy Bill, if successful, will set the carbon intensity at 50g of carbon dioxide per kilo watt hour generated by 2030. This is an opportunity to write to your MP to urge them to support the amendment and make a difference.

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Shale Gas Investors are Circling

Investors are starting to size up making money out of unconventional gas in your community:  The Fleet Street LetterSaudis to quit oil business? As they say themselves corporations are only interested in one thing – making money.  Forget about the environment.

Not only do they not care about the environment, which sustains us, but it is probably a very bad investment anyway according to the report Unburnable Carbon 2013:  Wasted capital and stranded assets by Carbon Tracker Initiative and the London School of Economics.

The Government’s unconventional gas policy is a train crash in the the making when considered in relation to climate change, the local and global environment and the fossil fuel industry’s assets. Even the Civil Servants are resigning.

Impact of Shale Gas on Energy Markets

The House of Commons Energy and Climate Change Committee’s 7th report The Impact of Shale Gas on Energy Markets has finally been published and has provoked a welter of headlines such as ‘Get on and drill’ for shale gas say MPs , but the report is far more measured.

The report basically says that the situation in the UK is not the same as the US, that gas prices probably won’t come down and may go up, that communities need bribing, questions tax breaks for the drilling companies, says we need CCS, says shale gas in the US has resulted in higher emissions due to displaced US coal and that it is incompatible with our climate change commitments. This report provides little clarity as most of its recommendations are very serious caveats to the premiss that shale gas is a good idea. Further, two of the committee members, including the chairman, have tabled an amendment to the Energy Bill to set in law a carbon intensity of 50g/kWh, which is a serious statement about greenhouse gas emissions. This is entirely incompatible with burning all of the known oil and gas reserves, let alone the unconventional gas.

The main conclusions and recommendations include:

  • The UK experience will be different to the US and we should learn from their mistakes
  • The government should use an understandable definition when it publishes new estimates and it should emphasis the uncertainty in the estimates adding “we conclude that it is impossible to determine reliable estimates of shale gas in the UK unless and until we have practical production experience
  • It is unlikely that offshore shale gas will be developed in the near future
  • Communities affected should receive some benefit from the development in the form of “substantial material benefits”
  • Whilst the regulation should be streamlined it must be robust to protect the environment and health and safety of workers
  • Are tax breaks appropriate?
  • The price of gas may not fall
    • “It is generally agreed that it is more expensive to produce [shale gas] than conventional gas”
    • “It is by no means certain that prices will fall as a result of foreign or domestic shale gas development.  It would be wrong for the Government to base policy decisions at this stage on the assumption that gas prices will fall (it is possible that they will rise) in the future.”
  • US greenhouse gas emissions may have fallen but the have been displaced to Europe through coal exports
  • The Government should complete its research on impacts on greenhouse gas emissions asap so that this information can be used with reference to licensing. Venting should be outlawed
  • Unchecked development of gas generation may be incompatible with UK climate change commitments and gas “lock-in” should be prevented
  • The Government needs to get on with Carbon Capture and Storage technology
  • A favourable investment climate for low carbon technologies should be developed
  • The Government should not rely on shale gas contributing to the energy system when making strategic plans for energy security
  • They say almost nothing about jobs

Conflicting understanding on Unconventional Gas as a transition fuel

On 11th March 2013 the government launched the Office of Unconventional Gas and Oil (OUGO), it is understood that both UK Methane Ltd and the Tyndall Centre for Climate Change Research were present.

On 14th March 2013 at the debate in Bath between UK Methane and Frack Free Somerset, UK Methane said that they had recently been at a meeting with Ed Davey, the Minister for Energy and Climate Change, and that they recognised that we need to decarbonise our energy sector and said that unconventional gas could be a transition fuel to help reduce emissions from coal.

On the 12th March 2013 Professor Kevin Anderson of the Tyndall Centre for Climate Change Research was unimpressed with the government’s assertion that an unconventional gas industry is compatible with our legal commitment to limit climate change to a 2°C rise this century.

