Fracking in the UK was dead, even before the earthquakes
By Lord Redesdale, CEO of the EMA
The recent announcement on a moratorium on Fracking by the Government, could be seen as a cynical election ploy, because the whole UK shale gas project is in effect presently untenable. The Government has until now given wholehearted support, but the recent National Audit Office report has questioned the economic viability of the industry, so why not make some headlines.
Shale gas was promoted on two assumptions, it would lower prices and increase security of supply, so what has changed?
The killer for shale extraction is that it will almost certainly not lower costs in the short term. Shale extraction, if the geology is right as it is in parts of the US, can be cheap. However, in the case of the UK, present gas supplies are cheaper. Investment without Government support or subsidy could well be loss making.
Security of supply is also not guaranteed. The British Geological Survey has proven there is a lot of shale gas, but not that the geology would allow cheap extraction. At present security of supply is not an issue, but how sustainable is UK shale gas. A fact often not mentioned is that if fully exploited the reserves would be almost depleted in seven years.
And then there are the earthquakes…