Environmental Engineering Reference
In-Depth Information
It is inadequately enforced;
It is not bespoke, despite the United Nations Environment Program,
referencing the European Commission, stating that unconventional gas
and oil operations ''will require dedicated regulations''.
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3 Local Economic Impacts
At the heart of the UK Government's support for shale gas is its claimed
boost to the economy through lowering energy bills and creating jobs. In
neither case is the issue as clear cut as the Government makes out.
3.1 Energy Bills
Rising energy prices are a key political issue in the UK. Household energy
bills rose by 44% in real terms between 2002 and 2011.
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The main reason
for this was rising gas prices, which accounted for almost two-thirds of the
increase in the average dual-fuel energy bill between 2004 and 2010.
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Claims about lowering energy bills have been key for the Government. The
Chancellor of the Exchequer signalled his enthusiasm for shale gas when he
told the Conservative Party Conference in 2012 that he wanted to make sure
that Britain was not ''left behind as gas prices tumble on the other side of the
Atlantic''. More recently, Prime Minister David Cameron has written that
''fracking has real potential to drive energy bills down... gas and electric bills
can go down when our home-grown energy supply goes up''.
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But these claims have been widely refuted:
The Secretary of State for Energy & Climate Change, Ed Davey, has said
that ''North Sea Gas didn't significantly move UK prices - so we can't
expect UK shale production alone to have any effect'';
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Lord Stern, one of the world's leading climate-change economists, has
described the Prime Minister's claims as ''baseless economics'';
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and
Lord Browne, the Chairman of Cuadrilla Resources (the leading drilling
company in the UK) said that fracking in the UK ''is not going to have
material impact on price''.
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Shale gas production costs in Europe are likely to be higher than in the US.
Reasons for this include less-promising geology, higher population density
and associated problems of land availability, the lack of a competitive on-
shore drilling and services industry and tougher environmental regulation.
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Factors such as these led the International Energy Agency (IEA) to conclude
that operating costs in Europe will be 30-50% higher than in the US.
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Claims of cheaper gas prices also ignore global market dynamics. Demand
for gas is rising fast, particularly from China, India and other emerging
economies. This growing demand is likely to soak up new gas supplies,
potentially keeping supply constrained and prices high, meaning that ''UK
