The fracking debate in the UK
By Stuart McIntyre - Posted on 30 January 2015Dr Stuart McIntyre, lecturer in economics and course co-Director of the MSc in Global Energy Management, discusses recent developments with fracking in the UK.
Fracking is back in the news in the UK. On the 26th January the UK Parliament’s Environmental Audit Committee (EAC) released a report on shale gas exploration. The EAC supported moves to strengthen environmental protections and suggested members might explore a moratorium on fracking (which was subsequently defeated). The current UK government supports fracking claiming that it will create jobs and growth while lowering fuel prices, as has happened in the USA. The main opposition (Labour) party agrees, but has concerns about the environmental impact of fracking. Amendments to the Infrastructure Bill were accepted which significantly strengthen environmental regulations of shale exploration activities. Eager not to be absent from the debate, on 28th January the Scottish Government announced a moratorium on fracking in Scotland.
Electricity generation in the UK
The reduction in coal power generation and the anaemic pace of nuclear power development, combined with the introduction of a large number of intermittent renewable technologies onto the grid, is leaving the UK electricity network increasingly dependent upon gas fired electricity generation to ensure security of supply. National Grid reported it expected the spare electricity capacity to be close to 4% in 2014/15, down from 17% three years earlier.
This dependence upon gas poses a number of problems, most obviously by exposing the UK to the geopolitics of the gas market; price volatility and security of supply concerns come to the fore. In this sense shale offers a new route to supply our increasingly important fleet of CCGT power plants with gas free of these problems. On the environmental front there is a serious scientific debate to be had, but at a minimum the use in the UK of shale gas extracted in the UK would be less environmentally damaging (taking a global perspective) than imports of shale LNG shipped in from half way across the world.
It is clear that a majority of members of the EAC are opposed to fracking regardless of any environmental regulation concessions that might be made, describing it in their report as: “inconsistent with the UK’s obligations under the Climate Change Act”. It is true that natural gas, whether conventional or otherwise, is not ‘low carbon’, and if we lived in a country in which the energy system was able to run itself on renewable (and nuclear) technology alone (which would also require significant advances in energy storage technology), there might be an argument for abandoning the use of gas in the UK energy mix, but we are not there -or close- at the moment.
Politics and the UK energy sector
The EAC argue that by the time shale is capable of supporting widespread use in the UK, coal will be gone from the energy mix due to EU regulations, as if this is itself an argument against development of a shale resource. This illustrates the problem with the EAC report. It is written as a series of ripostes to advocates of shale exploration- ok so far as it goes- but blind to the broad challenges facing the UK energy sector, not least the impact of recent electricity market reforms and the creation of capacity markets. It is ‘an anti-fracking manifesto’, as the FT described it, not a dispassionate assessment of the evidence.
Some believe that there is no place for fossil fuel generation in the UK. Their challenge is to demonstrate how security of supply and affordability concerns can be addressed in such a situation- not an easy task. There is however a more nuanced discourse around the regulation of shale gas exploration in the UK that lurked underneath the bluster of the pre-election debate this week which is very much worth having, and some consensus was reached this week around tightening environmental regulation of such activities.
Beyond the politics
The UK needs a balanced energy strategy, one which is not driven by Nimbyism or bad science, one which recognises the strengths and weaknesses of each generation technology and most of all one which is focussed on delivering affordable secure energy in an environmentally responsible way. None of which is going to happen a few months before a close general election. In that sense perhaps we should have a moratorium- on politicians meddling in the energy sector while they seek votes for re-election.
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About Stuart McIntyre
Stuart is a lecturer in Economics and Course Co-Director of the MSc in Global Energy Management. His research interests include: Environmental and Energy Economics, Regional Economics, Spatial Econometrics, Political Economy,and the Economics of Crime.
