Energy Supply – Is ‘fracking’ just a short term distraction?

It is clear that fracking carries a number of risks, environmentally it will still result in large quantities of CO2 emissions and for the UK it has an extremely limited lifespan.  Perhaps the Government should consider investing the time and money that they plan to invest in fracking, into renewable energy?  

Source: http://occupydenver.org/

A few years ago very few had even heard of the term Fracking, let alone understand what it actually is.  Nowadays with the amount of publicity relating to our over dependence on fossil fuels (a depleting resource), together with the negative impact on the environment due to greenhouse gas emissions when fossil fuels are burnt, there has been a realisation that we need to find alternative ways of providing our energy to meet our increasing demand. 

In the UK our need to find alternative ways of creating energy is critical. In June 2013 MSN News highlighted the urgency of the problem in respect of our electrical supply: ‘The UK's ability to produce enough electricity for the nation has been declining. Ofgem predicts that the amount of spare electricity production capacity could fall to as little as 2% by 2015. This will mean more likelihood of supplies running low enough to cause blackouts’. In May 2013 The Guardian reported similar issues in respect of our gas supply: ‘Some of Britain's biggest energy suppliers were holding back gas in storage tanks at a time when the market ran into an acute shortage two months ago, triggering a doubling of wholesale prices. The revelations came after claims the UK was within six hours of running out of gas completely on 22 March and will feed rising public and political anger over soaring power bills and previous allegations of market manipulation’. Make no mistake the problem is serious, and although we can import to supplement any shortfalls, this will come at a cost, a cost that we have little control over.  If we want to keep our country ‘running’ and as numerous politicians have put it ‘ ensure that the lights do not go out’, we need to find alternative ways of creating energy and find them quickly.  

Fracking is a method of extracting natural gas and oil from shale, which is a technique that has been used for decades in the United States.  ‘Horizontal drilling (along with traditional vertical drilling) allows for the injection of highly pressurized fracking fluids into the shale area. This creates new channels within the rock from which natural gas is extracted at higher than traditional rates. This drilling process can take up to a month, while the drilling teams delve more than a mile into the Earth’s surface. After which, the well is cased with cement to ensure groundwater protection, and the shale is hydraulically fractured with water and other fracking fluids. – Source:  http://www.what-is-fracking.com/   The video below provides an animated demonstration of the fracking process:         

So how much shale gas could we expect to extract in the UK? The answer appears to be inconsistent depending on what you read, with estimates suggesting that shale gas could meet demand in the UK for anything between 25 and 40 years – According to the Guardian in June 2013:

‘Britain is sitting on shale gas deposits that could supply the UK for 25 years, suggests an independent report that ramps up previous estimates for the controversial energy source. New figures published on Thursday by the British Geological Survey (BGS) indicated that the amount of shale resources, mainly sitting under the north of England, will trigger a new dash for gas. BGS published a long-awaited report that suggested an area stretching from Lancashire to Yorkshire and down to Lincolnshire could hold at least 1,300 trillion cubic feet of gas.’ 

Source: http://www.bbc.co.uk/news/science-environment

Energy Minister, Michael Fallon, has stated it would be "irresponsible" not to take advantage of this resource, which has transformed the US and could provide energy security, if not cheap prices, for Britain.  This view however is extremely short term.  The US is far larger than the UK and has a much greater capacity to produce shale gas over a longer period of time. Estimates suggest that shale gas in the US and Canada could meet demand for nearly 100 years!  In the UK, even if we were to produce 40 years worth of energy from shale gas (which is at the top end of estimates) then this will not solve our problem once this resource has been exhausted.  It is a little disconcerting that our own Energy Minister cannot look at the issue from a more sustainable and long term point of view and focus our strategy and resources on renewable energy.  No doubt the Government will argue that they are already doing this, however, it is clear that our dependence of fossil fuels is far too great and something that we cannot sustain and must address much more rapidly.  Focussing on extracting shale gas through fracking is a short term distraction which is avoiding the real issues of providing energy in a renewable and sustainable way and is just papering over the cracks.

Natural gas when burned produces half the CO2 that coal does when burned (http://blogs.reuters.com) Therefore gas produced through fracking may reduce our need to burn coal, however it will still produce large quantities of CO2, something that does not happen with renewable technologies.  If we focus our strategy on renewable energy then this will significantly reduce greenhouse gas emissions in the UK and help us reach or 2050 emissions targets.  Why waste time and money in extracting shale gas through fracking when surely it would be better to invest this time and money in renewable energy?

