Developing UK Shale Gas: A Crucial 1-2 Years
In his speech before delegates at Unconventional Gas Aberdeen 2014, Dan Byles, Member of Parliament for North Warwickshire & Bedworth, London, United Kingdom, said that the next 12-24 months would be crucial in seeing just how the UK shale gas sector would play out.
He reported, “After a very slow start, we are just now seeing a number of applications to drill come through and over the next 12-18 months seeing how this next wave of applications for exploratory wells fares through the planning and permitting process, I think will be a key test to see whether the initiators of unconventional gas and oil will be successful in trying to smooth the path for developers in terms of being able to get through the planning and permitting process.”
The forthcoming 14th Licensing Round, he said, would be a barometer for gauging continuing levels of interest and confidence in the nascent UK shale gas sector. Regarding the 14th Round, he said the good news was they were being tailored to be better suited to the peculiarities of unconventional oil and gas exploration. “The reason for caution, though, is the 14th licensing Round could be a dangerous political moment. Right now there are many MPs and local communities up and down the country who don't think the shale gas debate has anything to do with them – something the read in the papers, something they see on the news.
“If they wake up one morning to the unexpected announcement that a company they've never heard of has just been granted a license to explore shale gas in their constituency or area, there's a risk that we could see some knee-jerk responses, particularly from MPs and local authorities,” he explained, offering that this made it necessary to be proactive that people be aware of such cases.
He said that as scientific evidence grew, there was likely to be less talk about water contamination and seismicity issues and more about climate change, but questioned whether the UK should be held responsible for the LNG shipments that it would not burn on its shores if it burned only indigenous gas.
Mr. Byles, who sits on the Energy & Climate Change Select Committee, founded and chaired the All Party Parliamentary Group on Unconventional Oil and Gas and chairs the all party Environment Group, told delegates in Aberdeen that he had set up the All Party group, because he was fed up with the polarized debate: shale gas as the solution to all our problems versus “shale gas as some sort of terrible bogeyman.”
He explained, “The All Party Group is not a pro shale gas group – it's a forum for rational, evidenced based discussion and contains a wide range of views, from those who are in favor of developing shale gas to those who are against it.”
However, he admitted he was for shale gas based on the evidence he had seen. “But I do like to make the point to industry, that we will continue to lift up all the stones and look underneath, and you guys shouldn't be afraid of us doing that, especially not if you're being honest about your assessments of what you can and can't do safely, which is from what I see is the case.”
Mr. Byles made passing mention of the “energy trilemma” with its three broadly conflicting priorities of decarbonization, affordability, and energy security. He said the interplay between affordability and decarbonization had been causing a lot of problems on the political stage. “One of the problems caused by the increasing politicization of energy policy has been a tendency for people to see the entire energy debate in terms of competing extremes rather than a need for a diverse and complex energy mix.
“There should be no real argument between whether we need to choose between gas and renewables – we will need both and will continue to need both over a very long time,” he stated.
To illustrate, he offered that over 75% of UK electricity needs came from gas and coal and 83% of homes were heated by gas. “Even a speedy increase in developing new renewable generation will take a long time to cut into that and, obviously, it should start, from a climate change perspective, by displacing the coal rather than the gas,” he added.
It was not a question, according to Mr. Byles, over whether Britain needed the gas, but where the gas it needed would come from.
“Up until 2004, the UK was a net exporter of gas and since then we've become a net importer. By 2030 we're predicted to be importing up to 80% of our gas needs, at an estimated cost of some GBP 15 billion/year,” he said, adding that it wasn't so much about security of price as about physical security of supply.
This was the context in which the shale gas debate was being played out in Britain, he said.
But what about the potential estimated 74,000 jobs direct and indirect jobs that could be created, or the investments made? “Given those figures it's not surprising that there is a broad, cross-party political support for developing shale gas. It's very easy to think that the consensus on energy is breaking down, particularly between the Conservatives and the Labour Party, and there are some areas around the edges where it looks like that's happening, but this is not currently one of them,” he explained, offering his opinion that there was a cross-party consensus that developing UK shale gas was the right thing to do.
“On the emotional and trust side, we need to continue to ensure the transparency and robustness of the regulations on the policy, because local communities are entirely justified to ask 'is this safe for me and my community?',” he said.
Mr. Byles added that effective community engagement was essential to ensure that communities were part of the process and didn't feel that shale gas was something that was done to them.
Drew Leifheit is Natural Gas Europe's New Media Specialist.