Bang Bang

So this week there have been two reports released which should have reduced the fracking industry’s stocks of paracetamol.

The first came from the University of Stirling and looked at the research that underpinned the Scottish parliament’s ban on fracking.

In the first study of its kind, the team compared the approach to 14 assessments carried out around the world, including in the United States, Australia, and Germany. They found that Scotland carried out the most extensive assessment – focussing on key factors including public health, climate change and economic impact.

The report concludes: “In terms of breadth, depth and scale, this approach appears more detailed than any undertaken to date globally.”

The report is particularly critical of the UK government’s reliance on the 2013 Public Health England report stating on

The HIA produced by Public Health England (PHE) on UOGE in the UK [3] was conducted partly because various national and local agencies requested advice on the matter. The 2013 draft version was produced following statements by UK government ministers supporting fracking with appropriate caveats about the industry being properly regulated and following good practice.

PHE is a government executive agency of the UK Department of Health. Although it states it has operational autonomy in 2015 it was criticized in the BMJ as being “nominally independent, (but) appeared to be serving the policy agenda of a government promoting the potential of fracking…to provide the UK with greater energy security, growth and jobs” [51]. The PHE review excluded consideration of climate change and greenhouse gas emissions, sustainable use of water resources, nuisance issues, traffic (apart from vehicle exhaust emissions), occupational health, visual impact and the socioeconomic benefits and impacts of shale gas extraction. A BMJ commentary on the report noted that “a focus on mostly hypothetical regulatory and engineering solutions may mistake best practices for actual practices and supplants the empirical with the theoretical” [23]. The report has some but limited relevance in informing a comprehensive policy process to assess fracking in 2018. Despite several key weaknesses including neglect of mental health, no consideration of cumulative exposures and little analysis of industry practice under different regulatory regimes [5] (pp. 26–29) the PHE report has been politically significant and has been cited repeatedly by politicians and industry to claim that fracking can and will be conducted safely in the UK.

It would seem that Ineos’s attempts to sue the Scottish parliament for their decision may well founder on the rocks of this report.

The other report would have been equally indigestible for the fracking industry.

Researchers on Sustainable Industrial Systems at the School of Chemical Engineering and Analytical Science at the University of Manchester have looked at the full life cycle costs of shale gas extraction and concluded that:

• UK shale gas is 2 times more expensive than LNG and 3 times more than US shale gas.
• Shale gas would have little effect on energy prices and consumer bills.
• The contribution to the GDP is small, an order of magnitude lower than in the US.
• The economic success of shale gas in the US may not be replicated in the UK.

This comes as little surprise to those of us who have looked into this previously and compared the forecast costs of extraction by EY, Oxford Institute, Bloomberg and Centrica which range from 46p to 102 p a therm and then compared these to the forward gas prices as shown below. The red line represents an approximate average for the next 6 years. As you can see it seldom exceeds the lowest forecast extraction cost estimate of 46p.

It never approaches the value of 2.63p/kwh or 77p a therm which the University of Manchester report posits as the lowest break even cost assuming a 10% discount rate.

Bang Bang indeed.