Struan Stevenson: Shale power would be a rock solid investment

A SHOCKING 900,000 Scottish households are in fuel poverty, meaning they are unable to afford adequate warmth in the home. And the rising bills causing strife to families and businesses across Scotland are in no small part due to the billions of pounds in subsidies paid directly by consumers to energy companies to fund the Scottish Government’s vision of a renewable-powered future.

One alternative solution may be through the exploitation of our potentially impressive reserves of gas from an as yet untapped source. Extracting this fuel – mostly “shale” gas trapped in sandstone underground – may help us reduce our dependency on imported gas from geopolitically sensitive areas such as Russia and the Middle East. The SNP government must recognise that shale gas is likely to be a major part of the global energy mix for the foreseeable future and they must therefore at least consider the capacities of extraction technologies. Yet sadly they seem lukewarm in their desire to do so.

A recent initiative by Australian-owned Dart Energy (Europe) Ltd to sink a £1 million test bore at Airth, near Falkirk, in a bid to extract huge reserves of methane gas from coal seams, has come in for criticism from Green groups including Friends of the Earth Scotland, WWF Scotland and the Green Party. Meanwhile, the SNP government has been slow to discourage such blanket opposition, perhaps in part for fear that the development of a buoyant shale gas industry in Scotland would reduce gas prices dramatically and further undermine the already shaky economic arguments underpinning the renewables sector’s rapid expansion.

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In America, such has been the success of shale sources that gas prices have plummeted. US imports of liquefied natural gas have fallen from over 100 billion cubic metres (bcm) per year to just 20 bcm in 2011. Prices for American consumers have dropped by 30 per cent. Of course, the process for extracting shale gas has its critics. Hydraulic fracturing or “fracking” is a method of retrieving shale gas by injecting chemicals, water and sand into shale rock formations under high pressure. WWF Scotland has voiced concerns around the process, including the contamination of water supplies by the fracking fluids and from gas leaking into water supplies, creating a risk of explosions. They also claim that fracking caused a 1.5 Richter magnitude earthquake during exploratory drilling near Blackpool in 2011 and they have been urging the SNP government to follow the example of France’s National Assembly by banning the process altogether.

But shale gas producers in America, like Shell, say they can avoid these risks. They claim that as long as well-shafts are properly sealed with concrete, there is a negligible risk that fracking will contaminate groundwater. They also insist that by eliminating venting and flaring, methane emissions can be kept to an absolute minimum and the risk of earthquakes, a long-present threat in conventional oil, gas and even coal extraction, can be monitored and controlled. The International Energy Agency says that implementing such precautions will add 7 per cent to the cost of shale gas – a cost that the industry says is an acceptable price to pay for a healthy and rapidly expanding sector.

As for the impact of emissions, the industry points out that shale gas produces only half as much CO2 as coal. Exploiting shale gas would therefore lead to a dramatic fall on present emissions levels. In fact, in the US, emissions have fallen by 450 million tonnes in the past five years, more than any other country in the world. Yet, ironically, those in the EU have actually risen over the same period due to the increased use of coal-fired energy, because of the rising price of imported gas.

So Scottish consumers face a double whammy at the hands of the renewable energy lobby; we are witnessing a relentless rise in our electricity bills to meet the cost of unreliable and heavily subsidised wind turbines, while at the same time, gas prices are rocketing to meet increasing demand caused by the need for back-up energy sources to cover the 75 per cent of the time that wind turbines stand idle.

Meanwhile, our chance to explore the capacity to exploit potentially enormous shale gas supplies in Scotland, which could cause gas bills to plummet and create thousands of new jobs, is being quietly stifled by a chorus of protests and a Scottish Government fixated on wind. «

» Struan Stevenson is a Conservative Euro MP for Scotland and president of the Climate Change, Biodiversity and Sustainable Development Intergroup in the European Parliament