Bishop Hill Shale "a game changer": official
Jul 18, 2013 Energy: gas Interfax Natural Gas Daily says that a report prepared for DECC in the wake of the British Geological Survey estimate of shale gas resources in the UK will find that it and similar resources around Europe prove exploitable then gas prices could fall by 28%.
Following the release of a study by the British Geological Survey that shows there could be 40 trillion cubic metres of shale gas resources in England alone, the impact of these reserves on the UK’s gas prices has been a hot topic. If the UK and continental Europe combine to produce around 100 billion cubic metres per year of unconventional reserves between 2020 and 2030, Navigant expects “a combination of local gas and readily available LNG puts sufficient pressure on oil price-indexed gas supplies that gas prices fall towards the long-run marginal cost, getting to 50 pence per therm [p/th] by 2030”. Under this ‘low price scenario’, Navigant believes continued cost efficiencies could even “move prices downwards to somewhere between 35 p/th and 50 p/th”. The fall would mean prices have the potential to halve from 2012’s average trade price of 69 p/th, making the UK’s shale resources an undoubted ‘game-changer’. David Kennedy of the Committee on Climate Change has of course declared that shale is not a game changer. But given his remarks on climate sensitivity I know who I am going to believe.
Reader Comments (53)
GWPF has this from the Times
http://www.thegwpf.org/britain-scales-wind-power-shale-revolution-shakes-green-energy-assumptions/
and this from the Grauniad
http://www.thegwpf.org/bjorn-lomborg-tells-guardian-readers-fracking-good-green/
and just for good measure the Sun is sticking the boot in on the ever rising cost of energy
http://www.thegwpf.org/sun-rising-bills-green/
obviously the Sun didnt get the memo from the SciFi committee
The game has changed but the buggers are still playing Risk
The wheels are falling off the CAGW anti fossil fuel wagon. Which political party will jump off first? If I was UKIP I'd be training up my members to put fracking and scepticism top of their agenda and explain the whole thing to the public.
This is an enormous game changer. Even the Guardian is addressing it in neutral terms. Carbon trading has basically failed and a new fossil fuel Klondyke has arrived. Global warming is going to fade away..
But.....Isn't out whole DECC energy policy based on a gamble that gas prices will go up?
Dave Kennedy needs to be taken out and shot for crimes against humanity.
Fenbeagle "Isn't out whole DECC energy policy based on a gamble that gas prices will go up?" I don't think it's gambling if they fix the game. They intend to make it so expensive that we meekly cut how much we use. I wouldn't put it passed them to keep gas prices high, stick with renewables and sell gas off abroad so they can pocket the profits.
Does anybody think the spouters of the most egregious deliberate and inventive shale knocking lies and obstruction should be allowed any position of influence in future? The usual suspects are still toddling around - time they were gone.
There should be something more than simple contempt - DECC should be shut down as rapidly as possible and simple statutory redundancy paid out. Absolutely NO effort should be made at all to reallocate the staff = bye-bye.
Likewise - unless OFGEM grows a pair and starts actually behaving less like a cartel's trade organisation and actually enforces sane power pricing, achievable engineering and reliability - they should go too. Their involvement in the corrupt STOR hooplah is a disgrace and their fawning approach to self evidently irrational claims from the renewable subsidy junkies isn't what most people think is printed on the OFGEM box...
The wasting disease of "renewables" must be treated.
As someone posted many moons ago, the mistake was to combine the departments of Energy and Climate Change into one body, There should be a dept of Energy which is solely responsible for making sure we have secure, cheap energy both for our economy and for our population. I am not of the opinion that Climate Change merits a whole department and a Minister.
The figures being quoted for shale are still hugely wrong and vary widely from day to day and from newspaper to newspaper.
Lancashire alone has over 1000 trillion cubic feet of gas and recovery rates will be 40% to start with and will grow with technological advances. Uk shale gas (and oil) will sustain the UK for many centuries if we can get the green idiots out of the way.
"cost efficiencies could even “move prices downwards to somewhere between 35 p/th and 50 p/th”. The fall would mean prices have the potential to halve from 2012’s average trade price of 69 p/th:
This is "production cost", I believe. It does not include the fixed costs of transportation, processing, distribution. If taxes are a percentage, then you have a double decrease. If you know what your current cost to consumers is, with this production-to-pipeline and tax-on-sales-product-to-pipeline, we can figure what the actual savings could be.
I say "could be", as the government may be dependent on the tax on gas at company sales sites. So the reduction may be less than one thinks, or they may just hike taxes in some other area to compensate.
