This page contains a Flash digital edition of a book.
OPINION


BEWARE THE RACE FOR SHALE GAS


Not only will the race for shale gas be long and diffi cult, it also poses a threat to improving energy effi ciency and meeting renewables targets, warns Alan O’Brien


and Poland – will also need to drill, if supplies are to signifi cantly swell and infl uence international wholesale spot prices. Consequently, international gas


prices could become an additional threat to the commercialisation of UK shale. If Europe’s leading gas exporters lower natural gas prices, expensive shale exploration could end up in limbo, becoming less cost-effective, further reducing investors’ appetite and confi dence. Furthermore, companies involved in


shale gas exploration face formidable challenges from within their own industry, local communities and environmental groups. There are also clear environmental risks, which may be overplayed and exploited to generate public concern and kill it at conception. Despite this, the lure of dividends,


The topic of shale gas exploration is very much in the news at the


moment, but it is clear that the anticipated benefi ts for business, the economy and consumers will not be realised for some considerable time. In the meantime, there is a real danger that this focus on shale gas will result in the government taking its eye off the ball when it comes to energy effi ciency and renewable energy. So, while the Prime Minister is being


very bullish about creating thousands of jobs and adding billions of pounds to the economy, he runs the risk of cutting off his nose to spite his face. In the past, gas was seen as a bridge


to renewables. Now, with the UK’s commitment to shale exploration, gas is being described as a ‘destination’ fuel. Given the right market dynamics and conditions, this could leave the government’s 2020 renewables target completely stranded. In offering this ‘lifeline’ to many


more years of gas availability, the prospect of shale gas could also dilute efforts to minimise fossil-fuel use through improved energy effi ciency.


32 CIBSE Journal March 2014


False expectations? The government hopes that cheap energy from shale will boost the economy on a scale seen in the US, where fracking has played a major part in its economic recovery. However, there is no guarantee that shale gas will deliver on these expectations in the UK. As Fatih Birol, chief economist


and International Energy Agency director of global energy economics, commented in the Daily Telegraph (30 January): ‘The UK has signifi cant shale gas resources but people shouldn’t expect a US-scale energy revolution in the UK – the conditions are not as favourable as in the US.’ His comments came after energy minister Michael Fallon unveiled a raft of incentives designed to encourage shale gas fracking across the country. A major stumbling block


results from the ‘spot prices’ in the international wholesale gas market. Whichever way you look at it, the UK cannot ringfence itself from wider international market conditions. And, in my view, other countries with large shale reserves – such as France


While the Prime Minister is being very bullish about creating thousands of jobs, he runs the risk of cutting off his nose to spite his face


the prospect of boosting the economy, profi t-sharing for communities and local authority tax breaks would all appear to make the dash for shale gas inevitable. However, we believe the government


is missing a trick. What has been – and still is – the most overlooked and underrated sector in the energy diversifi cation debate is energy effi ciency. The energy that we don’t use now is effectively a carbon-neutral source of energy that will be available to us in the future. Frankly, I can’t see how the government will meet its long- established commitment to reduced carbon emissions and lower gas prices if the UK is to forge ahead with a shale programme. Rather than focusing solely on shale gas, therefore, I would like to see the government continuing to invest in renewable energy sources and energy-effi ciency measures that will reduce our consumption of fossil fuels. Then, if shale gas does deliver the benefi ts the government anticipates, that’s an added bonus.


● ALAN O’BRIEN is CEO of Sabien Technology Ltd


www.cibsejournal.com


RANDI SOKOLOFF / SHUTTERSTOCK


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80