This is a very broad question, so we have explored the potential environmental, social and economic consequences to shale gas extraction.
The environment and CO2
Natural gas from shale rock is the same as all natural gas. The only difference is that it is trapped in impermeable shale rock. Whilst burning shale gas to produce energy does cause CO2 emissions, a greenhouse gas, generating electricity from gas produces about half of the emissions of generating electricity from coal.1 Greenhouse gases contribute to climate change.
At present we get 40% of our electricity in this country from burning coal and we need to reduce this figure considerably in order to meet targets to reduce our impact on the environment. Although renewable sources of energy are, of course cleaner than fossil fuels, they are very expensive, so even green campaigners, such as Stephen Tindale, support shale gas extraction as a way of helping this country make the transition to renewable energy. We should also remember that we will need a reliable energy source at times when the wind doesn’t blow and the sun doesn’t shine.
The United Nations’ Intergovernmental Panel on Climate Change (IPCC) Working Group 35th Assessment Report, published in April 2014, said that avoiding climate change will mean reducing coal use before reducing the use of gas. This is because generating electricity from gas produces about half of the emissions than generating electricity from coal. However, they concluded more research needs to be done on methane released into the atmosphere during shale gas extraction2.
The UK’s Committee on Climate Change, which advises the Government on meeting the country’s carbon reduction targets, has concluded:
“UK shale gas production would reduce our dependence on imports and help to meet the UK’s continued gas demand, for example in industry and for heat in buildings, even as we reduce consumption by improving energy efficiency and switching to low-carbon technologies.”3
The environment and methane
However, we also must consider the effects of shale gas escaping into the atmosphere when it is being extracted. Shale gas is mostly methane which is more harmful to the environment than CO2. According to the US Environmental Protection Agency “Pound for pound, the comparative impact of methane on climate change is over 20 times greater than CO2 over a 100-year period.”4
Therefore, to ensure the effect on the environment is minimised, it is very important that as much of the gas extracted as possible is used and that as little methane as possible escapes into the atmosphere. The government’s Department of Energy and Climate Change (DECC) insists that operators must minimise the release of gas into the atmosphere and when gas can’t be economically used, it must be captured and “flared” to reduce its global warming emissions’.5 Beyond exploration, operators will have a commercial incentive not to flare gas, as the gas could otherwise be sold.
Finally, the shale gas industry in the UK is developing “green completion” based on industry best practice, to reduce the emissions of gases into the air, and this is emphasised in UKOOG’s “UK Onshore Shale Gas Well Guidelines”6. This involves using specialist equipment to collect and separate the initial flow of water, sand and gas, so the gas can be prevented from escaping. According to Professor David MacKay, (DECC’s Chief Scientific Advisor), and Dr Timothy Stone (the Senior Advisor to the Secretary of State), “green completions” should be adopted at all stages following exploration.7 According to the Government’s Department of Energy and Climate Change “Green completions and flaring can reduce methane emissions by as much as 95% versus venting straight into the atmosphere.”8
Professor Richard Selley from Imperial College London said: “The Government’s energy policy is to solve the ‘Trilemma’ for providing energy that is economic, that does least damage to the environment, and whose source is secure. It supports hydraulic fracturing for shale gas as part of a balanced mix of diverse energy sources, including nuclear and renewables. All 3 major parties support this solution to the energy trilemma.”
Many people believe that the primary advantage of producing natural gas from shale is that it means we will be less reliant on other countries for our energy and will create new jobs and industries.
Natural gas accounts for around 80% of the UK’s domestic and business heating needs9, with 83% of homes heated by this energy resource in 2013, so we must either import more or produce more of our own.10
Just 11 years ago (in 2003), the UK was actually a net exporter of gas. However, we are now importing more than we are exporting, which means we have to rely on other countries for our gas needs. The Department of Energy and Climate Change suggests that the UK will be importing nearly 70% of the gas we use by 2025, assuming we do not develop shale gas.11 John Williams, Senior Principal at Pöyry, a global consulting and engineering firm, told us that because the UK will still have a demand for gas in the future, that if this gas is produced from shale then the requirements for imports will be reduced. He said “this will have beneficial economic impacts in terms of balance of trade, job creation and increased GDP”.
With regards to investment and job creation, the Institute of Directors has produced calculations for a pad of 10 wells, each with four horizontal wells (laterals), which could heat a peak of 400,000 homes. In their model, the IoD assume that each lateral costs £6 million to drill, facility costs are £30 million and decommissioning costs are £40 million, with a total investment of just over £500 million – this includes operating expenditure, which is considerable, and the cost of getting the gas to market.12 According to EY, £333 million of capital investment is required to bring a well-pad of this scale into operation.13 This investment will be made by companies without subsidy from taxpayers.
In addition to generating energy, the oil and gas sector provides significant tax revenues to fund public services. A PwC report, commissioned by Oil and Gas UK in 2011, estimated that the oil and gas sector was the UK’s largest corporation tax payer, contributing 16.4% of total Government corporation tax receipts. If the tax paid by companies in the supply chain is included, the figure is even higher.
Another benefit for communities, in addition to new jobs and industries, would be new revenues. The industry has committed to paying £100,000 to the local community living near to each exploratory well site where hydraulic fracturing takes place, together with a £20,000 community benefit payment per unique horizontal well over 200 metres in length and below 300 metres in depth. This will be paid by the operator, regardless of whether or not recoverable deposits are found. In addition, the industry has committed to paying communities 1% of the value of the shale gas that is produced – for a site of 40 horizontal wells, this could be worth £5-10 million in total. Finally, operators will pay business rates on their sites – 100% of which will go straight to the local authorities in the area.
With regards to the long-term, it is also important to note that each well pad is temporary. Once a site has finished producing natural gas or oil it is then decommissioned in order to return the site to its original condition. This involves removing all of the surface equipment and making sure that the wells are safely cemented and capped. Typically, this process takes around six months to a year.
6 UKOOG, UK Onshore Shale Gas Well Guidelines http://www.ukoog.org.uk/images/ukoog/pdfs/ShaleGasWellGuidelines.pdf
Thank you to everyone who submitted questions similar to the one above. Questions we have received which are similar are shown below:
- Have the government thought about the long term repercussions of fracking and other extreme methods of gas extraction not just the short term benefits?
- What are the long term dangers
- How long would it lost and what are the long term effects
- Can a definite statement be made on any long or short term affects of fracking? Needs more information and more actual facts.
- What are the long term implications of extracting gas using the fracking technique?
- What are the long term effects?
- What are the long term effects? Is it good the environment? We need more information to form an opinion.
- I don't know anything about it. what is the long term damage?
- I am worried about the water table and long term effects. how much is known about the future effects from fracking?
- I don't know anything about it. What is the long term damage?
- What is it? What are short and long term effects?
- What are the other options? Who's telling the truth? There's been problems - don't know who to believe in. The people who are for fracking - is this a short term solution?