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23 July 2013

Shale gas is a global resource, but all eyes are on Britain

The shale gas industry was born in the USA and to a very large extent that is where it remains. The impediment isn’t the lack of resources beyond North America – because in all probability there are vast quantities of the stuff in shale formations around the world. 

No, the difficulty is transplanting an industry that has grown in place over decades to other countries where ‘fracking’ – the process by which shale gas is extracted – is a novelty. 

That’s why Britain is such an interesting test case. We are, of course, big natural gas consumers and producers. Thus we have the markets,  the distribution infrastructure and a lot of relevant expertise. Unlike France, where energy policy is centred around the nuclear industry and Germany where the coal industry is still a powerful force, Britain has a history of dashing for gas – especially when it can be found at home. Therefore if anyone in Europe can make of a go of this new energy source, it’s us. 

Writing for Project Syndicate, Bjorn Lomborg – the Danish statistician and self-style “sceptical environmentalist – can barely contain his excitement:

Actually, what the BGS estimated was the size of the resource i.e. the amount of gas in the ground. This is a different thing to the reserve, which is that proportion of the resource that can be economically extracted. It is really important that we don’t confuse these two concepts.

Nevertheless, Lomborg is right to see to see the potential benefits:

Replacing coal with shale gas wouldn’t just be good for the environment, it would also be good for our balance of payments and our energy security (given that much of the coal we use is imported). Yet, Lomborg seems more concerned to present shale gas as an alternative to renewable energy, especially offshore wind. He is certainly right to point out that current UK policies are paying far too much of our money in support of renewables, but, beyond that, his arguments are somewhat confused. Consider the following, for instance:

Well, it’s true that wind power can’t replace oil (most of which is used in vehicles), but then neither can natural gas (unless, of course, we shift to a completely different transport fuel infrastructure). Nor can wind power directly replace the gas we use in our homes, but that only goes to show that our native shale gas and renewable energy resources can be developed side by side, because there is no inherent conflict between them.

Lomborg is not a hardcore anti-green, but there are plenty who are and they have seized upon the prospect of shale gas as a weapon with which to batter their opponents. The greens have hit back,  portraying the nascent industry as a threat to the environment, property values and drinkable tap water. How odd, then, that these two sides who agree on nothing else, should agree on something that is clearly not true – which is that we must choose between gas and renewables. 

The fact is that we can have both.


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