As those of you unfortunate enough to follow my twitter feed will know that I comment on a lot of energy issues, that have so far not made it onto this blog.
Well here goes….
Today there was a big conference on shale gas in the UK, attended by lots of movers and shakers in the industry, with relevant stakeholders from the media, government, regulators and NGOs.
I didn’t go, but following all the tweets coming out of it, it looks like there are still two entrenched sides. Those that would suggest that shale gas will transform all our lives for the better and those that would suggest the opposite.
It sometimes feels like I’m dealing with religious fanatics. As a rather lapsed catholic, I’m aware of the concepts of catholic orthodoxy, the Eucharist, dogma and heracy. They’d fit quite well in the shale gas debate.
I’m not going to stretch this metaphor too far, but Jesus Christ guys, lighten up.
The first thing I’d like to remind everyone is that there’s no difference at the well head from “shale gas” and the gas that is produced in the North Sea. It’s just held in tighter packed rock.
Far too many people seem to think there’s a fundamental difference. Be aware that if you attack one, you attack both and who’s the winner there? That’s right, everyone’s favourite renewable fuel. Coal.
The second thing is fraccing and emissions. There’s a hell of a lot of conjecture about both. At the moment, I can’t make my mind up on both sides of this debate, but one thing I can say is I’ve advised a lot of oil companies that frac oil wells and there’s never been a problem.
The above point is surely about regulation. This is not new technology. This is a tried and tested technique that is known to work and is scientifically understood. It’s not witchcraft and wizardry. It should fraccing on tight or shale gas should be safely executable as long as there is a strong regulatory system in place and all instances are fully approved.
There are financial questions that no one has answered to my satisfaction. This will have to be a commercial enterprise. Shale gas projects are very expensive due to the very high capex and opex inherent to the industry. Whilst there are firms that have the cash, their road to profit is, for me, a little fuzzy. Small cap oil explorers I can understand the equation. With, say, Caudrilla, I’m yet to see the long term cash flow projections and how they can make long term profits. How long before they become profitable? How will the new liquidity source effect the UK energy and gas industry? These are questions I want to see detailed answers on, not just an airy wave of the hand, a patronising smile and a “we’ll sort it out”.
There’s been a lot of suggestions that shale gas will bring a massive economic boom to the UK, similar to that enjoyed by the US. From local employment up to GDP, apparently shale gas will unlock wealth heretofore unknown. Actually I think they may have a point. Thatcher got away with what she did thanks to UKCS oil revenues. Why shouldn’t there be a second energy boom in the UK?
On this subject, we should consider the issues faced by local communities. Trucks driving up and down roads not designed for HGVs is not something to be sniffed at. I live with a local consultation specialist, and I remember her phone going off in the middle of the night to complain about plant works waking up children. How do power companies and real estate firms get around this sort of challenge? simple, they redistribute profits to local communities and councils. Want to make fraccing more attractive to local communities? Get building that playground etc.
Finally there’s the simple issue. Energy security. This is far more open and shut. Until renewable tech really works more effectively, native gas reserves are the cleanest, safest way to ensure UK energy security. This is not to say we can’t trust Qatar, Russia, Norway, Algeria etc but isn’t it better to know you can do it yourself as well?
So basically, I’m yet to be entirely convinced, because of the lack of detail, the patronising attitude of all sides, and also my concerns over the lack of a detailed enough regulatory system.
I just wish the sides could focus more on empirical argument as opposed to hot air. This would help us all work out what we think.