A Fracking Good Time Will Be Had By All?

DECC's announcement on December 13 that the moratorium on hydraulic fracturing was to be lifted has spawned a flurry of comments - so I thought I'd join in.

This announcement follows the earlier publication of DECC's "Gas Generation Strategy" which purports to address the importance of gas as a feedstock for a low carbon economy (meaning lower than a coal-fuelled one, I guess). Among other things, the strategy proposes
(i) encouraging the construction of up to 26GW of new gas-fired power plant by 2030;
(ii) subsidising R&D into CCS;
(iii) focusing on the development of shale gas reserves in the UK.

On the latter, the strategy lists a number of steps to be taken by DECC, including
(i) setting up an Office of Unconventional Gas and Oil aimed at providing a one-stop-shop for an efficient regulatory process;
(ii) improvement in DECC's development policy and guidance to ensure that onshore licensing arrangements complement long-term shale gas production;
(iii) opening up a dialogue with interested license holders to explore what changes to the licensing regime are necessary;
(iv) further consultation rounds on the environmental implications.
This all seems a bit like DECC bending over backwards to aid the fracking industry - coupled with the likely bringng forward of a special tax regime to incentivise and stimulate shale gas production.

At the macro level, shale gas or no shale gas, up to 26GW of new gas-fired power generation looks set to bust the UK's target for a largely decarbonised grid by 2030 - unless they are all fitted with efficient and reliable CCS and I have my doubts that this will happen. How much of the required gas could be from indigenous shale sources is open to considerable doubt. The British Geological Survey has been commissioned by DECC to estimate how much might be available. Initial reports suggest that it will conclude that the Bowland basin has reserves roughly 17 times the known remaining North Sea reserves. How much will be economically recoverable is another matter.

There's also been a fair old push back on the risks of seismic activity being triggered and of water contamination. For sure these have been massively overstated by some pressure groups and good technology should be capable of dealing with the latter. However, one could argue that one leaking well is one too many.

I guess what I'm trying to say is - no matter how much hot air is generated by the fracking debate, the big issue is the continuing reliance on gas-fired power generation. I think we're sleep-walking to a +4C world and whatever that entails.