UK shale industry claims it could create over 60,000 jobs

  
Fracking installation. UK, 2011. [Justin Wooford/Flickr]

Studies on the impact of shale gas extraction in Europe’s economy and energy security are mushrooming in the wake of the Ukraine crisis. The latest from the UK Onshore Operators Group (UKOOG) claims that the development of shale gas in the UK could generate "€40.2 billion” and “create up to 64,000 jobs” in Britain.

The industry-funded study is based on the “high-case scenario” from a May 2013 report by the Institute of Directors (IoD) of “what a shale pad could look like”, estimating that 4,000 wells would be drilled between 2016 and 2032. Both highlight the benefits of shale gas development over job creation, tax revenues and potentially lower carbon emissions than imported gas.

The authors of the UKOOG study estimate that €40.2 billion would be spent in total by 2024 for activities related to shale gas exploitation - hydraulic fracturing, drilling, waste management as well as storage and transportation.

A whole new industry

The report also praises the export potential the UK could gain by taking a “leadership position in shale gas”, but recognises the geological uncertainty that surrounds the whole endeavour.

The UK, which has important shale resources, has increasingly been advocating for the exploration of unconventional gas and in particular as a means to secure supply and energy independence from Russia.

The current British government is openly in favour of the development of shale gas, and has offered tax breaks to shale gas companies for that purpose, with the energy minister, Michael Fallon declaring that "shale gas has the potential to kickstart a whole new industry, building on the world leading expertise the UK already has in the energy sector."

Wishful thinking

However, environmental campaigners have called the report “a lobby document full of wishful thinking”, with Friends of the Earth asking: “The shale production in the US is already about to decline. While it is supposed to have the biggest world potential, only after more than a decade of production, how could UK shale be a long-term option while they still have no idea how much gas they could economically and technically extract?”

The green campaigners however “welcomed” the fact that the report is clarifying the intentions of the industry over how many wells it plans to drill, warning that 4,000 is “a massive number” that “will generate significant industrialisation.”

Friends of the Earth’s Antoine Simon also said it was suspicious of the job creation target of the study, stressing that “the industry is subject to inherent boom-and-bust cycles due to the quick depletion of its wells' productivity.”

The UKOOG report also says that “20 million homes could be heated by UK shale gas production at peak times", but various studies have shown that the consumers’ gas bill is not necessarily going to fall.

Bloomberg new Energy Finance predicts that shale gas exploitation in the UK is “unlikely to result in low natural gas prices”, while the London School of Economics’ Graham Institute concluded that “it is unlikely that gas consumers would see much, if any, benefit in terms of reduced gas and electricity bills".

Positions: 

Marcus Pepperell, spokesperson for Shale Gas Europe said: "Europe needs innovative solutions to its growing energy requirements to remain competitive, stimulate economic recovery and drive growth. UKOOG’s report provides further insight to the significant business opportunities that the development of a new onshore gas industry could bring to the UK economy. Shale Gas Europe has consistently called for more clarification on the potential benefits that may be created by the development of a sustainable, affordable, secure and reliable supply to power Europe forward as it meets its domestic and business energy needs. The possibility of generating such significant opportunities is an important consideration for all key decision makers as they look to meet our future energy challenges."

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Comments

Mike Parr's picture

Deconstructing the statements:
"could generate "€40.2 billion” and “create up to 64,000 jobs” in Britain
"could" implies roulette territory, if fracking created 2 jobs the "up to" statement would still be valid & given this it falls into the class of pure nonsense.

In contrast to the uncertainties surrounding shale gas/fracking, the UK has the best wind regime in Europe on-shore & off-shore (fact). Wind turbines exist to exploit this (fact). The current UK government wants to stop on-shore development (which would deliver certain results) and instead will support fracking (see above for the uncertainties).

"4,000 wells would be drilled between 2016 and 2032" - & the pipelines to carry all that gas away - every well will need one - the environmental impact?

€40.2 billion buys you around 40GW of on-shore wind & with a capacity factor of 25% gives you 10GW. The impact is minimal (no pipelines - & if some thought is given to location minimal additional power lines).

"UK could gain by taking a “leadership position in shale gas”" leadership relative to whom? the USA has leadership in this area - the UK would use USA technology. The beneficiaries would thus be US companies. Given this, Fallons statement "shale gas....potential to kickstart...new industry, building on the world leading expertise the UK already has in the energy sector." falls firmly into the category of more complete nonsense as do the self-serving utterances by Pepperell - one wonders if they ever reflect a bit on their audience - one supposes they think we are complete morons.

UK Shale gas (and by extension Euro shale gas): no certainty on industrial benefits, no certainty on gas output, no impact on UK/Euro gas prices, plenty of opposition (Balcombe?). The only non-puzzle in all this is why the UK Tories are so keen on it? Because most of the companies active in fracking contribute to Tory party funds.

Those that want to see a historical parallel are recommended to read Norman Lewis' "The Honoured Society" covering the Mafia in Sicily. In this case the Tories are the Christian Democrats and their funders/supporters are finance and oil - complementary mafias - & it is interesting that both groups favoured pin-striped suits.

