Thursday, 18 September 2014
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The week ahead: shale gas, reshoring and renewables

Last Friday saw David Cameron deliver a speech at the World Economic Forum in which he rebuked EU regulations and talked up the policies underpinning Britain’s economic recovery.

He noted that one encouraging factor linked to the upturn in Britain’s fortunes is the trend for companies to reshore (or bring their operations back to the UK), which is exactly what just over a tenth of SMEs have done in the past year.

Numerous factors are at play when it comes to reshoring - a key theme of EEF’s National Manufacturing Conference in March - and Cameron is firmly of the belief that ‘cheap and predictable sources of energy’ is one of them.

‘Yes, we need renewables – these are a vital part of our future,’ said Cameron during his speech in Davos. ‘We need nuclear as part of that energy mix too…But we also need to explore the opportunity represented by shale gas…Just look at what shale gas has done for America…It has reduced industrial gas prices in America to about one quarter of those in Europe and it’s set to create a million more manufacturing jobs as firms build new factories.’

But are untapped shale resources really the energy source that will bring companies back to the UK in droves, and will it take the strain off tired old Tommy Taxpayer’s wallet when it comes to domestic energy bills?

The answer right now is that we simply don’t know, but we do know that offshore wind alone accounts for around 8TWh annually and that this figure, according to the organisers of Integrity of Offshore Wind Structures taking place at Cranfield University on Wednesday, is set to double over the next three years.

A quick glance at the Carbon Trust’s website puts the potential annual revenue of offshore wind at £19bn by 2050. By contrast, the nation’s pub trade generates that figure as GDP right now, with £10bn accounting for tax revenue. Digression aside, events taking place this week will address the very real engineering issues associated with the deployment of renewables, and the issues that need to be addressed in order for shale resources to be exploited across Europe.

IET’s event at Cranfield will look at the capital an operational costs of offshore wind structures, examining how offshore support structures are currently designed and fabricated, then looking at ways in which, with better understanding steel foundations, they might be optimised for cost effective life-cycle operation.

Similarly, RenewableUK’s multifaceted Health and Safety Conference and Exhibition - taking place in Birmingham on Wednesday - has a myriad of strands, one of which will look at industry experience and new safety developments in the offshore wind and marine sector.

Offshore wind farms are being built further out to sea and maintaining them presents the frankly terrifying prospect of having to access installations when waves are at their most unruly. One particular session will address this, and clicking here will show you how industry has helped to address the issue.

The Policy Exchange convenes this Thursday to assess Europe’s potential as a shale player, looking specifically at the USA in terms of its successes, plus concerns brought to the nation in relation to well-publicised environmental concerns.

The Policy Exchange has five points to discuss, namely:

  • What is the potential of shale gas in Europe? What impact will it have on European energy prices? How important will the UK’s resource be in the European context?

  • Can Europe take advantage of its shale resources and still meet its climate obligations?

  • What legislation is needed to ensure that shale gas can be safely exploited without causing local environmental damage?

  • Will people in Europe accept the development of shale gas as they have in the United States?

  • What wider lessons does shale have for how we develop cheap, low carbon technologies?

What do you think? Let us know below.

 

 

 

 

 

 

 


Readers' comments (12)

  • Shale gas all about tax
    If we buy gas from abroad 65p/therm goes out of country, if we buy shale gas net cost to UK plc likely to be less than 30 p/therm. Huge benefit, we can use these funds for investment in insulation, renewables etc

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  • Cameron has at last started to add some substance to his stated desire to ‘rebalance the economy’, and reshoring and shale gas are inexorably linked to achieving that.
    It is very clear that Britain can manufacture much more than we do today, but an economic and reliable energy supply remains critical in achieving that aim. The debate on how we provide such an energy supply needs to be moved forwards quickly, objectively and dispassionately, and Cameron seems to be trying to do this.
    However, to give the population at large the facts regarding such issues we need the Engineering Institutions (rather than politicians) to step forward and dispel some of the misinformation that currently surrounds the subject.

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  • What is to stop the oil/gas companies who will extract this resource from selling it to the highest bidder and pocketing the profit for their shareholders. The gas would then not be available to benefit UK industry and alternate, more expensive sources of energy would have to be found (Nuclear?).

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  • Since when have Engineering Institutions been apolitical?

    They exist to serve their members and corporate sponsors who have many and varied vested interests.

