Friday, 01 August 2014
masthead+quote+image
Advanced search

UK government targets shale gas growth

The UK is to become a world-leading centre for shale gas investment following an announcement today from government that includes £100bn for infrastructure projects.

Today’s announcement from Danny Alexander, chief secretary to the Treasury, follows yesterday’s Spending Review in which the chancellor George Osborne outlined plans to save £11.5bn whilst promoting economic growth through investment in sectors including energy, transport and science.

The government says it is taking action to provide the support and policy certainty needed to enable up to £110bn of private sector energy investment, which include a comprehensive package of reforms to enable shale gas exploration.

This burgeoning form of gas is extracted through hydraulic fracturing or ‘fracking’ and it received a boost today with the publication of a report from the British Geological Survey which looked at the potential volume of shale gas across 11 counties in northern England.

It concluded that there is likely to be some 40 trillion cubic metres (1,300 trillion cubic feet) of shale gas in the ground in this area - the Bowland Basin - although the amount that can be extracted will be determined through future exploratory drilling.

To this end, government says it will ‘publish a comprehensive package of reforms to enable shale gas exploration including proposals for the tax regime, for planning, and for community benefits, to give the UK a world-leading regime for investment.’

In a statement, energy secretary Michael Fallon said, ‘Shale gas represents an exciting new potential energy resource for the UK, and could play an important part in our energy mix.

‘The next step for industry is to establish how much gas is technically and commercially recoverable.

‘With the package announced today on planning, environmental regulations, and community benefits, it is clear that we want to encourage a shale industry that is safe and that doesn’t damage the environment.

Sounding a note of caution, Prof Jim Watson, research director, UK Energy Research Centre said, ‘It remains to be seen whether it will make economic sense to develop these resources – and how much can be extracted cost effectively.

‘Even if significant shale gas production develops in the UK, this would need to be compatible with stringent environmental regulations and climate targets.’

Nuclear and renewables

Further announcements on energy infrastructure include a ‘multi-billion pound guarantee’ for a new nuclear power station at Hinkley Point C, and the allocation of an additional £800m in 2015-16 for the Green

Investment Bank (GIB), which will enable it to invest in low carbon projects including renewable energy, waste management and energy efficiency.

Investors received further reassurances with the announcement of strike prices for renewables. Subject to consultation, draft strike prices will be applicable to offshore and onshore wind, wave, tidal, biomass conversion and large solar.

Dr Tim Fox, head of Energy and Environment at the Institution of Mechanical Engineers, said, ‘Today’s raft of announcements on energy infrastructure initiatives including nuclear, renewables and shale gas are long overdue and will go someway towards creating investor confidence.

‘While we welcome today’s announcement of proposed strike prices for renewable energy sources…it is worrying that no strike price has yet been set for nuclear.’

Today’s announcement forms part of a much larger range of measures aimed at providing £100bn for infrastructure projects in Britain (including HS2, investment in roads and flood defences, and the repair or build of homes) whilst ensuring the science base and investment incentives are there to achieve them. Full details are here.

In Brief

Rail

  • HS2 - The government is applying lessons from the successful delivery of the London 2012 Olympic Games to HS2 and is setting a funding envelope of £42.6bn (in 2011 prices) for construction costs and £7.5 billion for rolling stock together with a strong cost control framework
  • Confirm support for Network Rail to invest over £9bn in major rail projects between 2014-15 and 2018-19

Roads

  • The government will repair the national road network, investing over £4bn by 2020-21 to enable the Highways Agency to repair and renew the national road network, including resurfacing around 21,000 lane miles
  • Between £30bn to £50bn over a 10 to 15 year period will be made available to upgrade the nation’s roads to an entirely new standard

Science
The Spending Round commits to maintain resource funding for science in cash-terms at £4.6bn in 2015-16, as well as providing a real increase of £185m in resource funding for the Technology Strategy Board to support innovation. The government will increase science capital funding in real terms from £0.6bn in 2012-13 to £1.1bn in 2015-16, and in line with inflation to 2016-17

Regional funding
Devolve economic power to Local Enterprise Partnerships (LEPs) through the creation of a Single Local Growth Fund and Growth Deals


Readers' comments (4)

  • Fracking is another failure of government waiting to happen based on historical evidence.

