This is a reposting of something I put up last week on my energy blog:
Recently David Cameron has been letting slip many signs that he, like many Tories, has fallen for the fable of Shale Gas as the snake oil cure for all ills, hook line and sinker. He absurdly suggested that shale gas had driven down energy prices in the US so much, that factories were moving back from China to America and the same thing could happen in Britain.
Before going any further it would be useful to set the facts straight:
There are many reasons for a company to move a factory, energy costs are just one of those, and given that energy costs in China are still lower than in the US, it would be bizarre for a company to move out of China to the US only to pay more for energy if this was the sole deciding factor.
The supposed link between Shale Gas and the 2007 drop in US wholesale gas prices is dubious at best. As I discuss (here) and Gail Tverberg also discusses, shale gas is relatively expensive (compared to conventional gas) and the bulk of the ramp up in Shale gas production occurred well after the price drop occurred (as in at least a year or two). So the only way Shale gas could have had an influence on price is if there was mass manipulation and price fixing of the energy markets (which would have been illegal), as speculated on here.
While certainly fracking has become a major source of energy in the US, as I discuss here it represents about 35% of US gas production, but thats only about 8% of US overall energy consumption. Hardly a cure to all of Americas long term energy problems.
Shale gas has NOT made the US a net gas exporter, contrary to what certain right wing think tanks would have you believe. As EIA statistics show, while the US exported some 1,619 billion Cubic ft of gas, America also imported some 3,135 billion Cubic ft of gas.
There are indications that the shale gas boom is starting to run out of steam. Reports by authors such as David Hughes, as well as official data from the EIA, suggest that shale gas is approaching peak production. There is a big question as to whether production will stabilise (i.e. all this trouble for just 8% of US energy production) or decline rapidly, as individual shale gas wells tend to have very rapid decline rates. All in all however, its likely that the benefits of shale gas will be short lived.
As I also discuss in more detail in a prior post, there is a huge question mark as to how much of the UKs shale gas is viable. Reports suggest it might be only able to meet a tiny fraction of the UKs energy consumption. While its supporters often point to the very large quantities of shale gas trapped underground, this ignores the fact that there is a world of a difference between proven reserves and reserves in place. i.e. were still sitting on a several hundred years worth of coal supply, but I dont see anyone arguing for us to bring back coal mining.
In short like so many on the right, David Cameron has fallen for this outrageous myth. And rather than do some basic fact checking hes instead embellishing on that myth with yet more absurdities of his own. He reminds me of those celebrities who end up part of some crazy cult. And the problem is that he is now writing the UKs future energy policy on the basis of a fantasy divorced from reality.
Hes dismissed renewables as green crap and cut back on policies aimed at energy conservation, both of which were crucial to the UKs long term energy policy. as well as allying himself and the UK with arch-denier Canadian president Stephen Harper against the rest of Europe. An important point given the much higher carbon emissions from shale gas compared to conventional oil and gas, as I discuss here. And ironically his obsession with Shale gas is likely to be to the detriment of the nuclear industry he has also favoured with lavish subsidies.
Hence we must confront this snake oil salesmanship tactics for shale gas, now before it leads to a mess that it will take decades to undo.