UK needs to start fracking to revive its energy sector
The UK could be sitting on 1,300 trillion cubic feet worth of shale gas resources
The numbers are almost beyond belief. Central England, believes the British Geological Survey, is sitting on shale-gas resources that probably amount to 1,300 trillion cubic feet. At a recovery rate of 10%, this gives the UK producible gas 15 times greater than its conventional reserves and roughly equal to those in Australia, a rising power in the global liquefied natural (LNG) export business. More gas may be found elsewhere in the country.
This geological fluke is a gift. The UK's power-generation sector is creaking after years of sweating older assets; plans to install new nuclear plants and build up renewable energy are progressing as if through British treacle; and domestic gas production barely meets half of consumption now and, without shale gas, the number will keep falling.
More than that, the economy remains weak. Paying foreigners for half of your gas doesn't help. By 2030, predicts the Institute of Directors (IoD), a business group, the annual natural gas import bill could reach almost £16 billion ($24.3bn).
Shale gas could change this picture. The northwest of England, where the resource is buried, suffers some of the highest unemployment rates in a country where joblessness remains high. The IoD reckons a shale-gas boom in the region could create 74,000 jobs and see investment of £3.4bn. The northwest corner of England was the heart of the industrial revolution. If the UK exploited its opportunity as the US has, shale gas could underpin a petrochemicals industry and re-industrialise a depressed region.
George Osborne, the UK's finance minister, is keen. His ministry wants to offer £100,000 and 1% of revenues to communities where the drilling will happen. In his last budget, Osborne announced tax breaks for drillers, too. That is sensible, but isn't really enough. Shale gas is not just a potential boon for the country's economy but an opportunity for its politicians, too, and they should realise this. The ruling Conservative and opposition Labour parties should be fighting to promote a once-in-a-generation chance to rebalance the UK financial services-dependent economy, making industry and manufacture competitive again. The slogan they must use is obvious: shale gas means jobs.
But the public discourse is still swamped in debates about the environmental impact of shale gas and by the relentless lobbying of green groups, whose opposition to hydraulic fracturing - if it succeeds - will chiefly serve the interests of coal producers, Qatari, Norwegian and Russian gas exporters, and electricity firms only too happy to see prices keep rising amid dwindling local supplies. Trapping shale gas indefinitely will do the same to the UK economy.
Only drilling will prove the resources and show the UK public that shale gas can be extracted safely and without fuss. The government should regulate the process and then unleash the frackers. This is urgent and it needs to start now.