Bishop Hill Number 10 discusses shale gas
May 18, 2012 Energy: gas This exchange from the House of Commons yesterday on the subject of shale gas is quite interesting.
Graham Stringer (Blackley and Broughton, Labour): Will not the biggest impact on reducing domestic energy bills be achieved by bringing shale gas online as quickly as possible?
Edward Davey (Parliamentary Under Secretary of State (Employment Relations, Consumer and Postal Affairs), Business, Innovation and Skills; Kingston and Surbiton, Liberal Democrat): I do not think so. We had a seminar at No. 10 recently, which the Prime Minister participated in, along with myself and the Business Secretary. We heard from experts in the shale gas industry who had been working in America and looking at the major opportunities in places such as Ukraine and China. They were clear that it would take some time for shale gas to be exploited in the UK. They were also clear that we needed strong regulation to proceed and that the shale gas reserves in this country are not quite as large as some people have been speculating.
I'm intrigued by a group of shale gas experts who would be demanding strong regulation and who claim that it will take a long time to do anything and that reserves are not as large as thought. This sounds rather like the Deutsche Bank report on shale. I've glanced at this report in the past and I must say I raised my eyebrows at the suggestion that there would be delays caused by lack of equipment. I mean, can't more equipment be manufactured?
I wonder who Number Ten's experts were?
Reader Comments (66)
Bizarrely I can find no trace of this "seminar" online. Surely if you were invited to such a seminar you would tell your friends and supporters? Or your opponents would have a moan they weren't invited or listened to?
Something fishy about that answer.
"In the farm she passes no one wakes,
But a jug in a bedroom gently shakes."
From Night Mail by W H Auden.
Quick! We must ban all trains - obviously they are as dangerous as shale gas.
"In the windfarm she passes no one fracks,
But an activisit in on the BBC gently hacks."
John Redwood is mentioned above, watched him on a TV news yesterday, stated that shale is a UK solution for cheap energy and mentioned that energy prices in the US are falling as a result of shale gas. Checked his blog and see this.
http://johnredwoodsdiary.com/2012/05/18/cheap-energy-can-be-energising/
Meanwhile the Canadian Federal budget introduced legislation to cut back on environmental regulatory red tape...
http://www.mondaq.com/canada/x/172382/Environmental+Law/2012+Federal+Budget+To+Streamline+Environmental+Assessment+And+Aboriginal+Consultation
Observe a country willing (and able) to act in its own sovereign interests.
Plenty of excess equipment in the US right now. Just a boat trip away. Drive on /drive off ships are available.
The scary thing about all this is that Greg Barker is my MP, so I can at least hope to get his attention. Having tried several times to write a draft, I am barely able to contain my temper and have to keep starting again. Odd really, given that I'm a financial journalist, and am therefore used to writing about idiotic decisions / people. Presumably, he would have been at the No.10 meeting - maybe I should just ask him for the submissions (ending next week, of course) that are punishing his elderly constituents (Bexhill is like Bournemouth, but older). See, I've gone off on one again....
DavidCobb
Quite so. But in the US you still essentially have the freedom of a market driven ethos relatively free of suffocating political strangulation. Rigs, tubulars, drill string, knock down bid second hand off Exchange and Mart. Send your legal land man out and negotiate a deal from a farmer, rig up and spud in. Not so here. Start at square one on the snakes and ladders board with DECC and submit your credentials- good luck. Deutsche Bank sadly probably have it about right.
Off the Bishop's tweet to Andrew Neil
http://uk.reuters.com/article/2012/04/17/uk-britain-shale-reserves-idUKBRE83G0KS20120417
"There will be a lot more offshore shale gas and oil resources than onshore," Nigel Smith, subsurface geologist and geophysicist at the British Geological Survey (BGS) said. UK offshore reserves could be five to 10 times as high as onshore.
This is certainly true. The whole Southern Gas Basin, where the 60's North Sea boom started- the Permian Rotliegendes Sandstone immediately overlies the Namurian and Westphalian Coal Measures from which the gas was sourced. A huge basin. With existing pipeline infrastucture. But dont expect offshore shale frac wells to fly at those old first round wellhead gas contract prices!
Justice4Rinka said:
Personally, I think the planned endgame is a personal energy tax. Since it is impossible not to use energy, this would be a tax you cannot possibly avoid, and would in effect be a sort of hybrid wealth-cum-poll tax.
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Do you have to pay VAT on utility bills in the UK?
In Australia, the 10% Goods and Services tax is added to electricity, gas and water bills. This pernicious practice not only inflates our costs, it provides a perverse incentive to the Government. The more these things cost, the more of our money they get to play with.
May 19, 2012 at 1:30 AM | johanna
5% on energy compared to 20% on most things in the UK.
http://www.hmrc.gov.uk/vat/forms-rates/rates/goods-services.htm
Deutsche bank is probably heavily invested in Russian gas so doesn't want any new, cheaper supplies in the West.
The key man is Schroeder who started the German renewables' scam and set up his North Westphalian gas import company with GazProm whilst still Chancellor.
The Marxist plan is still to have Western Europe beholden to Russia for its energy. Deutsche probably employs Merkel and Blair.
With gas pices in the US five times lower than Europe, due to the glut of shale gas, they are considering using some of the idle LNG import terminals completed a few years ago to liquify and export their natural gas. With such low gas prices it is becoming uneconomic to drill new shale gas wells, so there is a glut of machinery in the US and the exploration companies are looking to use it in other regions such as Latin America and Asia Pacific where there are great opportunities. Clearly the 'experts' who visited No. 10 haven't a clue on this subject. It is clear that Europe will be left behind in exploiting this new technology, and that industry and consumers will suffer as a result.
http://liberategreece.com/natural-gas-shale-gas-no-longer-popular-gazeta-wyborcza-warsaw/
Will the Enviromentalist put food in their babies mouths
They cant afford to heat their houses
May 19, 2012 at 1:30 AM | johanna
5% on energy compared to 20% on most things in the UK.
http://www.hmrc.gov.uk/vat/forms-rates/rates/goods-services.htm
May 19, 2012 at 3:49 AM | Unregistered CommenterRob Burton
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Thanks, Rob. Even at 5%, it means that every energy price rise generates more tax revenue, and of course the converse applies. You can be sure that your Treasury (and ours) is well aware of that. Although falling energy prices are broadly good for the economy, that's not how the bean-counters perceive it.
It seems that politicians are very easily misled by activists masquerading as experts, witness Bryony Worthington and her ramming through of the Climate Change Bill over the objections and caution of the Sir Humphrey types. Perhaps with a dim perception of the great damage done, she is now an advocate of thorium reactors to make up the energy shortfall.
So yes we do need to know who are giving advice to No.10 on shale gas. In some quarters any objection is better than none. Interesting to see newts being brought into the picture, amphibians being an infamous green obsession. In the leadup to the Sydney Olympics a huge amount of money was wasted on allegedly rare and endangered frogs whose claimed sole habitat, a disused brick quarry, was destined to be connected to the Harbour and flooded for use as an Olympic ferry terminal, a brilliant idea. Needless to say the greenies won and the ugly pit was left untouched. It was later quietly admitted that the frogs are perfectly happy living far and wide away from the old quarry, not that that matters to the activists.