One side-effect from the ruckus generated by the phony candidature in the Corby by-election of James “saviour of Western civilisation” Delingpole and the sting on his clueless pal Chris Heaton Harris by Greenpeace is that the energy preferences of newly promoted Tory ministers like John Hayes are being subjected to public examination. And thereby hangs the problem.
Hayes is another Tory who has become enamoured of shale gas as the solution to all our energy needs. This may be linked to the incessant plugging of shale gas by Telegraph regulars like Christopher Booker, who asserted earlier this month that the USA was benefiting from “the shale gas revolution that has halved gas prices”. The Murdoch owned Wall Street Journal has also been promoting shale gas stories.
But, as I’ve noted previously, the supposed cheapness of gas from shale may not be all that it seems. Overproduction, and a glut of gas that has had to be sold off at lower prices just to raise revenue, are not a route to the much trumpeted energy self-sufficiency that some are promising for the USA in the near future. And the question of actual versus estimated reserves keeps rearing its head.
As Nafeez Mosaddeq Ahmed has pointed out in a piece for Independent Voices, Chesapeake Energy, a firm at the forefront of shale gas exploration in the US, had to sell off gas fields in September to raise $6.9 million and thereby stave off collapse. Production from shale gas wells can drop off by between 60 and 90 per cent in the first year of operation. It may not be so cheap to extract.
Certainly the estimates issued by Cuadrilla Resources after test wells were drilled in Lancashire recently have not been independently confirmed, but they have been widely disseminated by the climate change denial and anti-wind power lobbies (which to no surprise at all all too often coincide in their membership) as if they were fact. They are not, and ministers need to bear this in mind.
The decline rate in yields could rapidly make shale gas production unprofitable: as Ahmed notes, a former Amoco petroleum geologist has cited one area of Texas where the decline rate is so high that just to maintain current production levels would mean drilling almost a thousand more wells a year. The level of investment needed for that inevitably diminishing return would be into the billions of dollars.
On top of all that, there is a growing public resistance to the side effects of the hydraulic fracturing, or fracking, process and the use of millions of gallons of water, generally laced with a cocktail of occasionally carcinogenic chemicals, needed to get the gas out. All of this is likely to make shale gas an increasingly difficult sell for Hayes and his fellow enthusiasts. And the Lib Dems won’t be buying it.
But Del Boy and his pals will keep up the barrage of abuse. No change there, then.
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