Environmental risks of fracking - Environmental Audit Contents

2  Implications for our climate change obligations


11. The Energy and Climate Change Committee's report on Shale Gas in 2011 concluded that "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."[18] Tom Burke of E3G told us that:

    If you do not go to scale, it is very hard to see how the costs of any gas produced could begin to compete ... The public acceptability will be a very strong issue for investors, as you move from exploration to scale, to question whether or not the prospects and the possible benefits are actually deliverable.[19]

12. In March 2014, E3G dismissed claims that shale gas could reduce energy prices in Europe: "Many of these [US] prevailing conditions do not exist in the EU and, as a result, EU production costs are expected to be 150%-250% higher per unit of gas extracted."[20] Grantham Research Institute told us that:

    Domestic shale gas reserves are likely to be too modest to affect gas market prices in the UK, which may remain largely driven by uncertain wholesale prices charged by foreign suppliers. A decrease in gas prices could have positive consequences for the UK economy, but could also affect the profitability of fracking, resulting in lower production.[21]

Similarly, Professor Paul Stevens believed that:

    There is the myth that if the UK were to have a shale gas revolution this would bring down the domestic price of gas in the UK. I find that argument extremely weak, not least because we are connected to the continent. Generally speaking … gas prices on the continent tend to be higher than here, so if you have an increase in gas supply from shale it is going to go to the continent rather than here.[22]

    … It is very unlikely that a shale gas revolution in the UK—assuming we can even have one—is going to bring gas prices down.[23]

Security of supply

13. Professor Paul Stevens concluded in December 2013 that:

    There are two ways in which energy security—defined as physical access to energy sources—can be enhanced by shale gas, at least in theory. First, it represents a diversification of gas supplies away from offshore UK production and imports by pipeline or LNG. … Second, shale gas represents a domestic source of energy.[24]

The Committee on Climate Change noted in 2013 that, although shale gas "should not mean a dash for gas" (paragraph 19), it:

    Can displace [Liquid Natural Gas] imports, improving the UK's energy sovereignty. Due to the decline in North Sea gas production, the UK is a net importer of gas, by pipeline (e.g. from Norway) and LNG (e.g. from Qatar)—UK shale gas production would reduce our dependence on imports and help to meet the UK's continued gas demand, for example in industry and for heat in buildings, even as we reduce consumption by improving energy efficiency and switching to low-carbon technologies.[25]

14. But many of those who provided evidence to our inquiry doubted the security of supply potential of UK fracking. Grantham Research Institute told us that "reserves could, at best, make up for the decreasing size of conventional domestic resources as reservoirs are depleting. But shale gas is unlikely to expand domestic gas availability beyond current levels, let alone render the UK energy-independent and free from the need to import natural gas."[26] The UK Energy Research Centre called promises of greater energy security from UK shale gas "hype" and "lacking in evidence."[27]

Climate change impacts

15. In their July 2014 progress report, the Adaptation Sub-Committee of the Committee on Climate Change stated that "The UK Government, together with others around the world, considers rises beyond two degrees to bring increasing risk of dangerous and irreversible impacts. By the end of the century, a 3.2°C to 5.4°C global rise above the baseline can be expected based on continuing emissions growth, with further warming into the next century."[28] The Climate Change Act's carbon budgets regime has set a framework for emissions policy since 2008. Between 2008 and 2012 the UK reduced its emissions by 22.5% against a 1990 baseline set by the Kyoto protocol (against a target of 12.5%). UK emissions rose by 3.5% in 2012,[29] but in 2013 fell by 2%.[30] In 2013, 5.2% of our energy was generated from renewables,[31] towards an EU target for 2020 of 15%. The EU has now set emissions reduction targets for the period to 2030,[32] pending a wider international UNFCCC agreement in Paris in 2015.

