1 Introduction |
1. With an abundance of natural resources,
Wales can play an important role in the United Kingdom's future
energy supply. Energy policy has been retained as a 'UK function'
although responsibility for planning policy has been devolved
to the Welsh Government.
2. Shale gas is natural gas (predominately
methane) found in shale rocks. Shale gas is often referred to
as an 'unconventional' gas because of the methods used to extract
it from rock beds. Advances in technologynotably hydraulic
fracturing or 'fracking'over the last decade have made
shale gas development economically viable. Fracking is a process
whereby water, containing sand, is pumped at high pressure into
the rock. The sand keeps the small fractures in the rock open
while the gas is extracted. Chemicals are also added to improve
the efficiency of the fracking operation.
3. The rapid development of shale gas
resources in North America has transformed the global gas market.
Shale gas is making a significant contribution to US gas productionit
increased from only 2% of US production in 2000 to 14% in 2009,
and is forecast to continue to increase to more than 30% by 2020.
4. Unconventional gas development in
the UK is at an early stage. As in England, planning permission
has been given at a number of sites in Wales for exploratory drilling
for shale gas. Industry estimates of shale gas resources in the
UK as a whole have increased markedly over the last few years.
Estimates vary considerably, but one report has estimated that
huge shale gas resources in South Wales could be worth up to £70
billion at current market prices.
5. Given the possible development of
a shale gas industry in Wales, we launched an inquiry in July
2013 to examine the potential economic and environmental impact
of exploration and commercial extraction of shale gas in Wales.
Shale gas has been examined by various other bodies in recent
years, including the House of Commons Energy and Climate Change
Committee and the House of Lords Economic Affairs Committee, but
our focus in this Report is specifically on Wales.
6. We took oral evidence from academics,
environmental organisations, industry representatives, regulatory
and monitoring authorities, the Welsh Government and the UK Department
of Energy and Climate Change (DECC). A full list of witnesses
can be found at the end of this Report. For this inquiry we also
undertook two visits. In October 2013 we visited Dragon LNG and
Milford Haven port to discuss the role of LNG (Liquefied Natural
Gas) within the UK's long-term energy strategy. We also visited
Cuadrilla's shale gas site at Elswick, near Blackpool, in February
2014. We are extremely grateful to those who provided oral and
written evidence and for those we met during our visits.
1 British Geological Survey, Shale Gas: BGS Research,
Eden Energy, UK gas resources, 2012 Back