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Prices may have fallen, but it’s the cleanest and safest of fossil fuels

My Times column on shale gas:

I don’t know about you, but I have been especially glad of my gas-fired central heating and hot water in the past few frigid weeks. Gas really is rather special: it provides us in this country with 84 per cent of our domestic heat, 27 per cent of our electricity, much of the feedstock for our synthetic consumer products, and pretty well all of the nitrogen fertiliser that has fed the world and largely banished famine. All this from a surprisingly small number of surprisingly small holes in the ground and the seabed, drilled with fewer accidents and spills than most other energy sources.

That is one reason why I will be arguing and voting to help the government improve its Infrastructure Bill today when it comes before the House of Lords, so as to make a shale gas industry in this country possible. When the bill was debated in the Commons, shale’s increasingly irrational opponents failed to impose an effective moratorium in England, though they have managed it in Wales and Scotland. But they still altered the Infrastructure Bill enough to tie the industry in strangling knots of new and unnecessary red tape that must be reversed if we are to see domestic shale gas heating British homes, paying British wages, feeding British factories, generating British electricity and not delivering us into dependence on a dangerous Russia.(For Russian views on the shale revolution see here.)

As a source of energy, gas is more reliable than wind, cleaner than coal, more flexible than solar, cheaper than nuclear, safer than biofuel, less land-hungry than hydro. We will be burning it for decades to come under any policy. The National Grid’s extreme “gone green” scenario for future energy policy, under which we would have cut our carbon dioxide emissions by 60 per cent by the year 2035 still sees us burning almost as much gas in that year as we burn today.

So we will still need gas, whatever happens. Domestic production, mainly from the North Sea, has fallen by 66 per cent in the past decade and we now import half our gas. Beneath Lancashire and Yorkshire, in the Bowland shale, lies one of the richest gas resources ever discovered, just 10 per cent of which would be enough to provide nearly 50 years of British needs.

The technology to get it out involves using water and sand to make cracks that are a millimetre wide in rocks that are a mile and a half down. A month’s work leads to 25 years of gas flow from a quiet box of tricks that can be hidden behind a hedge. No need to festoon the hills with permanent concrete bases for 400ft towers of steel trying to suck a sparse trickle of energy out of the wind on a cold, calm day.

Shale gas extraction is a process that has proved very safe and clean in the United States. It has had virtually no impact on groundwater, earthquakes or surface pollution anywhere. These are exaggerated myths constantly repeated by the wealthy multinational pressure groups such as Greenpeace and Friends of the Earth, by wealthy fashion designers and their nimby friends in gin-and-jag country, and by Vladimir Putin and other Russians with an interest in expensive gas. In places such as Pennsylvania the effect of shale gas has been job creation, wealth creation and environmental benefits. Blackpool could do with more well-paying jobs.

Some are now arguing that falling oil prices have rendered the argument over British shale gas academic. Prices have fallen so low as to make the cost of drilling wells and fracturing rocks uneconomic. Certainly if oil stays at $50 a barrel, the rig count in the shale-oil fields of Texas and North Dakota will continue to drop fast, and oil production (currently still rising) will tail off. But shale gas production has been rising fast in recent years despite persistently low gas prices in America, partly because of rapid improvement in the productivity and cost of gas wells as the practice of horizontal drilling and fracking is perfected.

American shale drillers can break even at lower and lower prices. Indeed, the falling oil price may drive some drillers back to gas. Over here, gas prices remain much higher anyway, though so do the regulatory costs likely to be borne by the industry. Besides, energy companies do not make their decisions based on spot prices but on forecasts of prices averaged over several years. By the time a British shale gas industry is up and running in the 2020s, prices may well be higher. (Incidentally, few people seem to be arguing that given the falling price of oil, we should be cancelling wind farm projects — oh, the joys of a guaranteed government subsidy.)

The dash for gas in the United States has lowered that country’s carbon dioxide emissions further and faster than the dash for wind has lowered ours. If we got gas flowing from the northwest of England, we would cut our emissions just by substituting imported gas, much of which comes in liquid form from places such as Qatar — liquefaction uses energy and generates emissions. If we used the gas to displace coal, we would cut emissions even faster. (In passing I declare an interest in coal.)

Admittedly, by 2050 the government is committed to decarbonising not just electricity but also almost all heating and transport, by switching us to electric cars and electric central heating, and insisting that such electricity comes from zero-carbon sources. And this is incompatible with burning gas. It is also incompatible with common sense. Electricity costs three times as much as gas per unit of energy, and the worst pockets of fuel poverty in this country are in places where people rely on electricity for heating. And that’s with most of our electricity made from cheap coal, rather than dear nuclear, solar or wind.

We have a huge chemical industry in this country, employing hundreds of thousands of people directly and indirectly, and it needs methane and ethane, derived from natural gas wells, as feedstock. That industry will disappear rapidly if we do not exploit domestic shale. It has repeatedly warned us of this.

As I reach my nineties in the 2040s, will I be nervously watching the weather forecast in order to plan when I can have a hot shower, and will quadrillions of cubic feet of gas still lie under Lancashire and Yorkshire untapped and unburnt, just because some rich people objected to making millimetre-wide cracks in rocks a mile and a half down? I do hope not.

By Matt Ridley | Tagged:  rational-optimist  the-times