16. The first carbon budget (for 2008-12) under the Climate Change Act was met, substantially because of the economic slow-down after 2008, but the prospects for later budget periods are uncertain.[33] As we reported in our October 2013 Progress on carbon budgets report, there had been a risk to our longer term emissions reduction because of prolonged uncertainty over low-carbon investment caused by the prospect of a review of the Fourth carbon budget (for 2023-27)—announced in 2011 and undertaken in 2014.[34] We criticised the Government's reluctance to set a power sector decarbonisation target for 2030 in the Energy Act 2014.[35] In our report on Green Finance we identified a significant gap in low-carbon investment, with levels less than half the £20 billion a year required to meet decarbonisation targets.[36] We said that the Government's decision in July 2014 not to adjust the Fourth carbon budget[37] would bring greater confidence about the UK's future emissions reduction performance "provided … that the Government soon identifies the additional emissions reduction policies and programmes that will be needed to deliver against that budget."[38] We might have added another proviso, that additional fossil fuel sources were not encouraged.

17. A DECC commissioned report by Prof David MacKay (former DECC chief scientific adviser) and Dr Timothy Stone in 2013 found that the carbon footprint of shale gas extraction and use was comparable to that from gas extracted from conventional sources, but lower than the carbon footprint of coal.[39] The Secretary of State for Energy and Climate Change said at the time that:

    UK shale gas can be developed sensibly and safely, protecting the local environment, with the right regulation. And we can meet our wider climate change targets at the same time, with the right policies in place. Gas, as the cleanest fossil fuel, is part of the answer to climate change, as a bridge in our transition to a green future, especially in our move away from coal. Gas will buy us the time we need over the coming decades to get enough low carbon technology up and running so we can power the country and keep cutting emissions.[40]

18. Whether shale gas is "part of the answer to climate change", as the Secretary of State put it, depends on the key question articulated by Professor Paul Stevens: "What is it going to substitute for? Is it going to substitute for coal or is it going to substitute for renewables?"[41] He told us:

    If it replaces coal this might be regarded as a good thing, although it depends on what assumptions you make about fugitive methane emissions there. On the other hand, if it starts to replace renewables that is bad news.[42]

19. The Committee on Climate Change concluded that "Shale gas lifecycle emissions could be lower than those of imported LNG … and much lower than coal. … But it should not mean a 'dash for gas' in the power sector. Expanded use of gas for power generation is not needed to drive coal from the system, as most of the UK's coal plants are already due to close under EU air quality [Large Combustion Plant Directive] regulations."[43] In 2011, Tyndall Centre had concluded that:

    There is little to suggest that shale gas will play a key role as a transition fuel in the move to a low carbon economy … The need for rapid decarbonisation further questions any role that shale gas could play as a transitional fuel as it is yet to be exploited commercially outside the US. In addition, it is important to stress that shale gas would only be a low-carbon fuel source if allied with, as yet unproven, carbon capture and storage technologies.[44]

20. The Chartered Institution of Water and Environmental Management believed that:

    Shale gas, like other forms of gas, cannot be regarded as a low-carbon fuel source. Pursuing a more carbon based fuel strategy will make it more difficult to reach our climate change commitments and potentially our renewable energy targets … Gas will continue to play a part in our energy mix, especially for its role in heating, in the medium term, but measures to minimise lifecycle emissions will be needed.[45]

Grantham Research Institute believed that shale gas could have a higher carbon footprint than the production of natural gas from conventional sources,[46] but that the "main issue is not whether fracking would be compatible with the UK carbon budgets (to the extent that its potential may be modest, and emissions comparable to conventional gas), but rather whether the overall UK policy concerning gas—including conventional, unconventional and imported resources—is consistent with them."[47]

21. Professor Paul Stevens told us it would take 10 to 15 years "before there is any significant impact" from any potential shale gas extraction.[48] Whether shale gas could be a "bridging" energy source is not dependent on the level of emissions in 2025, 2030 or any other year, but rather its cumulative contribution over a number of years. The carbon budgets regime is founded on that cumulative approach. Dr John Broderick from the Tyndall Centre emphasised that our concern should be whether "we would be adding to the total burden that we place on the atmosphere and on the climate system".[49] He told us that:

    Cumulative greenhouse gas emissions largely determine the extent of climate change so the timescales of changes in the energy system, and the quantities of emissions during this period of change, matter a great deal. Any meaningful claim to gas being a 'transition fuel' must relate the time period of transition to the cumulative emissions released along the way and therefore the likelihood of dangerous climate change arising.[50]