What we need to do is take the current cost-to-consumer and reduce ONLY the cost-of-production number, which appears to be 19-34 pth (whatever that translates as). And if history is a judge, it will be closer to 19 than 24.
ASSUMING that the local productivity and infrastructure and facilities costs are equal to the stated numbers. Which, if anyone knows of my position, will come as no surprise that I find difficult to believe.
Anyway, we need a simple calculation above to see what they are talking about wrt the common man.
Dung 12:17
yeah, I suppose the old gag about the ironic naming of government departments could be wheeled out :-)
The bottom line isn't really apparent yet - however, some things *are* certain... some people have made it their business to interfere and obstruct reasonable progress in enhanced gas recovery techniques - motivated by slobbering self interest and innumerate, deranged misanthropic religio-politcal ideology and an appetite / near obsession for exaggerated scaremongering.
These people will not shut up - as shale exploitation progresses they will seek to insinuate themselves yet again into the "what to do with the windfall" bit. I'll wager Moonbat is already sketching up something....
That's life I suppose - I do hope that robust language will be used to deal with the prominent activists and the parade of shallow opportunistic, ignorant fools that bray to order about Energy and Climate Change from their positions as elected representatives and senior government officials.
Game changer? - changing the rules of the game after the match to keep some control and gravy methinks...
@Dung, Tomo.
Bravo.
People don't seem to even be looking at the follow-on impacts on oil prices. If gas gets cheap it will put pressure on oil as well.
TinyCO2 wrote:
quote
If I was UKIP I'd be training up my members to put fracking and scepticism top of their agena and explain the whole thing to the public.
unquote
Pro shale, pro nuke if necessary (I'm hoping that it isn't because the lead time for nuke construction leaves us up the creek without a carbon-fibre mandolin), anti wind power except where subsidies are removed and the developer can persuade the local population that it's a good idea. However, try to explain this to the public when the MSM are pushing the line that UKIP is a one trick pony. The energy pony. The immigration pony. The tax pony. The EU pony... The defence pony... But I digress.
I've just spent a week working on an objection to a turbine. When every piece of legislation is against you, it isn't easy. I'm intrigued to discover that the rates on a million quid erection are about the same as a small tobacconist's.
In the Ipswich UKIP room yesterday a neat little anti-turbine leaflet was circulating with a fenbeagle cartoon on the front.
BTW, Tiny, if you join (£30) then you can push the views yourself. I'll be there handing out your leaflets for you.
JF.
According to auntie, tax cuts are proposed for shale gas firms. FoE and Greenpiss don't like the idea, they want more useless renewables, so the idea of tax cuts to encourage fracking must be good.
I wonder why the beeb only consulted the environmental idiots. Why do they never consult the man in the street, who might like cheap energy and a well-paid job?
http://www.bbc.co.uk/news/business-23368505
I have no training at all in economics, so this might be all b......x but am I just being naive in thinking that if there's lots of the stuff about then the prices will generally fall?
And if there's lots and lots and lots of the stuff - and everybody knows that there's enough to last for a very long time (many generations away into the future) then those prices will stay low and stable long enough to have profound economic and political effects?
Examples:
Oil of less importance to 'developed' world ==> Reduced influence of - and interest in - Middle Eastern religious/territorial squabbles.
Reduced rate of growth of CO2 emissions ==> Reduced 'scientific' influence of CO2 alarmists
New technologies focussed on exploiting gas directly in applications ==> esp transport & industry
Reduced requirement for coal/nuclear in electric power generation
@Phillip Bratby
The Sun reading man in the street is certainly in favour of exploiting shale gas, if the results of a recent poll they ran are anything to go by.
SandyS: absolutely. And the politicians and pollsters can do the sums. Lose the greenies - bad news. Lose all those Sun readers - much worse news. They will still try to keep the greens on board the best they can but when push comes to shove the maths will win.
Re Sun Poll etc:
Worthwhile noting that UKIP - who are polling at least as well as the Lib Dems right now - would find fracked gas right in the heart of their agenda.
They would stress its local origin (independence from 'foreign interference'), relatively low 'environmental impact', local jobs and potentially lower fuel bills. And it will spell the death of windfarms - and maybe solar. To my mind these are vote-winning points in today's politics.
It would be a brave alarmist who suggested that they are totally trumped by the theoretical risk of an unnoticed earth tremor or the poor experience of a Pennsylvanian hillbilly with a historic propensity for aquatic arson.
And I'm really looking forward to the Saturday morning town centre Fracas. with one side shouting
'Frack off you fracking frackers'
and the other
'What do we want? Fracking! Fracking! Fracking!
