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Is fracking the energy Eldorado?June 2014

Protestors have attempted to turn David Cameron’s Oxfordshire home into a fracking site - proposed government reforms to the ‘fracking’ bill in the Queen's speech are indeed contentious. The challenges around energy generation should be in the public mind, but is the focus on fracking detracting from other potential solutions to such a complex problem?

The reforms would allow firms more extraction and distribution rights with the objective of expediting the development of the industry (Greenpeace are thus concerned about changes to trespass laws leading to unwelcome fracking under private properties—“as ministers chase their imaginary energy Eldorado, the real solutions to boost our energy security, like slashing energy waste and backing renewables, are being sidelined”*).

Aside from the concern of property-owners who feel they’re at risk, the unintended consequence of wide-scale fracking might arguably be a reduction in the much-needed development of a renewable technology market for the 26 million existing homes that are using traditional heating technologies.

Fuel security and the development of local fuel supplies are key political issues, and sensitivities are high with the next election not far away on the horizon. Relying on a neighbouring nation for their fuel supply and the potential political compromise that could result from such a relationship is an unappealing one—something the government might hope to avoid by the extraction of shale gas at a wide variety of sites across the UK.

Looking at the US shale gas revolution, one is tempted to draw simple conclusions. For example, that shale gas extraction will bring the cost of fuel down significantly. It is true that in the US where fracking is already taking place at a large commercial scale there have been savings of up to 40% in consumer pricing. However the conditions of extraction are different in Europe than in the US. The fuel layers are located much deeper; the regulatory constraints are higher and the workforce is more costly.

Shale gas extracted in the UK will be part of the European supply “pot” and will be traded on the EU market. It is likely that it will help stabilize the gas prices but not necessarily bring them down significantly. The US shale gas revolution has also taken nearly 30 years to come to its effective stage where it really impacts the US economics and consumers everyday life. It will probably take half of the time in the UK but we still have some 15 years where we will increasingly be subject to fuel imports and volatile energy prices.

Does it all sound negative? No, the point is about establishing the right picture before taking too simplistic a view either way. It’s not helpful for the public or our industry to feel that we are either just round the corner of a relatively cheap fuel supply, or on the other side of the coin, in danger of our properties collapsing under an unstoppable fracking dystopia.

Visions of fracking as the perfect solution would most probably lower installers' and home owners' interest to move towards the use of renewable technology. There are in the region of 1.5m boilers installed in the UK each year, around 150,000 are fitted into new build properties. The majority of the 1.3m boilers fitted in the existing housing stock are purchased as a distress purchase when the existing boiler has fired for the last time or moving beyond economic repair. In relative terms the replacement of a boiler with a comparable boiler is a cost effective option for home owners compared to the introduction of a newer technology.

The government also has an ambition of reducing carbon emissions and it needs a clear policy and a strong strategy for addressing the existing stock as well as new build heating systems. Fracking is very much needed to boost the UK economy and European security of energy supply but efficiency and control of energy usage will remain increasingly important.

Energy prices will keep rising in the foreseeable future and our energy supply will be under pressure. In other words, renewables are needed from political as well as from consumers “everyday life” perspective.

Let’s not forget about it and get carried on the wave of political enthusiasm for “cheap” shale gas.

* Simon Clydesdale, Greenpeace UK energy campaigner, David Cameron’s house ‘fracked’ by protesters, 4th June, The Telegraph


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