7th September 2022
Charles McAllister, Director of UK Onshore Oil and Gas said:
“We thank the Climate Change Committee and the National Infrastructure Commission for their recognition that increases in UK natural gas production would increase UK energy security and we completely agree that the UK cannot address this crisis solely by increases in natural gas production. However, shale gas can deliver more energy per acre per year than most other energy technologies and is therefore a critical element as part of a wider energy mix including renewables and nuclear. It is not an either or.
The failure to develop the abundant natural gas resources under the North of England locks the UK into reliance on more carbon intensive and more expensive imports for decades. Analysis from the CCC concluded that UK shale gas production could save up to 11.5 million tonnes CO2e in the year 2035 alone compared to reliance on LNG imports.
It is also our position, consistent with the letter, that Government should ‘act at pace to resolve barriers to deployment of strategic energy infrastructure’. UK shale gas is evidently of strategic geopolitical importance.
However, we contest that the UK’s gas reserves are too small to have an impact on prices for UK consumers. At a 10% recovery rate, there are sufficient potential onshore natural gas reserves to fuel UK gas demand for 50 years at current rates of consumption.
We have made our position very clear that there are three ways UK shale gas production can reduce prices for UK consumers:
Firstly, we can reduce gas prices for residents local to our sites through our community benefits package. Polling by YouGov showed that a majority of residents in Northern England would back fracking if they received 25% off their energy bills.
Secondly, the tightness in LNG markets over the next decades has been forecast to grow significantly, meaning the UK will have to outbid any of the 43 nations at present that import LNG if we continue down the ‘fingers crossed’ approach to gas supply. The more self-sufficient the UK is, the less we have to send up high price signals to attract these tankers.
Thirdly, UKOOG’s members would be willing to engage to sell UK shale gas to proximal blue hydrogen production facilities of the future at contracted prices. Doing so is not unprecedented nationally or internationally.
The letter unjustifiably ignores the wider economic benefits of UK shale gas production including billions of pounds of investment in the UK, tax revenue, tens of thousands of well-paid and skilled jobs, a chance to level up the UK economy and billions in local community benefits.
Modelling from the CCC has shown categorically that the UK will continue to need natural gas in the transition to and at the outcome of a net zero economy. The question is, where do we get that gas from? Imports offer none of the evident benefits offered by UK shale gas.”
-ENDS-
