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Osborne says gas bills will go down – but do we believe him?

Blue flames of a gas stove by Marina Burity from Santo André, Brazil, licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license, file at Osborne, ever anxious to shoot Labour’s fox, has attempted to counter Ed Miliband’s hugely popular call for a lengthy energy price freeze. He has proclaimed that the market can do better – by covering much of the country with shale gas drilling rigs. That will dramatically lower gas prices, as it has in the US. Except it won’t.

What will actually happen if shale gas drilling does go ahead is very different indeed. The big UK companies will pump more gas through the Interconnector pipeline to Belgium in order to take advantage of higher prices within the EU. Unless, that is, the government intervenes to direct the domestic gas market, something which they’re ideologically opposed to at any cost.

But there are other reasons too why the comparison with the US is rather facile. Environmental regulations here are, rightly, much more strict than in the US. Public opposition here, as the early examples of Balcombe in Sussex and Barton Moss in Greater Manchester show all too clearly, is much more widespread and determined in the UK. Capital markets in the UK are not used to funding high-risk petroleum exploration activities as they are in the US. The UK onshore service industry is much less well developed compares with the US.

So the UK shale bonanza is much less than might be imagined by simple extrapolation from the US. True, the UK is reckoned to be sitting on 26 trillion cubic feet of technically recoverable shale gas resources. But that compares with 1,115 tr. cu. ft. in China, 802 in Argentina, 707 in Algeria and 665 in the US. The UK comes 12th down the list. Moreover most of the UK shale gas is in the ‘wrong’ place, in the middle class south and east of the country rather than in the working class ‘desolate north’, so that disrupting the rural idylls in so many Tory constituencies may prove a much tougher nut to crack than anticipated by the profit-driven shale exploiters.

Then there are the significant environmental downsides. There is evidence that the chemicals used will contaminate underground water aquifers, though allegedly this shouldn’t happen if the process is well-regulated and the wells are completed to a proper standard. But will they be?

This government is notoriously anti-regulation, and anyway will be under strong pressure by the frackers to run a regulation-lite regime. There is also the considerable disruption caused by large HGV lorries bringing in the fracking fluid. There are the ‘fugitive’ methane emissions generated by the fracking process, which is important since methane is 21 times more potent than CO2 as a greenhouse gas, and it is worrying that there is no clarity about how great is the level of these methane emissions. Above all, shale gas like conventional gas is a hydrocarbon, so burning it increases greenhouse gas emissions and thus exacerbates climate upheaval.

Drilling for shale gas is the wrong solution when Britain has such enormous renewable energy resources. And these are still hugely untapped.

One Comment

  1. Robert says:

    Tell me do labour think we are all stupid, labour were in power for three terms why the f*ck did they not sort this out after all they saw the rise to the top with Miliband as Minister and it was brown who had to speak for miliband and they both did F*ck all.

    Now then labour want to cap gas and electricity for twenty odd months , what happens if they capped it at the top most expensive , you know when most of us sick disabled and poor are living under labour cap on benefits and the unemployed and the people working for the public sector, capping it at the top for twenty months will see a lot of people maybe die in a cold snap and why is it going to take the Union hater twenty months to sort this out.

    Well of course labour are talking for the middle class those poor people who cannot afford like politicians on £64,000 a year and urgently need caps on power and rises.

    I cannot afford to put on my gas central heating now capping it does not make it cheaper when it is actually falling check it your self it’s going down not up.

    labour a middle class party of the blue kind

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