22. Timing is an important factor. The carbon budget a decade from now—when fracking might be significant—will be tighter. Dr Broderick explained how this would limit the scope for shale gas:

    Consider the claim that the Bowland Shale contains sufficient gas to meet our current demand for gas for up to 51 years on the basis of 10% recovery rate. This amount could not be accommodated in the [Committee on Climate Change's] Interim budget when deductions are made for non-CO2 emissions from agriculture. In the UK, it is unlikely we would have commercial production of this scale (~80bcm p.a.) before 2025 even with favourable geology. The budget available from this date is equivalent to 3% to 4% of the central [British Geological Survey] gas-in-place estimate for Bowland shale.[51]

    [The] advised emissions reductions pathways from the Committee on Climate Change … is what matters—not the ultimate endpoint—the total quantity of emissions up to that point.[52]

Greenpeace believed that:

    Gas extracted in the UK won't displace other gas that's already been earmarked for extraction—it will just add to fossil fuels already being burnt, which we can't afford to do … A mature shale gas industry producing gas for domestic use would push the UK's carbon budgets to breaking point.[53]

23. Any pressure on carbon budgets from shale gas extraction will be exacerbated if that coincides with a squeeze on renewable energy. Professor Paul Stevens concluded in 2013 that:

    There is a serious danger that UK consumers, growing increasingly concerned about their domestic energy bills, may press for shale gas to substitute for renewables which they see (probably incorrectly) as being responsible for these higher energy bills. This would be bad news for carbon reduction targets if it had an impact on the drive for renewables.[54]

UK Green MEPs argued that shale gas is not needed and will not reduce carbon emissions, but distract from commitments to renewable energy.[55] Grantham Research Institute raised the prospect that shale gas extraction would have to be stopped at a later stage:

    To alleviate concerns about the lock in of gas-based infrastructures, the Government would need to credibly signal to the private sector that gas (without CCS) will be not subject to a favourable regulatory environment in the medium term. The private sector would then invest in gas capital assets (fields, power plants etc.) on the basis that they could make an economic return over the coming 15-year period, but no longer.[56]

24. A recent report by Christophe McGlade and Paul Ekins of University College London identified the types of energy reserves which could not be burned, and their regional location, to keep global temperature rise to two degrees.[57] It suggested that 6% of Europe's gas reserve is unburnable, including 75% of its unconventional gas resources.[58] Our witnesses highlighted that that analysis did not take into account the impact of a binding limit on emissions, which could increase the proportions that would have to remain in the ground.[59] What is clear, however, is that the prospect of a 'carbon bubble', which we examined most recently in our Green Finance report,[60] would be increased by fracking.

25. Even without shale gas extraction, the Infrastructure Bill's provision for a strategy to maximise oil and gas extraction from UK reserves (paragraph 7)—a "potentially dangerous addition to a piece of legislation" Lord Smith believed[61]—will make it more difficult to decarbonise our energy sector. As Dr John Broderick put it, "it is counterproductive to be going looking for more fossil fuel reserves when we already know that we have to leave the majority of our existing fossil fuels underground".[62] As some of our witnesses highlighted, further development of fossil fuel energy in the UK will dilute our authority in the UN climate negotiations leading up to the Paris conference at the end of this year.[63]

26. Any large scale extraction of shale gas in the UK is likely to be at least 10-15 years away. It is also unlikely to be able to compete against the extensive renewable energy sector we should have by 2025-30 unless developed at a significant scale. By that time, it is likely that unabated coal-fired power generation will have been phased out to meet EU emissions directives, so fracking will not substitute for (more carbon-intensive) coal. Continually tightening carbon budgets under the Climate Change Act will have significantly curtailed our scope for fossil fuel energy, and as a consequence only a very small fraction of the possible shale gas deposits will be burnable.

27. A moratorium on the extraction of unconventional gas through fracking is needed to avoid the UK's carbon budgets being breached in the 2020s and beyond, and the international credibility of the UK in tackling climate change being critically weakened — already a prospect if the provisions in the Infrastructure Bill aimed at maximising North Sea oil extraction are passed.

