The Green Great Britain Week was intended to be a celebration of the UK’s low carbon industries and the progress that has undoubtedly been made to decarbonise the UK economy. It was however an oddly conflicted week; also featuring the recommencement of fracking, cuts to support for low emission vehicles, ministers seemingly criticising people who put PV on their roof, and the apparent but yet to be announced closure to new applicants of the Rural Community Energy Fund. On the plus side the undoubted highlight of the week, was the release of three Lancashire anti-fracking protesters.

The Green Great Britain Week was timed to coincide with the launch of the International Panel on Climate Change’s (IPCC) most critical report yet on worldwide efforts to reduce greenhouse gas emissions, which again highlighted the need for governments to take urgent and radical measures, within the next 12 years, or risk runaway climate change. In response, the UK government has asked the UK’s Committee on Climate Change(CCC) to report on how the UK could reach zero carbon by 2050[i], although it remains unclear whether the report remit will allow the committee to address shorter term targets to meet the 4th and 5th carbon budget.

In direct contrast, some would say conflict, with its low carbon commitments, the UK government has also published a number of papers and infographics[ii] in what seems a desperate attempt to garner support for the fracking of unconventional fossil fuels. It appears that these publications have been released to provide justification for the upcoming consultations on whether exploratory drilling should be allowed as a “permitted development” in the planning system, equivalent to putting up a conservatory, and the proposal to move shale gas production projects into the National Significant Infrastructure Project (NSIP) planning process. Both these measures would reduce the ability of local communities and local authorities to object to, and delay, fracking through the planning process.

In this blog Regen takes a closer look at the issue of fracking, and in particular, the argument that the exploitation of unconventional gas is critical to our future energy security.

Better ways to secure clean and affordable energy

We are not going to recommend that people read the infographics, but if the curious want to see them for themselves they can be found here.

The main argument made in favour of fracking is that it will provide the UK with additional energy security. We don’t believe that to be the case for reasons that will be discussed below, but we do agree with the underlying analysis that the UK faces real energy security issues due to its shift to become a significant net importer of gas, with 46% of our demand now imported[iii]. The pro-fracking infographics could have gone on to say that around 15% of our gas is imported in the form of liquified natural gas (LNG), mainly from Gulf States such as Qatar, through the highly contested Strait of Hormuz. Our other main sources of gas are via pipelines from Scandinavia and mainland Europe, and although we don’t yet buy much gas directly from Russia, our supply is nevertheless impacted by the price and supply balance of the European gas market and therefore by decisions of Putin’s government.

The March 2018 “Beast from the East” weather event, when the gas network came close to serious curtailment, revealed just how susceptible we are now to gas supply issues. The rise in gas prices, despite a warm summer, also confirms that, for as long as we rely on fossil fuels, UK energy costs are largely determined by international commodity markets.

Having correctly identified that our reliance on imported fossil fuels is a risk, there are a lot of things the government could do to improve our energy security and put the UK on the track to decarbonisation.

For example:

  1. Reduce our dependency on fossil fuel gas by accelerating the transition to renewable energy, especially home-grown wind, solar, tidal and wave power. This would be relatively easy and cost effective to do now for electricity and most transport.
  2. Build homes that are genuinely energy efficient and low carbon. It is a great shame that once again the UK is embarking on a round of sub-standard house building approach that will deliver homes that lock people into high energy bills and are inconsistent with the commitments we have made to decarbonise.
  3. Really tackle the challenge to decarbonise heat through electrification, and where this is not possible, through decarbonisation of the gas network using biomethane, and hydrogen which could be manufactured using low cost renewable electricity.
  4. Build more energy storage – ideally for low carbon energy sources but yes, for as long as we have a reliance on natural gas, we need to store that too.
  5. Ensure we are integrated into the wider EU energy market – both physically through interconnection and through seamless energy markets.

Fossil fuel gas will continue to be an important, but rapidly reducing, part of the energy mix until the 2030s, there are however many ways to reduce our gas consumption and import reliance. The industry itself has come up with some excellent ideas[iv], for example increasing the deployment of heat pump technology as part of hybrid heating systems with a gas boiler for peak load backup. Regen’s analysis looking at the Swansea Bay City Region[v] suggests that, sized and used correctly, such hybrid heating systems would reduce household gas consumption by at least 70%.

We should also remember that climate change itself is predicted to become biggest risk to global energy, and indeed national security, as a major cause of weather events, supply chain disruption, resource scarcity  and human conflict. So tackling climate change is a key part of any energy security strategy.

An illusion of energy security

The key justification for the government’s support of the fracking industry is that, by diversifying the source of natural gas production, and in some part replacing the falling output from the UK’s North Sea oil and gas fields, unconventional gas could add to the UK’s energy security.

Of course having an alternative energy resource can add to long term energy security, that’s a point we have been making strongly about wind, marine energy and solar. But the idea that fracking provides a meaningful degree of energy security is flawed for a number of very fundamental reasons.

1) How much unconventional gas do we have? No one knows.