When do we want it? 'Now' 'Now' 'Now'
I'm sure Messrs Plod will be able to find several public order offences in that little lot
Richard Drake
The next General election will be an interesting time for the Greens. Voters cheesed off by falling (or at least, not rising) living standards may be less taken with a party primarily concerned with the life choices of a tiny minorty of people rich enough to have life choices. If I can propose a monstrous mixed metaphor, I think shale gas just shot the green's trojan fox.
@richard drake
'They will still try to keep the greens on board the best they can but when push comes to shove the maths will win.'
You are right of course.
But it also raises the question of just how many hard-greenies there are. And the answer is 'not a lot'.
Here's the Guardian on the 2010 elections:
Nationally, the Green Party's share of the vote actually went down 0.1% to 1%. In terms of vote share, the BNP (1.9%) and UKIP (3.1%) both did better than the Greens. Nearly twice as many voted BNP as did Green, while three times more people backed UKIP.
http://www.guardian.co.uk/commentisfree/2010/may/08/general-election-2010-green-party
And if anything, the tide has turned away from greenism since then.
So losing the green vote (which they didn't have anyway) would be no hardship to the Conservative party. But losing their Sun readership to UKIP would be a disaster. Wipe out time.
So expect to remember Davey's interview with Andrew Neil as the last gasp of the alarmist hegemony. A brave, if naive and doomed, to turn the clock back to the happy days of 2008 when green credentials were hip and cool. Those days will never return. Neither will Davey.
Yesterday's discussions in Parliament (Backbench Business on Shale) are worth a read if you have time Messrs Lilley and Stringer making good points
http://www.theyworkforyou.com/whall/?id=2013-07-18a.307.0#g323.2
Alan Kennedy: Their trojan fox has gone the way of the dodo. Tragic but true. :)
Latimer: The hard greens are of negligible interest, agreed - except insofar as they can galvanise the softer greens on a particular issue. But that ability dwindles also.
I was explaining to my sister yesterday how I've been left with no trust, as my default position, in anything greens now come up with - after looking into DDT as well as the global warming saga. She was asking about recycling. I had just been learning about the wonders of massage for babies - my sis having just become a grandmother and into all that kind of stuff. Massage for babies? I immediately trust the experts. The commercial viability of recycling x or y? Forget it.
I'm an edge case, needless to say, but the crowd will follow, in its wisdom. With their trojan fox shot down in flames where are the eco-warriors going to hide now?
I see Osbourne is trying to kick start shale gas production
http://news.sky.com/story/1117721/shale-gas-fracking-gets-generous-tax-breaks
and at the same time stick the boot into the idiots at DECC.
Interesting that in the UK "gas prices may drop BY 28%" whereas in the USA gas prices appear to have dropped TO 28%.
As for the so-called "tax break" - 30% is higher than standard Corporation Tax (as noted by the estimable Mr Worstall) so it's not exactly largess!
The water firms are trying to throw a spanner in the fracking works. You'd have thought they'd love the income from selling more water, but no. Perhaps it will ruin all their investments in useless renewables.
http://www.telegraph.co.uk/finance/newsbysector/utilities/10189331/Water-firms-raise-fears-over-shale-gas-fracking.html
It is not losing the green vote that bothers politicians; it is losing the support of opinion formers in the BBC, Guardian etc. who, because they themselves are pro-green, will depict politicians who want cheap, reliable energy as "nasty" people who care nothing for their grandchildren.
Irony Alert... (cf renewables)
Tory MP Peter Lilley, a climate sceptic who is an adviser on foreign policy in No 10, also does not believe the industry needs government help: "I think tax breaks are unnecessary for fracking, based on my knowledge of the oil and gas industry,"
http://www.guardian.co.uk/politics/2013/jul/19/george-osborne-tax-break-fracking-shale-environment
Cheap(er) energy? Oh noes!
Roy: I think that's the measure of it. But, as we've already said, their influence dwindles. Andrew Neil is the harbinger of the future.
Roy- what "green" vote?
At the last election the Green party got 285,616 votes.
About half that of those other well-known extremists, the BNP, who got 564,331 votes.
"I have no training at all in economics, so this might be all b......x but am I just being naive in thinking that if there's lots of the stuff about then the prices will generally fall?" - Latimer Alder
I think you will find that energy pricing in the UK is almost entirely dependent on "international obligations" rather than supply and demand ... and that is why die-hards are forecasting that pricing will remain high while others are either ignorant of "international obligations" or can see a way round them.
