Shale Gas Unlikely to Reduce Energy Bills as Government 'Oversells' Benefits of Fracking

The UK government has "oversold" the potential of fracking, with shale gas unlikely to make Britain self-sufficient in gas.

Research from the UK Energy Research Centre (UKERC), a government-funded body, found that the country's shale gas reserves are unlikely to reduce consumer energy bills and encouraged officials to invest in gas storage facilities to prevent price spikes.

"Where the government has gone wrong is just talking this whole thing up... as if it was going to reduce consumer bills and tackle our energy security problems in a substantial way any time soon. I think that was very premature. The framing of it was oversold," said the UKERC director, professor Jim Watson.

The UK government has been extremely supportive of the nascent fracking industry, particularly in the wake of the crisis in Ukraine which could reduce access to Russian natural gas.

The majority of the UK's gas still comes from the North Sea and while it's thought that just 1% comes directly from Russia, Russian gas giant Gazprom estimates that this figure could be revised up to 15%, when you factor in peak-time imports from Germany and other European countries, which are indirectly Russian.

He said that critics display a "lack of understanding" and that he wanted the first shale gas wells to be up and running this year.

In a speech earlier this year, he said: "A key part of our long-term economic plan to secure Britain's future is to back businesses with better infrastructure. That's why we're going all out for shale. It will mean more jobs and opportunities for people, and economic security for our country."

The government has offered substantial tax breaks for fracking companies and opened proceedings for firms to apply for licences to frack across Britain.

However, the report, entitled the UK's Global Gas Challenge, discouraged the government from investing too heavily in fracking, given the need to wean the world off fossil fuels. By the time the UK's shale industry was reaching its peak (2025), the planet may have reached dangerous levels of warming.

It also disparaged efforts to link the UK's shale industry with that in the US, where the "shale gas revolution" has been much heralded. The authors said the US has not earned a quick buck, but rather the boom is the result of years of investment and research.

"The industry in the US likes to proclaim the rapid development of unconventional oil and gas production as an exemplar of the role of small and medium-sized operators and the benefits of the free market system; but, this is only the recent part of the story and the reality is that the US Government played a key role in the 1970s and 1980s by supporting basic scientific research and the development of technologies for hydraulic fracturing, and also by providing tax incentives to promote development," they wrote.

Opposition to fracking has been widespread, with campaigners concerned about small earthquakes, water table contamination, destruction of the countryside and the impact on house prices the controversial extraction technique could lead to.

Greenpeace UK energy campaigner Lawrence Carter told IBTimes UK: "With their wild-eyed promises about the imagined benefits of fracking, ministers have been skating on very thin ice for years, and now the ice has started to crack.

"The latest report is yet more evidence that shale gas won't have a significant impact on our bills and energy security. The obvious question then is, why would we want to risk our environment and climate for the sake of an industry that has little to offer to this country?

"Fracking is a massive distraction from the real job at hand, which is to move our energy system away from dangerous fossil fuels and towards the clean technologies the world's leading economies are investing in."

Despite this, the government has continued to fly the flag for fracking. On 12 November, the Business and Energy Minister Matthew Hancock spoke of plans to make the North West of England the hub for Britain's fracking industry.

Blackpool and the Fylde College is to be the named the national training centre for the fracking industry, with Hancock telling reporters: "Aberdeen has become a global hub for offshore oil and gas expertise. We want Blackpool to become the hub for expertise in onshore oil and gas."

Earlier in November, Hancock had said the country could face a £10bn import bill without pursuing fracking.

"The first duty of the Energy Department is to ensure the lights stay on. And the facts are clear, if we continue without shale our energy supplies will become less secure. We also have to bear in mind that Europe's major gas supplier does not always have our best interests at heart. When we started drilling for oil in the 1960s Russian troops were stationed in the Crimea. Today they're back," Hancock said.