For a start, we really have very little idea about of how much unconventional gas could be commercially and environmentally viable. Early estimates of reserves were quite modest[vi]. More recent studies, including the British Geological Survey (BGS) survey[vii] of the Bowland reserve (which covers areas in the north and midlands of England and is the most quoted because it has some very big numbers), suggest “gas in place” volumes could be much higher. “Gas in place” volume should not however be confused with a measure of reserves (proven or unproven), nor is it anything like a measure of what could be technically or commercially recovered.

In fairness, government officials, and the BGS[viii], have been very candid about the lack of a reliable reserve estimate, and that commercial recovery rates could be a small fraction of reserve volumes. This uncertainty is not in itself a reason not to explore the possibility, but politicians need to be wary of adding to the hype that unconventional gas is the answer to the UK’s energy security risk.  Statements about unconventional gas providing energy security for decades to come, or protecting us from Putin[ix], are pure speculation.

2)  Cottage industry or industrialised sector?

Let’s suppose for the sake of argument that the UK does have significant unconventional gas reserves that could be exploited.

Proponents of fracking have been quick to draw evidence from the experience in the USA, where the extraction of shale oil and gas has had a dramatic impact on the energy sector and now provides a significant portion of the US domestic supply. The US market and method of extraction of shale gas is, however, very different to what we expect to happen in the UK. The picture below shows shale oil and gas wells in Wyoming. It’s an obvious point to make but what’s okay in Oklahoma or Wyoming may not be so okay in Cheshire, Lancashire or Surrey.

Wyoming
Oil and gas wells in Wyoming’s Jonah field (Pic: Ecoflight)

A further lesson we could draw from the US experience[x] is the phenomenon of “pop-up” wells, shale wells that operate only at times of high oil and gas prices and are then quickly mothballed when prices fall or when their productivity declines.

The image from Wyoming reveals an inherent contradiction in the pro-fracking argument. When we ask the question about the environmental and social impact of fracking, the answer that is presented is that this is essentially a cottage industry; low impact, environmentally benign, highly regulated with just few inconspicuous wells nestled in the English countryside which will soon be returned to its pristine state. However, when we ask the questions about what contribution fracking could make to the UK’s energy supply, the answer draws on extraction numbers that could only be delivered by a fully industrialised sector, lightly regulated to keep costs low, with potentially many thousands of well heads linked with an extensive distribution infrastructure. The two visions of a future fracking industry, one which could possibly be acceptable to society and another that would have a material impact on our energy supply, are not compatible.

A key unanswered question therefore is how many wells would the UK have to drill for fracking to reach the scale to materially contribute to the UK’s energy security? And would we ever be prepared to do that?

PNR
Lots of these across the English countryside? Preston New Road site

3) Maybe gas but only if the price is right

Most energy analysts are in agreement that the extraction and delivery of UK unconventional gas will be more expensive than the cheapest gas sources and that it will, in terms of price, be a marginal source of supply. This has implications for energy security.

If the society came to accept the industrialisation of fracking, whether the UK industry will develop at such a scale would depend on the future price of gas. At the moment, gas prices are rising, and once again people are talking a big game about the potential of unconventional gas resources. The long-term projection however, backed by industry expert economists like Dieter Helm[xi], is that oil and gas prices will inexorably fall over time as the world decarbonises.  In reality, what we are likely to see is extremely volatile gas prices as both gas demand and gas supply ratchets down the growth curve, exacerbated by the usual impacts of economic and political uncertainty and increasingly the impacts of climate change itself.

Given high price volatility, drilling and production activity for unconventional gas is likely to closely follow changes in the market price of gas. From an energy security perspective, this would not be such a problem if turning on supply was just a matter of turning the valve. Going back to the point about a “pop-up” industry, what we have seen in America however is periods when a large number of wells have been mothballed and new drilling needed to maintain field productivity ceases.  What we could see in UK, therefore, is an industry that expands and contracts depending on the medium-term gas price forecast. Not so good if our energy security risk is in the form of extreme weather events, short term supply issues and unexpected political crises.

4) It’s mainly about logistics

Politicians often present the case that energy security is all about access to energy resources. In the very long-term, geopolitical sense, that’s at least partly true, but for most energy security issues it’s more often about logistics. When an energy system responds to an energy crisis – an extreme weather event, a political crisis, unexpected supply curtailment – it’s not going to be about how much energy we have in the ground, it’s going to be about maintaining supply to the energy consumer.

The animation[xii] that the Government has posted in an attempt to convince us that fracking could be a benign industry actually reveals why fracking, as it is envisaged in the UK, cannot provide reliable energy security. The animation describes the process of exploratory drilling, production and, in due course, decommissioning. Watch carefully, you might miss it, but if you pause at around 3 min 20 secs, the animation describes the most critical stage in the process – getting the product to the market. The answer presented is to load the gas onto a road tanker (the gas is blue).

