Memorandum submitted by The Co-operative
1. The Co-operative is a unique family of businesses,
jointly owned and democratically controlled by over 6 million
members. We are the fifth largest food retailer, the third largest
retail pharmacy chain and the number one provider of funeral services
in the UK. We also have strong market positions in banking and
insurance. The Co-operative employs 120,000 people, and has around
4,800 retail outlets and branches.
2. Taking a responsible approach to business
has been a guiding principle of The Co-operative since its inception.
We are proud to have led UK business in our approach to combating
3. The Co-operative's approach to addressing
the issue of climate change is five-fold, embracing: energy efficiency,
support for renewable energy, carbon offsetting, the provision
of finance, and influencing public policy. This begins with ensuring
sustainable business operations:
- Between 2006 and 2009 (the latest year for which
data is available). The Co-operative achieved an absolute reduction
of 21% in its operational greenhouse gas emissions.
- By 2012, we will generate 15% of our energy requirements
from sustainable sources, including from our wind farm at Coldham
in Cambridgeshire and other schemes under development.
- During 2009, over 98% of our electricity was
sourced from good quality renewable sources.
- We've made combating climate change a community
investment priority. For example, we've invested £2 million
in our Green Energy for Schools programme and we're supporting
the development and financing of community owned renewables across
the length and breadth of the UK.
4. Strong business credentials in the UK have
allowed The Co-operative to lead on public policy initiatives
to combat climate change. This includes involvement in campaigns,
such as the Big Ask in 2007, which resulted in the Climate Change
Act 2008 becoming law. We are also currently campaigning against
tar sands development in Alberta, Canada.
5. In order to inform its position on shale gas,
The Co-operative commissioned The Tyndall Centre to investigate
issues including its carbon footprint relative to conventional
gas, scenarios for shale gas exploitation (and resulting greenhouse
gas emissions) for global and UK development, and other environmental
impacts potentially associated with the extraction process. The
report, entitled "Shale gas: a provisional assessment
of climate change and environmental impacts", can be
downloaded from www.tyndall.ac.uk/shalegasreport. The contents
of this submission are based on the findings of this report.
6. While, currently, information on the shale
gas extraction process and its associated potential environmental
impacts is patchy, a number of issues of concern were raised within
- At a global level, shale gas represents a potentially
very significant new fossil fuel source, that in the absence of
a global emissions cap is likely to lead to increased greenhouse
gas (GHG) emissions.
- Within the UK, the expansion of the shale gas
industry is, at best, not in the spirit of UK climate change policy
and, at worst, may act as a disincentive to investment in zero
carbon energy sources such as renewables.
- At the local level, research from the United
States (US) has revealed a number of chemicals involved in, and
mobilised by, the hydraulic fracturing extraction process that
have potential human health impacts via the contamination of groundwater
(e.g. toxicity or carcinogenicity).
7. It is for the reasons stated here, and
further expanded below, that The Co-operative recommends a complete
and immediate moratorium on UK shale gas extraction until the
risks have been properly evaluated and can be shown to be fully
Question 1: What are the prospects for shale gas
in the UK, and what are the risks of rapid depletion of shale
8. In order to examine the potential impact
of shale gas in the UK, four scenarios were developed in the research:
two assuming the amount of shale gas produced correlates with
the figure provided by DECC (2010) - 150 billion cubic metres
(bcm); and two that assumed double this (300bcm). The two 300bcm
scenarios reflect the experience in the US where shale gas estimates
have been revised upwards year on year (for example in 2008, the
US Energy Information Administration (EIA) estimated the US technically
recoverable shale gas resource at 3,539bcm and then revised this
upwards in each of the successive years, with the latest 2010
assessment at 23,427bcm (EIA 2010b)).
9. For both the 150 and 300 bcm scenarios,
two different rates of extraction were used: one based on a Hubbert
type curve (a bell curve) that is often used as an approximation
for resource extraction, which sees a rapid increase in production
followed by a rapid drop in production; the other based on the
kind of growth rates that are predicted for the US by the EIA
(EIA, 2010b). The four scenarios are plotted below in Figure 1.
SHALE GAS PRODUCTION IN THE UK UNDER FOUR
10. All four scenarios see the majority of shale
gas being exploited before 2050 and the cumulative emissions associated
with the use of this shale gas ranged from 284-609 MTCO2
over the period 2010 to 2050. To give this some context this amounts
to between 2.0 to 4.3% of the total emissions for the UK under
the intended budget proposed by the UK Committee on Climate Change.
Assuming that the carbon budget is adhered to, this should not
result in additional emissions in the UK. For example, it is possible
that UK produced shale gas could substitute for imported gas,
although it would not negate the need for imports.
11. It is also possible that extracting additional
fossil fuel resources could put pressure on efforts to adhere
to our carbon budget by reducing gas prices and directing investment
away from renewables and other low or zero carbon energy sources.
It is also important to note that in a market led global energy
system where energy demand worldwide is growing rapidly, even
if shale gas were to substitute for imported gas in the UK, leading
to no rise in domestic emissions, it is likely that this gas would
just be used elsewhere, resulting in a global increase in emissions.