Professor Anderson does not mince his words on the subject:

“Shale gas is the same as natural gas – it is a high carbon fuel, with around 75% of its mass made of carbon. For the UK and other wealthy nations shale gas cannot be a transition fuel to a low-carbon future – anyone who says differently does not understand our explicit international commitments under the Copenhagen Accord, the Cancun and Camp David Agreements – or, alternatively, is bad at maths”.

“In the UK and globally we are now reaping the reward of a decade of hypocrisy and self delusion on climate change. We pretend we are doing something ourselves, whilst blaming others for rising emissions. The truth is out – it is a tragedy of the commons par excellence – we are all to blame and we have left it too late for a technical fix. We are heading towards a global temperature rise of 4°C to 6°C this century; if we don’t get off this trajectory shale gas needs to stay in the ground and we, in the wealthy world, need to consume much less energy – now!”

Today (14th April 2013) we hear in the press that food production needs to rise 60% by 2050 but that production gains may be cancelled out by climate change. Millions face starvation as world warms, say scientists

Today we also hear that the government has ignored planning advice that commercial and residential property should not be built too near UK nuclear plants – Planning advice is ignored over building near nuclear sites. If the government ignores planning advice over nuclear plants then it may pay scant regard over unconventional gas planning.

Government and local communities need to get real and start joining up the dots between energy, climate and food security.

Press Speculation on BGS Shale Gas Estimates

The British Geological Survey is expected to release its revised estimate of unconventional gas resources in the UK any time now. Elements of the press and some politicians continue to speculate what these figures might be, rather than wait for the figures to be published. Recent press estimates range from “Shale gas could heat all homes for 100 years” (The Telegraph 6th April, 2013 – by Louise Gray) to “Britain has shale gas for 1,500 years, but bills won’t be lower” (The Times, Feb 9th, 2013 – by Dominic Lawson).

The BGS figures should provide us with a better estimate than previously available. However, it is worth noting that:

  • Only a portion of the gas in the ground is technically recoverable, perhaps between 10% and 20%.
  • Only a portion of what is technically recoverable will be economically recoverable – no one currently knows how much.
  • In the South West 26% of households are not on the mains gas network, including entire villages in the Chew Valley. These households use other energy sources including bio-fuels such as wood, and fossil fuels such as oil, propane and liquid natural gas (methane). Some households use no fossil fuels for either heating or electricity.

Based on the existing British Geological Survey Estimate Professor David MacKay of Cambridge University, who is also the Chief Scientific Adviser to the Department of Energy and Climate Change, has said:

It is conceivable that the technical potential of shale gas in the UK could be very large:  shale gas tends to be found wherever there is coal, and the British Isles were blessed with a very large endowment of coal – a Saudi Arabia’s worth, roughly – so it is credible that the quantity of shale gas “in place” is comparably large. However, the quantity “in place” is not the same as the technically recoverable resource, which may be much smaller, since fracking typically releases only a minority of the gas that is in place.  Indeed it still remains perfectly possible that the technically recoverable resource (at an economic price) could be zero, because the yield from shale deposits varies by more than a factor of ten, depending on the precise chemical and mechanical properties of the host rock.  Those who say that the recoverable resource is enormous are cherry-picking the most optimistic projections of yield, based on the most productive shales in the USA.   But there is no reason to believe that the UK’s shales will have a productivity that is at the high end of the range.  The truth is that we don’t yet know.  This large uncertainty about the resource will be reduced if and when exploration and extraction take place in the UK; meanwhile, one central estimate of the UK’s technically recoverable shale gas resource is the British Geological Survey’s estimate of 5.3 trillion cubic feet (150 bn cubic metres). To put this quantity in context, UK natural gas consumption is roughly 100 bn cubic metres per year, so the BGS estimate corresponds to 1.5 years’ consumption.  When DECC receives any updated advice from the BGS, we will put this information on the DECC website.”

Commenting on another article by Dominic Lawson on climate change in the Independent newspaper, Professor MacKay has noted that “irresponsible journalism like Dominic Lawson’s deserves a good flushing”.