Shale Gas

The House of Lords Economic Affairs Committee have given an important warning to the Government today regarding the slow progress towards developing shale gas. The prize is high – “substantial benefits” to “the economy, to national energy security and to the environment”.

Yet these important benefits are being delayed by red tape:

The UK’s regulatory framework for oil and gas exploration and production is highly regarded internationally. It is also dauntingly complex and untested by large-scale onshore development of shale. Ministers and regulators have taken measures to adapt the system. But many complexities remain, with responsibilities divided between different agencies. Industry is uncertain how the rules would apply in practice.

Since the lifting in 2012 of a moratorium on hydraulic fracturing, we understand (May 2014) that the Environment Agency has not received or approved any applications for the necessary permits. There is no reason why effective regulation should not be transparent and speedy as well as rigorous. Delay is not only costly and wasteful, it can also drive investors elsewhere.

Another reason why the Environment Agency should be abolished.

However would such bureaucratic obstacles still be in place if there was the political will to remove them? The last polling I could find had support for extracting shale gas in the UK at 41 per cent with opposition at 33 per cent. Given the merits of the case the support should be much higher. Yet the anti shale campaign are generally given a clear run. As the committee said:

“Development of shale gas in the UK cannot go ahead without public acceptance.

Public concerns must be taken seriously and every possible effort made to reduce or eliminate risk and provide reassurance.

We consider that the risks to human health and the environment are low if shale development is properly regulated, with the improvements we recommend. We welcome the community benefit schemes announced by the industry which, if well-targeted, could play a role in winning public acceptance.

We also recommend that the industry improves its presentation and communication skills and puts across more convincingly the economic and employment gains shale development can bring to areas like Lancashire.”

The Conservative Party should help to lead public opinion on this. We have a clear position while the Lib Dems and Labour are dithering. Shale gas in the United States has cut greenhouse gases. If the Lib Dems are serious about the environment should they not back shale gas? The House of Lords report noted that the cost of energy in the UK is three times higher than in the US.

If Ed Miliband and the Labour Party are really concerned about cutting energy bills to ease the “cost of living crisis” do they not agree that we should get fracking?