Environmental Engineering Reference
In-Depth Information
households and industry would be tied to a highly unpredictable roller
coaster of gas prices that are generally high and can spike higher due to
volatility''.
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Bloomberg New Energy Finance has estimated that ''the cost of shale gas
extraction in the UK will be between $7.10 and $12.20/MMBtu... similar to
the range of market prices for natural gas seen in the UK during the course
of 2012'' and concluded that hopes that shale gas will lead to lower energy
prices for the UK ''should be treated as wishful thinking''.
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The IEA's an-
alysis shows that gas prices in Europe will be around 40% higher than today
in both 2020 and 2035.
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3.2 Jobs and Local Economy
The shale gas industry paints an overwhelmingly positive picture of its local
economic impact through job creation. A report for Cuadrilla has claimed
that shale gas production in Lancashire could create up to 6500 full-time
equivalent jobs in the UK as a whole, with 1700 of these in Lancashire.
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The Institute of Directors has calculated that the production phase of a UK
gas industry could support up to 74 000 jobs (direct, indirect and induced).
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However, US experience shows that such claims should be treated with
scepticism: numbers can be over-stated;
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most employment is in the dril-
ling phase, which only lasts around a year;
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and many jobs go to transient
workers who move from one well to another, with 70% of gas-well drilling
jobs in Pennsylvania going to people from out of state.
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Job projection claims for UK shale gas vary greatly. The Environmental
Report prepared for the Government ahead of a possible new onshore oil
and gas licensing round assessed that the new licensing round could create
between 2500 and 5000 jobs (direct, indirect and induced) in the low-activity
scenario and 16 000-32 000 jobs in the high-activity scenario.
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Studies of job creation rarely look at potential negative impacts on other
sectors. For example, the Regeneris research for Cuadrilla made no assess-
ment of the possible impacts of fracking on tourism and agriculture. These
are key parts of the local economy in the area where Cuadrilla hopes to drill.
4 Energy Security
Another key argument supporting shale gas in the Government's armoury is
that it will improve the UK's energy security, providing a secure domestic
source of gas to replace declining production from the North Sea, and reduce
our dependency on imports.
However, there is no guarantee that any shale gas drilled in the UK will be
used here. The UK is part of a wider European energy market and gas could
be sold elsewhere in Europe.
What level of shale gas extraction would be needed in the UK to eliminate
imports? Bloomberg New Energy Finance has calculated that this would
require the drilling of 10 000-20 000 wells over a 15-year period, with a peak