How long since "climategate"? Four years. And Australia still went carbon taxing. The Americans are out to kill hydrocarbons with a major push this year.
Don't forget the left and greens only fight the political battels with emotions. Since the science is settled that the greens projection machines are completely off their rails, one should shift to using the same weapons against them. It won't make much difference if everyone had a direct spigot to the gas field they controlled as long as the left and greens control the main lines.
Philip Bratby
I was ready to post that link to the DT but — for once! — was wise enough to read the thread first.
I detect the hand of the fragrant Deben in this bit of fear-mongering given his connections to the water industry. Would you agree?
All the information I have read on the subject of fracking would suggest that contamination of the aquifers is virtually impossible and these nasty "chemicals" that they will insist on using can be found lurking in (relatively speaking) considerably larger quantities in the average bathroom or under the kitchen sink.
I can't comment on the amount of water needed to frack but since it is surely the job of water companies to do their best to provide adequate supplies for whatever purpose the country decides it needs the stuff perhaps investment in infrastructure, including doing something about the unacceptable level of leakages, would be the order of the day.
If the GWPF wants to be treated as a content-free pure propganda organisation, they should continue with outragouesly misleading graphics of the type shown here:
http://www.thegwpf.org/sun-rising-bills-green/
Perhaps someone should have a word with them about misleading data representations?
Roy: We have already had the BBC this morning on 'Today' referring to TAX BREAKS being given by government to fracking companies (this made to imply tax avoidance carried out by bad people) while the terminology they use for fracking is always 'THECONTROVERSIALPROCESSOFFRACKING'', to which ENVIRONMENTAL BODIES OBJECT.
No mention of the financial benefits to the entire population and the energy security this will bring.
No attempt to put environmental concerns into context, they just leave it hanging in the air for
everyone to assume from just the mention of it that we are all going to be living on the Uk equivalent of the San Andreas fault.
Certainly, water security measures must the best that can be provided and the punishments for any sloppy work must be severe. The government need to show that this element is going to be more robust that in any other country. This is to re-assure the public that fracking is going to be carried out responsibly with all due caution and that site selection considers all factors and not just ease of extraction,
Don Keiller wrote:
Roy- what "green" vote?
At the last election the Green party got 285,616 votes.
About half that of those other well-known extremists, the BNP, who got 564,331 votes.
That is why I said politicians are not worried about losing those votes. However they do attach a lot of importance to certain sections of the media and they want to be seen as "caring." It does not actually matter what they care about as long as the media agree that they are nice and cuddly.
Jazznick:
It is calle "THECONTROVERSIALPROCESSOFFRACKING'' because something is controversial if the people responsible for "Group Think" at the BBC disapprove of it. If ordinary people have strong feelings about something and protest against it, e.g. the proliferation of windfarms, that does not make it controversial because ordinary people are not sufficiently well informed to have a worthwhile view on anything. The only exception to this rule is when ordinary people have properly absorbed the message that the BBC conveys.
I hope Cuadrilla and the other companies that get involved have a damned good PR department ready. They are going to get hit with some very virulent attacks- everything from extreme pollution of the soil to dirty money grabbing capitalists. This is not a rational scientific /economic argument. It is pure gut and emotion.
People must realise that the IPCC climate science was fabricated to persuade people to accept major increases in fossil fuel prices thereby expediting renewables, limiting the development of third world countries and slashing living standards in the West with a promise of green jobs.
The reality is that Agenda 21, from 1992 was created to satisfy the needs of three groups. The first is Marxist World government. They couldn't do this by War so they set out to do it by stealth, basically putting political activists in charge of academic science so the scam could be developed under the aegis of pal review.
The other groups are the Mafias who control renewables as part of property and drug money laundering - here it's centred in the W. Midlands, also the carbon traders centred in the banks like Deutsche, desperate to have something to fund the mortgage losses, and some of the oil and gas majors like Shell who bet the farm on it.
Now that the scientific scam has been identified, a false claim of 3x real GHE, and it is increasingly likely that lower atmosphere processes bypass the 'CO2-bite', meaning very low warming, if any, the game has changed. It's now about saving as much of the carbon trading as possible by naked political warfare such as blocking fraccing. However, that is dependent on a united front by the furl companies. Centrica has broken from the pack which wanted to keep fossil fuels ion the ground to maximise profits. The reason is that gas prices are coming down so it either gives up competing or it gets its own shale operation.
The key issue is who is funding the likes of Lucas - is it the big banks like GS and Deutsche, whose aim is to control carbon as a replacement for fold, or is it the Mafia, or maybe it is government with its supply of funds for lobbyists and the lobbyists are intent on keeping their public funding, sheer self-interest?