    There are two things that I have learnt in nearly 50 years of political voting. One of them is that government does not listen to anyone but themselves and two, it generally over time gets things horribly wrong for us the people. This combination has successively depleted the wealth and standards of living in this country, and thereby the long-term wellbeing of the British people. Today we hear that government is going to pump in £100 billion into infrastructure and where ‘fracking’ for energy will form a sizable part. In the USA there has been continual controversy about this and where underground water courses and aquifers have been contaminated – we need them to exist as there is no way near enough capacity in our reservoirs. Indeed the ‘Frackers’ will not even tell the America people what chemicals are forced into the ground to induce the fracking process, so therefore it appears there is a cover-up in operation already as usual (regulators and business, the dynamic duo). Today also Ofgem announced that by middle-decade we have a high chance of blackouts through lack of electricity. We have already had and are still suffering the stupidity of the politically-big business motivated wind power agenda that will never keep the lights on with its inefficient returns to the British taxpayer. Indeed, government have not learnt anything again and the British people will continue paying in perpetuity for these great money devourers. This madness continues but where it should never have happened in the first place. For the Blair government were told (in No.10) and also the present coalition government by independent innovators that our future energy security resided in hydro-power and capturing 24/7 the energy of the sea. Something which totally surrounds our shores. Indeed just one of these independently developed environmentally-friendly energy schemes alone can produce in perpetuity ‘relatively ‘free’ electricity to the tune of 10% of the UK’s demand once built. Did Blair and the coalition listen, not one bit and where they went down the mad wind energy policy road but now where it appears they have got even madder with travelling down the unknown ‘fracking’ decision route. When I ask therefore will these custodians of our future wake up and think differently? Most probably never and the UK will continually go to the dogs I am afraid to say and another £100 billion up in smoke. If Cameron is listening which he never does I advise him to listen to independent brains, not those of big business and their quest for evermore profit and wealth from the British people. For that appears to be in reality what government, based upon past history, is all about.

    Dr David Hill
    Chief Executive
    World Innovation Foundation

    Unsuitable or offensive? Report this comment

  • As even a casual perusal of our pages will show, wind power is only a part of the energy mix of the UK and is not intended by anybody to be the sole way of 'keeping the lights on'. Moreover, we have reported on many projects funding the development and deployment of marine energy technologies.

  • People living in the Bowland Basin should just look to the 'fractured' legacy of South Wales to see the final result of allowing wholesale extraction of resources for profit. How an area with such a valuable commodity was left with nothing to show for the exploitation and environmental destruction it endured should never be repeated.

    Unsuitable or offensive? Report this comment

  • Don't let fracking happen in the UK.

    America wants to continue having lower natural gas and oil rates so as to increase job growth.

    America likes having the economic advantage of cheap gas.

    As for entrepreneurs looking to build or relocate manufacturing facilities, consider coming to America where our natural gas is cheap. We like having the edge. We'll let European progressives push inefficient and expensive windmills as your economic model.

    Unsuitable or offensive? Report this comment

  • With great respect Mr. Editor we have to use our long-term common sense in decision-making. In this respect if we harnessed the 24/7 power of the seas surrounding the UK (nearly half the circumference of the world at the equator), we would not need any other form of electricity generation and that is the problem with deep-seated vested interests of industry. They never use common sense as it would hit their bottom-line and we certainly could not have that now could we. Also we know because big business has such a powerful lobby group openly and behind closed doors with our politicians and leaders, common sense goes out of the window. But we shall have to realise one day that only by harnessing the power of the seas will we ever have energy security in the 21st century. On a side issue I am totally surprised that you never took up my recommendation that you undertook an article based on the problems with engineers in the UK and where they are not represented as they should. The article was taken up by EU Reporter as they knew how important for the EU engineers really are - http://www.eureporter.co/magazine/2014/01/13/opinion-the-einstein-argyris-link/

    Dr David Hill
    Chief Executive
    World Innovation Foundation

    Unsuitable or offensive? Report this comment

Have your say

Mandatory
Mandatory
Mandatory
Mandatory

My saved stories (Empty)

You have no saved stories

Save this article

Digital Edition

The Engineer July Digi Issue

Poll

London Mayor Boris Johnson is lobbying for a £10 additional charge for diesel cars to drive into Central London by 2020, and for road tax on diesel cars and all pre-2006 cars to be increased, to counter air pollution. What option most closely matches your opinion on this?

Previous Poll

Europe's largest tidal array in the Pentand Firth off Orkney will eventually generate up to 86MW of power. What will it take for tidal energy to make an appreciable contribution to the UK's energy needs?

Read and comment on the results here