Joe Thorpe's picture

If nothing else it will greatly reduce our trade deficit with Europe & give independence so that we can't be held to ransom by the EU which is no better than Russia in its ambition to control people & their lives. I suggest you get rid of your car, refuse to travel on Planes & buses & refuse to pay for electricity generated without renewables which cost 3 times that of imported coal let alone gas sitting under our own turf

Mike Parr's picture

The UK imports some Norwegian gas, some Dutch gas and increasingly gas from the middle east. The deficit with EU partners is mostly in manufactured goods (revival of said UK mfu'ing industry being seemingly impossible for either party. The uncertainties surrounding UK shale gas make it impossible to know if there will be any impact on UK energy independence.

In the case of RES, Mr Thorpe, Levelised costs for on-shore wind at 4pence/kWhr are somewhat less than a new coal plant (the existing coal plants need to close because they are old & no longer meet emission standards). New coal LCOEs roll in at 5 to 6 pence/kWhr. Nice try with the RES costs 3x coal - it does not - it's cheaper.

Nukes could be quite cheap but the Tories chosen the expensive option - thus if you live in the UK you will be glad to hear that for the next 40 years you and other UK serfs will be paying money to the French state aka EdF.

Joe Thorpe's picture

More rubbish, Nuclear will become increasingly cheap with Inflation, Coal is by far the cheapest way to provide energy for the EU & the last time I looked at a map, Norway was still in Europe. Any Energy sourced from within the UK will benefit our balance of payments? even a grumpy socialist cant disagree with that fact. Wind is hopeless its up & down like a whores draws & feed in tariffs have to be paid even when we are all in bed asleep which is like keeping the kettles boiling all night & waking up to find the wind has died down & we cant make a cuppa without the grid turning on the diesel electric generating farms which are sitting waiting for the opportunity to take up the slack because they cant be tuned on at the flick of a switch.

Mike Parr's picture

More contentless assertions from Thorpe. The "deal" wrt Hinkley and the other nuke stations is that inflation is built in to the CfD price. So nice try but it does not work.
As NG noted - they are very good at predicting output from wind turbines & have no problems integrating them into the network (paraphrasing the head of NG operations)
"Diesel electric farms" oh please you don't know what you are talking about - diesels in various shapes & sizes provide NG with a STOR service - this is needed quite rarely - if you read the NG monthly reports.
I'm not going to write anymore, because I do not as a rule provide free eduction to people making moronic assertions - you fall firmly into that category Thorpe.

Gerry's picture

There is a lot of blue sky thinking happening here. To start they're expecting a lot of these 4000 wells. This number is big enough to inconvenience a large number of people but not big enough to start exporting anything. The US had 30,000+ wells going in 2010 when export started in earnest and has kept going hard since then, partially because the wells have such a short production life. Fracking is best suited to large open areas with minimal population and low environmental standards, like Ukraine for instance. All you'll achieve in the UK is struggle, resentment and resistance in the population. Either the gas will be syphoned away from local consumption to be used for export or else it will be more expensive because they will first have to recover costs, of which there are many, and second will tax it to the hilt just like everything else. Personally I think an army of activists will descend on this project and hammer it into the ground.

Charles_m's picture

MP - "€40.2 billion buys you around 40GW......." none of which will ever contribute to the 27Kw output of my gas boiler. Most homes rely on gas or oil for their heating and hot water and no amount of wind turbines will provide for that. So alternative sources of gas need to be evaluated. Apart from that wind turbine capabilities are grossly exaggerated and they are a bloody eyesore. A fracking wellhead can at least be hidden by trees...

Mike Parr's picture

You will need to change over to electric heating - probably by GSHP or ASHP. You will probably also need to properly insulate your home. "fracking wellhead hidden by trees" true & the pipeline that will need to be buried?. The day you agree to have a wellhead near your home is the day I believe you are anything other than a hypocrite.

Charles_m's picture

Turbines need armoured cables feeding into the grid - buried to the best of my knowledge, not much difference in infrastucture overhead to a gas pipeline, maybe somewhat smaller in diameter. I certainly don't want a wind turbine near me, nor a fracking wellhead either. Hypocrite? I'm an out & out nimby on this subject, just like most people but i'll openly admit it. My preferred option is nuclear - generally you can choose whether or not to live near a power station, while wellheads and turbines are short startup time projects which can appear anywhere.

an european's picture

I'm not against Shale Gas in Europe but at least it should have a secured perimeter for gas pumping !
As for nuke's it's never save enough when cores get's old but i' am for a fusion reactor for energy providing
At least in case of a core failure (worst case) in a fusion reactor the radioactive products are short lived (50-100 years) compared to the waste from a fission powerplant (which lasts for thousands of years). Also, the radioactivity in a fusion powerplant will be confined to the powerplant itself, there will not be any waste needing to be transported for disposal, storage or reprocessing.
Back to shale gas ! Europe could act itself 10% form the imported Russian 75% ! Americans and Russians have the ability to be energy independent ! Why not for Europe when it has the ability to do itself but why waiting go for it ! !

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