The game is changing fast now that the fake science is dying and the STOR diesel generators blow away pretence that the windmills save fossil fuel imports, when they actually cause more CO2 and fuel use than without the windmills in our grid.
'fold' = gold, not folding money.....
We are SOOOO missing a trick, guys (and guyesses) - we really should be banging on day after day about the pathetic output from all those eye-wateringly expensive wind farms - e-mails to the PM just pointing out to him in words of one syllable so that he can understand, that (e.g.) The London Array will NOT power 'half a million homes', but over the last few days, more like a small housing estate...
Surely to goodness in a few years time we (or the rest of you, because I'll be pushing up daisies) will look back on this period and think: 'What DID the government think it was doing..?'
@Roy, I wasn't disagreeing with you, just pointing out there was no green vote to lose.
BTW I didn't know that the loss-making "guardian" had 285,616 readers in 2010.
How many now?
Just WHO subisidises this propaganda mouthpiece?
The ghastly Harrabin is at it again.
I think I detect a whiff of somebody still trying to patronisingly frame the debate / set the agenda - albeit a bit lamely...
What's clear is that he's expecting (last paragraph) his mates at DECC and elsewhere to obstruct the licence process - and I know something about obstructing energy related licences - having been obstructed by foul means in the matter of a small hydro power scheme for nearly four years now by that close relative of DECC - The Environment Agency.
At the moment the greenified establishment is sitting on its hands because every proffered reason to not proceed has been evidenced as false - they are now I think looking to use the traditional methodology of delay and abuse of process to further obstruct.
I note three BBC radio reports about Osborne's project tax relief studded with words like "shameful" and "outrageous" - pot , kettle?
The so called and self appointed Guardians of the planet are spitting feathers... I hope they choke personally.
tomo
Fiends of the Earth have said so in so many words — local objections, appeals (where possible), judicial review. Any legal (and possibly even some less than legal) means to prevent fracking.There'll be a reference somewhere (Daily Mail, I think). I'll post the link when I find it.
Exxon admitted that it lost its shirt on shale after buying XTO Energy. Chesapeake is selling off most of its gas assets because it needs much higher prices just to break even. The entire US shale gas industry is moving to reposition itself as it moves towards shale oil. You would think that after the UK investors got their brains bashed in after they bought the American housing story and loaded up on high yielding junk paper they might think twice accepting the shale story when the data is showing that none of the large projects are self financing.
Mike Jackson
(1)The first weapon is delay = holidays, single points of contact, "in meetings" and all around non availability (probably based in large part on abuse of leave time...) They will not be keen to define the start of the determination of any licence - as this starts the clock - the Penfold 91 day clock for arriving at non planning government decisions - so expect obtuse non committal language about any licence.
Then silence, poke them a bit for a progress update and they'll likely ignore you - but maybe not somebody (e.g. MP) you've got on your side possibly who they are required to answer to - they'll tell them that " it's all terribly complicated " They then screw up the licence administratively and whoops! - Judicial Review (been there and "won") - and back to (1) again.... as they try to get their way.
Two possible remedies:
Conspiracy to Defraud
Misconduct in Public Office
Both address the individuals with direct control of the process - there is also thirdly - The Civil Servant's Code of Conduct which is legally binding under the terms of The Constitution and Governance Act 2010.
I thing we are moving towards an Admiral Bynge situation - there are individuals (groups of them even better for Conspiracy to Defraud) who are actively obstructing and spreading disinformation in the form of ministerial briefs etc...
Really , nicey - nicey ain't gonna work.
Vangel - caveat emptor
I might sound like an enthusiast - but I've seen some truly epic screw-ups in mineral and oil and gas exploration - and I'm *not* saying shale is going to be a success - I just think that it should be tried out ASAP and view most of the present scaremongering as trash spouted by idiots - or worse.
Vangel
Companies want to frack in the UK, they make the investment, do all the work, jump through hoops to satisfy safety regulations and pay shedloads of tax. How do we lose?
Steveta_UK
Perhaps someone should have a word with them about misleading data representations?
You are aware that it is (and is identified as) a re-post from the Sun? Perhaps you should try the Press Complaints Council.
I never thought I'd say this, but David Shukman gave a VERY BALANCED summation of the shale gas situation on Radio 4 yesterday - amazingly free of dramatics and doom. Probably because he's been spending time in the States looking at the reality of the process...
You'd hardly believe he worked for the BBC - do you suppose those at the top have realised the error of their ways..?
Probably a wish too far...