12. Within the UK, shale gas could theoretically
substitute for coal and thereby reduce emissions. However, with
a carbon budget in place, coal (without Carbon Capture and Storage
(CCS)), is likely to be phased out anyway - shale gas is not required
to make this happen. Given the radical reduction in emissions
required and the need for a decarbonised electricity supply by
Developing shale gas would risk being a major distraction from
transitioning to a genuine zero-carbon grid. Given the investment
in infrastructure required to exploit these resources there is
the danger of locking the UK into a number of years of additional
gas use, leaving unproven CCS, as the only option for lower carbon
electricity. Consequently, this investment would be better made
in real zero-carbon technologies that would provide more effective
long-term options for decarbonising electricity supply.
Question 2: What are the implications of large
discoveries of shale gas around the world for UK energy and climate
13. In order to examine the potential impact
of shale gas on global GHG emissions, three scenarios were developed
in the research. The starting point for the global scenarios is
an estimate for the global reserves of shale gas taken from a
report by the US National Petroleum Council (NPC, 2007). Three
scenarios were then developed assuming that differing proportions
of the total resource are actually exploited (10%, 20% and 40%).
Assuming that 50% of this resource is exploited by 2050, these
scenarios give additional cumulative emissions associated with
the shale gas of 46-183 GTCO2, resulting in an additional
atmospheric CO2 concentration of 3-11ppmv.
14. The argument that shale gas should be exploited
as a transitional fuel in the move to a low carbon economy seems
tenuous at best. If we look at the US, there is little evidence
that shale gas is currently, or expected, to substitute for coal
(see for example projections within "change in US primary
energy sources 2008 to 2035" within EIA (2010a)). It is possible
that some level of substitution may occur in other countries but,
globally energy use is growing and, without a meaningful constraint
on carbon emissions, there is little price incentive to substitute
for lower carbon fuels. It is difficult to envisage any situation
other than shale gas largely being used in addition to
other fossil fuel reserves and adding a further carbon burden.
This could lead to an additional 11ppmv of CO2 over
and above expected levels without shale gas - a figure that could
rise if more than 50% of the total shale gas resource were to
15. The idea that we need transitional fossil
fuels is itself open to question. For example, in the International
Energy Agency scenario that outlines a path to 50% reduction in
carbon emissions by 2050, fuel switching coupled with power generation
efficiency only accounts for 5% of the required reductions (IEA,
2010). If globally we are to achieve the considerable reductions
in carbon emissions that are required then it is energy efficiency,
CCS, and renewable energy that will make the difference.
16. At the global level, against a backdrop of
energy growth matching, if not outstripping, that of global GDP
and where there is currently no carbon constraint, the exploitation
of shale gas will most likely lead to increased energy use and
increased emissions resulting in an even greater chance of dangerous
climate change. While for individual countries that have a carbon
cap, for example in the UK, there may be an incentive to substitute
shale gas for coal, the likely result would be a fall in the price
of globally-traded fossil fuels leading to an increase in demand.
Consequently, there is no guarantee that the use of shale gas
in a nation with a carbon cap would result in an absolute reduction
in emissions and may even lead to an overall increase.
Question 3: What are the risks and hazards associated
with drilling for shale gas?
17. A key risk associated with shale gas extraction
is the potential for contamination of groundwater. From the limited
evidence available from the US, it appears that the fluid used
in hydraulic fracturing contains numerous chemical additives,
many of which are toxic to humans and/or fauna. Concerns that
the fracturing process could impact on water quality and threaten
human health and the environment have prompted the US Environmental
Protection Agency (EPA) to instigate a comprehensive research
study into the issue, within initial findings expected by the
end of 2012. While awaiting the results of this study, New York
State has introduced a moratorium on any new wells.
18. Groundwater pollution could occur if there
is a catastrophic failure or loss of integrity of the wellbore,
or if contaminants travel from the target fracture through subsurface
pathways. The risks of such pollution were seen as minimal in
a study by ICF International (INGAA, 2008); however, this assessment
was based on an analysis of risk from properly constructed wells.
History tells us that it is rarely the case in complex projects
that mistakes are never made and the risk of groundwater pollution
from improperly constructed wells also needs to be considered.
19. The dismissal of any risk as insignificant
is hard to justify given the documented examples that have occurred
in the US, seemingly due to poor construction and/or operator
error. These examples have seen high levels of pollutants, such
as benzene, iron and manganese, in groundwater, and a number of
explosions resulting from accumulation of gas in groundwater.
20. While it may not always be possible to pinpoint
the exact cause of groundwater contamination, identifying the
source for land and surface water pollution is more straightforward.
There are a number of potential sources of pollution including:
well cuttings and drilling mud; chemical additives for the fracturing
liquid; and flowback fluid - the liquid containing toxic chemicals
that returns to the surface after fracturing. There are numerous
routes by which these potential sources can cause pollution incidents
including failure of equipment and operator error. Unsurprisingly,
a number of incidents have been reported in the US.
