Shale Gas

Memorandum submitted by Friends of the Earth (SG 21)

Friends of the Earth primarily approaches the question of whether shale gas is a good or bad energy supply option to exploit from a climate change perspective, although we recognise that there are other important considerations, such as groundwater pollution from the chemicals associated with hydraulic fracturing.

In December we published research [1] into global carbon budgets that identified that 1100 GtCO2e is the size of a global carbon budgets for a 70 per cent chance of avoiding a global average temperature increase of 2 degrees or more. If this budget is to be shared equally between nations based on average population between now and 2050 then the UK would need to reduce emissions by 80 per cent by 2030 from 1990 levels, the EU by 83 per cent and the USA by 95 per cent. China would need to peak its emissions by 2013 and then decline by 5 per cent per annum. These reductions rates assume no ‘negative emissions’ or other geoengineering techniques are deployed, which is clearly an issue for debate. The implication of our research is that we need a very fast transition away from a fossil fuel based economy towards a low carbon economy. It is within this context that we judge the utility or otherwise of shale gas.

We are aware from research by Chatham House that there are in theory very substantial reserves of shale gas, far greater than conventional gas [2] . Although the majority of this is in North America, Middle-East and China the quantities in Western Europe are not insignificant and may be greater than proven reserves of conventional gas. As the Chatham House report makes clear, shale gas has the potential to be a ‘game changer’ by opening up huge new sources of gas but whether and how much of the potential can be realised is not yet clear.

Friends of the Earth has concerns about the exploitation of these resources.

· Large amounts of shale gas could undermine investment in renewable energy in the UK and elsewhere. The UK has a 2020 target for renewable energy but no targets after 2020. Investors could be very nervous of investing significant money in offshore wind or other renewable power projects if it is not clear that there will be a guaranteed market for the energy after 2020.

· The Government’s draft National Policy Statements say there is only need for 18 GW of new non-renewable capacity. But there is however at least 14 GW of new gas either with consent, being built or in the pre-Infrastructure Planning Control (IPC) regime. On top of that there is already 20 GW of gas and nuclear applications in the current IPC system. This is 34 GW - way over the "needed" 18 GW, and a potential massive over-supply, which is likely to come at the expense of renewables. Gas is already threatening renewables investment, even before shale gas is considered.

· If the Government intends renewable energy to play a significant role in meeting its Climate Change Act obligations, and if it wants to build a world leading marine renewables industry, then it needs to set out clear expectations for offshore wind and other renewables over the next 30 years, and clear policies to ensure it is not swamped by investment in other types of capacity. It also needs to put in place the appropriate long-term support framework to enable investor confidence. A well-funded Green Investment Bank is a clear priority.

· Friends of the Earth recognises that available data suggests that the carbon footprint of shale gas is smaller than that of coal used in electricity production, although it is higher than that of conventional gas [3] . Therefore if shale gas was to displace existing coal electricity generation then there would be a net carbon reduction. However, as some coal is being displaced anyway via the LCPD, new shale gas would more than likely be displacing other types of electricity generation such as renewables.

· The emissions reduction rates required to meet the Climate Change Act are very significant. The Committee on Climate Change has suggested that the carbon intensity of electricity generation should be reduced to 50gC02/KWh. The Government has said that any emissions performance standard would apply to coal-fired power stations and not to gas. Without a clear policy requirement to achieve the 50gCO2/KWh target there is a risk that shale gas exploitation could lead to the development of many more gas-fired power plants and jeopardise the meeting of the target recommended by the Committee on Climate Change.

Friends of the Earth therefore recommends that the Government put in place the following policies before any shale gas projects are considered:

Within its National Policy Statements:

· Accept the Committee on Climate Change recommendation that electricity generation by 2030 must have a carbon intensity of no greater than 50gCO2/KWh

· Set a limit for GW of consented new fossil fuel-fired generation compatible with this target

· Provide a clear expectations for renewable energy generation in 2025, 2030 and 2040,

· Rule out all new coal-fired power stations regardless of whether they have CCS, and set a date for the closure of existing plant.

Within its Market Reform work:

· Put the 2030 decarbonisation target centre-stage

· Put in place the appropriate long-term support framework to build investor confidence in renewables

· Put in place a stronger Emissions Performance Standard to cover gas-fired power plants at a date necessary to achieve the 50gCO2/KWh target.

Once these policy measures are clear then the role of gas in future energy needs will be clearer. Shale gas should only be part of the supply if need is clearly proven and if extraction can meet high environmental standards, such as no contamination of groundwater and low local environmental impacts. Until then there should be a presumption against shale gas exploitation.

January 2010