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How much do you know about fracking? Is it as dangerous as people say? Or is the real risk to the UK down to the carbon it will produce?
It's impossible to have a proper debate without all the facts. But fracking, like many environmental issues, are either sensationalised or just ignored by the mainstream media. That's why we're taking matters into our own hands and launching a new Energy Crunch bulletin.
Every fortnight, we'll e-mail interested supporters a round-up of the latest news stories on energy, climate change and the environment, along with analysis of what they mean for our vision of a sustainable economy. We'll let you know what really matters, and what news you can't afford to miss.
In this week’s update we’ve focused on the serious cracks now appearing in the argument that unconventional oil and gas might be a sustainable energy source. Just take a look at the graph below, comparing US rig count with oil production. It seems the recent surge in production, largely dependent on fracking, could soon be over.
AUGUST 9, 2013 // BY: SIMONE OSBORN , EDITOR, ENERGY CRUNCH
Three things you shouldn't miss this week:
- US rig count vs oil production. Is the recent fracking-fuelled surge coming to an end?
Source: Stuart Staniford, Early Warning Blogspot
- Despite the boom, higher costs are pushing Big Oil into a slump(AP)
- Commodity super-cycle in rude health despite shale (Telegraph)
George Osborne, the newly appointed minister for shale gas development, might have expected some rough headlines this week, but he could hardly have guessed who would supply the fuel.
The reaction of the residents of Balcombe in Sussex was predictable enough, but it was hardly helpful when his own father-in-law, Lord Howell, told the House of Lords nobody would care if fracking took place in “uninhabited and desolate” north-east of England. Still less when he said he had mis-spoken and really meant the north-west. What, desolate as in the Lake District?
Not to be outdone, junior minister for shale gas development Michael Fallon railed against southern nimbys and looked forward to seeing how the “commentariat” would enjoy “flaring at the end of the drive!” It’s almost enough to make us sympathise with executives at Cuadrilla, who must be thinking ‘with friends like these…’
Through the red-mist of their fracking-fever, ministers might like to note, however, that drilling licences have been issued in many of their own constituencies, posing a particular threat to Tories in the cabinet. Still, perhaps that threat will come to nothing. Lord Deben, chairman of the Committee on Climate Change, and a former Tory minister himself, tweeted sweetly: “How very inconvenient of shale gas to choose places where planning permission will be most difficult”.
Whatever your position on fracking, it is clear that some serious cracks are now appearing in the story of unconventional oil and gas as a sustainable energy source in any sense of the word. Shell was forced to write off more than $2 billion on liquids-rich shale assets that hadn’t delivered — prompting analyst Oswald Clint at Bernstein Research to write “shale oil bulls take note!” Our chart of the week suggests the recent surge in US oil production, depending entirely on a massive increase in fracking, may soon be over.
The results of the other super-majors were hardly better (see FT headline: ‘Big Oil: vanishing act’), as they struggle with higher costs, falling output and dwindling returns. As Ambrose Evans-Pritchard points out in the Telegraph, “output of the big five oil majors — Exxon, BP, Total, Chevron and Shell — has fallen by 26pc over the past nine years, despite a relentless hunt for new fields”.
Evans-Pritchard sees fracking as a ‘godsend’, but to us it is looking more like desperation. Sure, fracking — if it ever gets past public opposition — may feed the beast for a little longer. But then what? Regardless of when the oil peak arrives, carbon content of existing oil and gas reserves dwarfs that which we can afford to burn while standing a reasonable chance of keeping global warming below 2C. One way or another we have to get off fossil fuels, and fast.
ISSUES
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