21. Shale gas extraction requires significant
amounts of water. Analysis provided by the Tyndall Centre suggests
that to carry out all fracturing operations on a six well pad
takes between 54-174 million litres of water over its lifetime,
which is equivalent to about 22-69 Olympic size swimming pools
of water. If the UK were to produce 9bcm of shale gas each year
for 20 years (approximately 10% of annual consumption) this would
equate to an average annual water demand of 1,300-5,600 million
litres. This compares with current levels of abstraction by industry
(excluding electricity generation) of 905,000 million litres.
Shale gas exploitation at this level would therefore increase
abstraction by up to 0.6%. While this appears to be a small additional
level of abstraction, a number of points need to be made:
- This assumes the water demand is spread evenly
over the whole country. Clearly actual water requirements will
be focused in the areas where shale gas is being extracted and
this could add a significant additional burden in those areas;
- Water resources in many parts of the UK are already
under a great deal of pressure, making additional abstraction
- The impacts of climate change may put even greater
pressure on water resources in the UK.
22. Given that the water is mainly used over
a short period of time during initial fracturing, the most likely
means of getting this water to the site in the UK would probably
be by truck or abstraction.
23. For the UK, high population density and the
likely proximity of wells to population centres could result in
exacerbation of impacts such as noise pollution, traffic, and
landscape degradation. Further information on assessment of these
potential impacts is contained within the Tyndall Centre report
on pages 69 and 70.
Question 4: How does the carbon footprint of shale
gas compare to other fossil fuels?
24. It is assumed that the direct GHG emissions
associated with the combustion of shale gas will be the same as
gas from conventional sources. In considering the UK, the distribution
of shale gas would be the same as conventional gas and therefore
subject to the same losses. This means that the main difference
between shale and conventional gas is likely to be from emissions
that arise from the differing extraction processes. The limited
verifiable data available makes assessment of these extraction
emissions problematic. However, it was possible, using data on
expected emissions from the Marcellus Shale in the US, to estimate
the likely emissions associated with the different processes that
occur in extracting shale gas compared to natural gas.
25. Estimated emissions are associated with a
number of processes:
- Horizontal drilling;
- Hydraulic fracturing and flowback;
- Production of chemicals used in hydraulic fracturing
(these emissions are unknown and have not been included);
- Fugitive methane emissions during fracturing
(these emissions are unknown and have not been included);
- Transportation of water;
- Transportation of brine; and
- Waste water treatment.
26. The combination of emissions from these processes
gave an estimate per well of 348-438tonnes CO2e. This
figure will increase if the well is refractured, something which
could happen up to 5 times, the DECC (2010) report suggests that
refracturing could happen every four to five years for successful
27. The significance of these emissions is dependent
on the rate of return for the well - something which is site specific.
Looking at examples of expected total production for shale basins
in the US it has been estimated that, on average, the additional
CO2e emissions associated with the processes above
account for between 0.14-1.63tonnes CO2e/TJ of gas
energy extracted. The value depends on the total amount of gas
that is extracted per well and the number of times it is refractured.
Examining the UK in particular, although the rate of return per
well is not quoted for UK basins, it is thought that additional
CO2e emissions per well would be at the higher end
of estimates compared to the US, as economies of scale are against
28. Given that during combustion, 1TJ gas would
produce around 57tonnes CO2, the additional emissions
from the shale gas extraction processes identified represent only
0.2-2.9% of combustion emissions. However, similar to conventional
gas there will be some further emissions associated with processing,
cleanup and distribution.
29. These relatively low levels of additional
emissions suggest that there would be benefits in terms of reduced
carbon emissions if shale gas were to substitute for coal. Combustion
of coal produces around 93tonnes CO2/TJ. Clearly even
with additional emissions associated with shale gas, the emissions
from gas would be considerably lower. The benefits increase when
the higher efficiencies of gas fired power stations compared to
coal fired power stations are considered.
30. However, as noted above in our responses
to questions one and two, there are concerns that at a UK level,
shale gas could displace investment in renewables, and at a global
level could simply lead to increased greenhouse gas emissions.
Therefore, the straightforward comparison of the carbon footprint
of shale gas relative to coal is not the appropriate way to analyse
Committee on Climate Change (2010) The Fourth Carbon
Budget: reducing emissions through the 2020s.
DECC (2010) The Unconventional Hydrocarbon Resources
of Britain's Onshore Basins - Shale Gas.
Energy Information Administration (2010a) Supporting
materials for the 2010.
Annual Energy Outlook, Report #: DOE/EIA-0554(2010),
Release date: 9 April 2010.
Energy Information Administration (2010b) Annual
Energy Outlook 2011: early release overview. Published 16 December
INGAA (2008) Availability, economics and production
potential of North American Unconventional Natural Gas Supplies
Prepared for The INGAA Foundation, Inc. by: ICF International
9300 Lee Highway Fairfax, VA 22031 USA Authors: Harry Vidas and
Bob Hugman Copyright ® 2008 by The INGAA Foundation, Inc.
National Petroleum Council (2007) Topic Paper #29:
Unconventional Gas, working document of the NPC Global Oil and
Gas study, made available 18 July 2007.
13 The Committee on Climate Change has suggested that
electricity will need to be effectively decarbonised by 2035 (Committee
on Climate Change, 2010). Back