Shale Gas - Energy and Climate Change Committee Contents


Shale gas resources in the UK could be considerable—particularly offshore—but are unlikely to be a "game changer" to the same extent as they have been in the US, where the shale gas revolution has led to a reduction in natural gas prices. UK domestic shale gas resources could be used to increase our self-reliance, but they are unlikely to have as large an impact on our security of supply due to the limited extent of the resource. Elsewhere in Europe the impact of shale gas could be considerable; for example, Poland has potentially large shale gas resources, and the development of a Polish shale gas industry could reduce the extent to which Poland relies on imported natural gas. It is important for the UK to monitor the development of the fledgling shale gas industry in Poland, in terms of both our own prospects and the evolution of national and EU regulation in reaction to the development.

UK legislation needs to take account of the challenges unique to shale gas exploration and production; specifically the use of large volumes of hydraulic fracturing at multiple wells, which requires large volumes of fresh water and chemicals, as well as generating large volumes of waste water requiring treatment. There is no evidence that the hydraulic fracturing process poses any risk to underground water aquifers provided that the well-casing is intact before the process commences. Rather, the risks of water contamination are due to issues of well integrity, and are no different to concerns encountered during the extraction of oil and gas from conventional reservoirs. However, the large volumes of water required for shale gas could challenge resources in regions already experiencing water stress.

The Environment Agency needs to ensure that companies declare the type, concentration, and volume of all chemicals added to the hydraulic fracturing fluid. The Agency must ensure that they have the resources necessary to detect these chemicals in water supplies should an incident lead to potential contamination of water resources.

Shale gas has the potential to shift the balance in the energy markets that the Department of Energy and Climate Change has tried to create away from low carbon electricity generation. The UK needs to manage this risk if its aim is to increase the proportion of the UK's energy from renewable sources. DECC should revisit the assumptions it has made during its considerations of reform to the electricity market.

The increased availability of natural gas through the production of shale gas could lead to a switch away from coal electricity generation to gas. This would be a positive move, particularly in terms of its potential to reduce future emissions from developing economies. But DECC needs to be cautious in its approach to natural gas as a transition fuel to a low carbon economy. Although gas emissions are less than coal, they are still higher than renewables. The emergence of shale gas—and the likelihood that it will lead to the increased use of gas in power plants—means that we need to pursue with increased urgency the development of carbon capture technology suitable for gas as well as coal.

The environmental and climate risks posed by shale gas need to be balanced with its potential contribution to energy security. On balance, we feel that there should not be a moratorium on the use of hydraulic fracturing in the exploitation of the UK's hydrocarbon resources, including unconventional resources such as shale gas. However, DECC needs to monitor closely the current exploratory activity in the Bowland Shale in order to both assess the likely impact of large scale shale gas extraction in the UK and also to promote public confidence in the regulation of this activity.

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Prepared 23 May 2011