Animation
Yes seriously – apparently road tankers will be used to bring unconventional gas to market

Putting aside the environmental and safety issues of having potentially thousands of gas tankers on the road, this raises key logistical questions:

  • Where is the truck going? To a gas processing plant presumably, but where is that?
  • Given the low energy density of gas – how many gas tankers would we need?
  • Would the number of tankers flex to meet peak demand or price periods?
  • Presumably the gas would be pressurised – how much energy would that take?
  • Who’s going to invest in all these tankers? And what will they be doing if gas prices fall and gas production activity stops?
  • How could a distribution system reliant on road tankers possibly be cost effective?

So many questions, and a key one for energy security, how much gas could a gas tanker fleet realistically deliver during an energy stress event – another “Beast from the East”, for example.  Speaking from personal experience, having been in New York during Hurricane Sandy (2012) when the city ran out of fuel, despite having ample federal reserves of gasoline and diesel in New Jersey, the answer is probably not very much.

Why not a distribution network?

An obvious question is why the pro-fracking government is not actively proposing to build a gas distribution network to accumulate unconventional gas from multiple wells, linked to processing plants that will connect directly to the gas distribution network.

Proposing a new distribution network for unconventional gas would however be difficult:

  • For a start it would belie the idea that fracking is just a benign cottage industry. It’s going to be near impossible to get planning permission for well drilling let alone a new distribution network to support it.
  • Politically, and socially, it would be difficult to propose new infrastructure investment for an industry which is only meant to provide a transition fuel on the road to zero carbon.
  • It would also raise the question of who would invest in such infrastructure given the uncertainty around unconventional gas’ commercial viability and its long term future. So either the government would have to heavily subsidise the industry or agree to invest public funds.
  • The construction of a well to market distribution network may not be cost effective given that individual wells may have a relatively short productive life.

Given these fundamental issues you would wonder why the government and industry is interested in pursuing fracking. It is telling that major industry players – BP and Shell for example – don’t appear to be interested in fracking in the UK. The list of companies that have acquired exploration leases hardly inspires confidence in the sector.

If the UK fracking industry is doomed anyway does it matter?

Three people have already been jailed because they think it matters. As I write this they have just been released on appeal and returned straight to protesting. Trying to drive through a whole new sector in the teeth of public opposition and such strong civic activism is something policy makers should think long and hard about.

For initiatives like Green Great Britain Week to be taken seriously they must mean something. The UK desperately needs policy leaders to show a commitment to combat climate change and decarbonisation. Apart from the waste of policymaking resource and political capital, insistent support for fracking sends a very mixed and confused message.

 

Johnny Gowdy is a director at Regen. Regen is a not-for-profit centre of energy expertise and market insight whose mission is to transform the world’s energy systems for a low carbon future. He has worked extensively in the renewable energy sector, having previously worked as an energy consultant, where he specialised in logistics and the hydrocarbon supply chain.

Regen has responded to the government’s consultation on whether fracking should be allowed planning as a permitted development and whether shale gas production projects should be approved under the Nationally Significant Infrastructure Planning process. We don’t think it should. You can read our response here and others that wish to respond can find the consultations here and here.

Regen will be holding a session looking at the ethical issues facing the renewable energy sector at this year’s Renewable Futures Conference.

 

Notes and references

[i]https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/748489/CCC_commission_for_Paris_Advice_-_Scot__UK.pdf

[ii] BEIS fracking infographics and animations  https://www.gov.uk/government/publications/about-shale-gas-and-hydraulic-fracturing-fracking

[iii]https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/728374/UK_Energy_in_Brief_2018.pdf

[iv] See for example Project Freedom – https://www.westernpower.co.uk/projects/freedom

[v]https://www.regen.co.uk/publications/swansea-bay-city-region-a-renewable-energy-future/

[vi] British Geological Survey (BGS), 2010: 150 Bcm (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/367287/Shalegas_uk.pdf)

[vii]  BGS survey of Bowland-Hodder 2013 – central estimate of gas in place of over 23 thousand Bcm https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/226874/BGS_DECC_BowlandShaleGasReport_MAIN_REPORT.pdf

[viii] BGS website “Estimates of the amount of recoverable gas and the gas resources are variable. It possible that the shale gas resources in UK are very large. However, despite the size of the resource, the proportion that can be recovered is the critical factor. A better understanding of the shale gas resource, and the amount of gas that is potentially recoverable, will come from further geological research, such as that carried out by the BGS. If the amount of recoverable shale gas does prove to be large this will be a significant indigenous source of gas for the UK and may reduce our reliance on imported gas.”

[ix] The Times Claire Perry interview: ‘Why is fracking such a bad idea . . .   do we really want to rely on Putin?’

[x] The Financial Times has done an extensive piece on the US shale sector and lessons for the US – http://ig-legacy.ft.com/content/e178031e-2cf4-11e4-8105-00144feabdc0#ixzz3Ba0fe479

[xi] Dieter Helm “Burn Out : The End Game for Fossil Fuels”

[xii] You can see it hear – watch the trees disappear, all that’s missing is a Monty Python foot. UK GOV BEIS https://youtu.be/1lHC74fCyeI

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