28. The Infrastructure Bill should be amended to explicitly bar fracking of shale gas. This could be done through an Amendment to Clause 37, to qualify the provision in the Bill which seeks to introduce a strategy to maximise the economic extraction of 'petroleum' (which includes natural gas) reserves, so that the "principal objective [of the strategy] is not the objective of maximising the economic recovery of UK petroleum but ensuring that fossil fuel emissions are limited to the carbon budgets advised by the Committee on Climate Change and introducing a moratorium on the extraction of unconventional gas through fracking in order to reduce the risk of carbon budgets being breached."

18   Energy & Climate Change Committee, Fifth Report of Session 2010-12, Shale gas, HC 798, Summary Back

19   Q6 Back

20   E3G, Shale gas: four myths and a truth, March 2014 Back

21   Grantham Research Institute (FRA0009) para 6 Back

22   Q10 Back

23   Q11 Back

24   Prof Paul Stevens, Shale Gas in the United Kingdom, Chatham House, December 2013 Back

25   Committee on Climate Change website, A role for shale gas in a low-carbon economy? (September 2013) Back

26   Grantham Research Institute (FRA0009) para 5 Back

27   Ministers' shale gas 'hype' attacked, BBC website, 12 November 2014 Back

28   Adaptation Sub-Committee, Managing climate risks to well-being and the economy (July 2014), page 15 Back

29   Environmental Audit Committee, Fifth Report of Session 2013-14, Progress on carbon budgets, HC 60, page 3 Back

30   Committee on Climate Change, Meeting carbon budgets (July 2014), page 55 Back

31   Office for National Statistics, UK energy in brief 2014 (July 2014), p31 Back

32   European Council, Conclusions on 2030 Climate and Energy Policy Framework (October 2014) Back

33   Environmental Audit Committee, Fifth Report of Session 2013-14, Progress on carbon budgets, HC 60, paras 22, 24 Back

34   Environmental Audit Committee, Fifth Report of Session 2013-14, Progress on carbon budgets, HC 60, para 36 Back

35   Environmental Audit Committee, Fifth Report of Session 2013-14, Progress on carbon budgets, HC 60; Ninth Report of Session 2013-14, Energy subsidies, HC61 Back

36   Environmental Audit Committee, Twelfth Report of Session 2013-14, Green Finance, HC 191 Back

37   HC Deb, 22 July 2014, col 115WS Back

38   Committee on Climate Change, Meeting carbon budgets (July 2014), page 25 Back

39   DECC, Potential Greenhouse Gas Emissions Associated with Shale Gas Extraction and Use, September 2013 Back

40   DECC, 'The Myths and Realities of Shale Gas Exploration', 9 September 2013  Back

41   Q9 Back

42   Q3 Back

43   Committee on Climate Change website, A role for shale gas in a low-carbon economy? (September 2013); Q11 Back

44   Tyndall Centre for Climate Change Research, Shale gas: a provisional assessment of climate change and environmental impacts, January 2011 Back

45   CIWEM (FRA0006) para 25 Back

46   Grantham Research Institute (FRA0009), para 7 Back

47   Grantham Research Institute (FRA0009) para 9 Back

48   Q30 Back

49   Q4 Back

50   Dr John Broderick (FRA0075) Back

51   Dr John Broderick (FRA0075); Qq 11, 20 Back

52   Qq11, 12 Back

53   Greenpeace (FRA0050) Back

54   Prof Paul Stevens, Shale Gas in the United Kingdom, Chatham House, December 2013 Back

55   UK Green MEPs (FRA0014) Back

56   Grantham Research Institute (FRA0009), para 13 Back

57   McGlade, C & Ekins, P., The geographical distribution of fossil fuels unused when limiting global warming to 2 °C, January 2015, published in Nature Back

58   The Carbon Brief, 'Blog,' accessed 21 January 2015 Back

59   Q18 [John Broderick] Back

60   Environmental Audit Committee, Twelfth Report of Session 2013-14, Green Finance, HC 191 Back

61   Q137 Back

62   Q17 Back

63   Q27 [Tom Burke] Back

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Prepared 26 January 2015