Perhaps carbon capture was a better bet and one that might have helped justify fracking.
Source: The Independent
The Fantasy of an Economy
Transforming Pot of Gold
Perhaps Cameron and Osborne
imagined that fracking could be a re-run of the enormous boost that North Sea
oil gave to the UK economy of Margaret Thatcher. I recall the late Denis Healey
predicting in the late 1970s that whichever party came to power when North Sea
oil was about to come on stream would be in power for a generation. And so it
proved. Mrs Thatcher came to power in 1979 just before North Sea oil came on
stream, adding up to 10% to annual income (GDP) in the 1980s and 1990s. The
revenues were even sufficient to finance the disastrous economic policies that
resulted in the wholesale deindustrialisation of Britain in the 1980s and 1990s,
and even to allow the pretence that this
was all due to successful economic policy.
So it’s easy to understand why
the government of Cameron and Osborne should have looked at gas fracking not
just as a potentially secure and indigenous source of what is currently still
the dominant fuel in the UK economy, but as a macro-economic “get out of jail
free” card, to offset some of the economic damage wreaked on the UK and world
economies by an out-of-control financial and banking sector in 2008. The very
real success of fracking operations in the USA clearly encouraged this idea.
Unfortunately “geography will
out” as the government is now belatedly discovering. Sadly this was all too
evident at the time. Writing in 2013, and early in the progress of UK fracking
initiatives, Howard
Rogers of the Oxford Institute for Energy Studies summarised fracking
prospects[1] very succinctly as follows
“... the sobering conclusion
is that UK shale gas, given its timing and perhaps modest scale in terms of
production level, in no way changes the critical and pressing nature of UK
policy challenges and decisions needed between now and the end of the decade.”
“Geography” in this case is a
combination of geology, which determines a theoretical reserve and likely cost,
and population density, which amplifies the problems of secure extraction
without serious social and environmental costs. Unlike North Sea oil, the
fracking boom was never set to repeat the 1980s oil boom.
The UK government remains muddled
and inconsistent over whether or not to continue its support for fracking. It
has, according to the recent National Audit Office report
on Fracking for shale gas in England, no clear idea on how much it has
spent supporting fracking, what the benefits would be and how much investment
would be needed in future. Inter alia, the National Audit Office said ministers
could also not explain who would pay for clean-ups if fracking companies went
out of business.
The National Audit Office
(NAO) report highlighted:
- risks of the self-reporting system of shale gas regulation
- unprecedented public opposition to fracking planning applications and falling national support
- slower than predicted development of the industry
- lack of progress on carbon capture usage and storage (CCS) needed for shale gas to meet climate objectives
The Environmental Case ?
The last of these observations,
on the failure to progress carbon capture, is perhaps the most telling. Given
that we are now targeting zero carbon, natural gas, in principle at least, is likely
to be confined to a declining and transitional role[2]. Any environmental defence
of further gas exploration was therefore dependent on assurances that it would
not add to emissions, with carbon capture being one route to achieving this, at
least in part. It is therefore ironic that
the Cameron government should also have pulled the plug on carbon capture for
the UK, though only after the private sector had spent several hundred million
on it, and at severe cost to the reputation of the UK in terms of its ability
to follow through on commitments to energy industry investors.
Carbon capture is by no means an
ideal technology, partly because of the energy inputs it requires and partly
because it typically fails to capture 100% of CO2, a necessity in a zero carbon
world. But at least it may have had more potential as a transitional technology,
given the amount of fossil fuel based generation and other capacity that the
world currently has.
Lessons to be Learned
This episode is perhaps an excellent
illustration of what happens when governments take energy policy decisions not
driven by any realistic appraisal of environmental, climate or energy policy
needs, but by the impulse to gamble on a quick fix with a macro-economic and
political pay-off. Expert opinion was always sceptical, and environmentalist
opposition has been more than vindicated.
[2]
There are however possible options for synthesising gas as a means of chemical
storage to overcome the seasonal imbalances between renewable generation and winter
heating demands. But this is another story.
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