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  • Looks like he is only looking it in terms of Profit rather than all the other environmental problems that he does not understand, maybe he should start drilling in his back garden first to see how safe it is?

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  • If we don't frack the Romanians and Bulgarians will, they’ll sell their gas to us at a nice profit making our industry uncompetitive and before you know it we’ll all be off to eastern Europe in search of jobs – two birds with one stone ;-)

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  • Are we being stupid exploiting this Shale gas now, especially in a rush?

    I remember a Spaniard telling my Father that we were stupid to exploit our North Sea Oil & Gas when oil was cheap. Politicians were so keen to export oil in the 1970s, any gas HAD to be flared initially (what a waste); this to urgently increase exports in 4 year political cycle. The consequent currency change destroyed Manufacturing. For example, Thatcher's Exchange Rate rapidly ranged from £1 equal to $1.05 up to $2.40+. I remember trying to evaluate the building of a UK chemical plant for a USA company - what is point of trying to create a 10% profit if the currency variation destroys the export market. How many dollars would that USA company pay for the chemical plant after it was built in UK?

    The Solution is to break up the current vertically integrated Energy Utilities. Then create a Gas Pool Price and a Wholesale Electricity Price from which companies can work competitively. The Utilities are tied into their OWN expensive Gas Fields and no cheap supplies are accepted as they are locked into "Futures" contracts.

    With a common Gas price in the Gas Network, then independent companies could import Fracked gas from America & elsewhere.
    Is that impossible? Grangemouth Refinery are doing precisely that to make themselves competitive by importing USA Fracked Gas.

    Meanwhile, we could slowly develop Fracking in a controlled manner which will avoid currency disruption; also preventing a 'free for all' where environmentally SLOPPY operating procedures always occur.
    If we manage it properly, all the other supplies will be running out and we will have cheap and very profitable supplies for our grandchildren & the plastics industry; thereby keeping energy for the manufacturing sector at a sensible value.

    Am I being stupid in thinking that Politicians can run an economy sensibly, plus think and act like sensible Engineers?

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  • Some food for thought:-
    http://www.davidsmythe.org/fracking/fracking.htm

    "This fault-leak problem associated with fracking has been recognised in France and Germany, but not in the UK."

    Will gas be flared at this oil well?
    http://www.theguardian.com/environment/2014/jan/23/fracking-balcombe-site-cuadrilla "Natural fractures in shale rock rules out need for hydraulic fracking, company says."

    So Cuadrilla put a positive spin on the presence of these faults, which common sense suggests will reduce the well's output and increase the risk of leaks they can't easily control. Do they care, if they still make a profit?

    Many questions, no satisfactory answers.

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  • The opposition to shale gas is led by environmentalists who, contrary to the evidence, believe that economic growth is bad for the environment, and others who realise that it will kill their heavily subsidised renewable energy business (and, of course, substantially reduce the price of power).

    When you look at it rationally, the upsides are enormous.

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  • Take dear Lord "invest whatever it takes" Browne into a darkened room and explain, in the simplest terms, that fracking = more GHG, for a (risky) quick buck over a short time span. Whereas the right renewables design = cheap, clean electricity (when he's dead and gone) for ever. What manner of human beings are he and Cameron? We need investment NOW to establish new British manufacturing, and no more crowing about a "world-leading" position in installing not-fit-for-purpose imported offshore technology.

    "examining how offshore support structures are currently designed"

    They are currently designed to a false premise. Stop putting HAWTs on the sea bed. How many dumb engineers are working on this problem?

    "Offshore wind farms are being built further out to sea and maintaining them presents the frankly terrifying prospect of having to access installations when waves are at their most unruly."

    Wind and waves make installation (with jack-up vessels) an expensive nightmare too!!

    So, mount a low c of g VAWT onto a 4-float WEC and arrange for them both to pump water to pressurised accumulators. They'd be more reliable without generators and the associated electronics, they'd harvest the wave energy and if you do need access it's not as difficult.

    Design these floaters with a draft of 20-30m and you can easily deploy them virtually anywhere around these islands, but first use the most productive sites where wind/wave and tidal can all be integrated with and share the same before-generator energy storage. Simples. No more intermittency.

    Stop using composite blades. They can't be mass produced and they can't be recycled. Design for the circular economy. You know it makes sense.

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