There are also concerns particularly in the US about the amount of water used in the fracking process as well as the possibility of contamination of water supplies due to the chemicals used in the process.  Recently in the UK fracking has also been attributed to be the cause of a number of small earthquakes.  The British Geological Survey reported: ‘On 1 April and 27 May 2011, two earthquakes with magnitudes of 2.3 ML and 1.5 ML were detected in the Blackpool area. These earthquakes were immediately suspected to be linked to hydraulic fracture injections at the Preese Hall well, operated by Cuadrilla Resources Ltd. This well was hydraulically fractured during exploration of a shale gas reservoir in the Bowland basin. As a result of the earthquakes, operations were suspended at PH1 and Cuadrilla Resources commissioned a number of studies into the relationship between the earthquakes and their operations’

It is clear that fracking carries a number of risks, environmentally it will still result in large quantities of CO2 emissions and it has an extremely limited lifespan.  Perhaps the Government should consider investing the time and money that they plan to invest in fracking, into renewable energy?  Our reliance on fossil fuels has to be addressed urgently.  Focussing on extracting shale gas, which is still a fossil fuel, is really a way of avoiding the main issue, something which many politicians appear to be extremely good at!   

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Green Deal – Five reasons why take up is so slow

Unless awareness is significantly increased and consumers can be convinced that the scheme will provide financial benefits to them, then unfortunately the Green Deal will be doomed to failure.

Source: http://www.eecuk.co.uk/

At present it seems that whatever you read in the press or hear in the media about the Green Deal, is nothing but negative.  A chaotic, confusing and frustrating image is painted of something that the Government had hoped would have members of the public scrambling for energy efficient enhancements to their buildings.  This was all based on the premise that any costs for these enhancements would be ‘absorbed’ by the savings that would be made on future energy bills, something referred to as the Golden Rule. Therefore, the cost of any enhancements should not be noticed by the consumer or business. Seems very simple doesn’t it? So why has take up been so slow (some would argue embarrassing!) since the Green Deal was officially launched on 28^th January 2013?

On May 15^th 2013 Knauf Insulation warned that ‘the latest Green Deal statistics, released by the Department of Energy and Climate Change (DECC), showed that it would take more than 200 years to reach the Government’s target of tackling 14 million homes, if the current rate of assessment continued….Data shows that 38,259 assessments have been carried out, resulting in just 245 plans being put in place – an embarrassingly low number that tells you everything you need to know. Behind the scenes the project has been mired in IT and other (legal) delays and, most depressingly for those who have trained as assessors, very few consumers know anything about it’

You may occasionally hear the odd Conservative Member of Parliament or representative from the insulation or renewable technology industry trying to put a more positive spin on the prospects of Green Deal however even in these instances you often feel that they are trying to convince themselves as much as the rest of us.  In short the introduction of Green Deal has shown that there are fundamental flaws in the way the scheme has been set up, the way it has been publicised and the way in which the general public perceive it.  Below I offer some suggestions (in no particular order) of why the Green Deal has so far struggled to have the desired impact:

Source: http://www.thegreendealfactory.co.uk/

1.  The Golden Rule suggests ‘no cost to consumer’?  - The principle of the Golden Rule is good as long as it works, however after making initial enquiries the consumer will soon find out that there are financial implications attached which will impact on them personally.  For example, they will be informed that there is an upfront cost of around £100 for a Green Deal Assessor to visit their property to undertake an inspection and assessment and to make recommendations for enhancements that will meet the Golden Rule.  The Green Deal Assessor will then produce a Green Deal Plan for which the consumer can then approach approved Green Deal Providers in order for the enhancements to be installed. The costs for these enhancements can then be financed through a loan, with interest currently set at 6.9%.

It will be extremely difficult to convince members of the public that taking up a loan and paying an upfront Green Deal Assessment fee, will not be a financial burden to them.  If Green Deal enhancements are implemented, even though there may be cost savings for future energy bills, most consumers live in the here and now, not the future, and will be more concerned with their immediate finances. This is where I think the Government have made an error, by underestimating the public perception of the scheme in the first place.

2.  Poor publicity – People just do not know about it. - Whatever has been done to date to publicise the scheme has not worked:  ‘Awareness about the Green Deal has been steadily rising, growing from 10 per cent before the scheme launched to 22 per cent last month (June 2013), according to latest figures from the Department of Energy and Climate Change (DECC). This follows a £2.9 million communications campaign by the Government when the Green Deal launched. But today's survey findings suggest that building awareness remains a major marketing challenge for many companies and there are growing calls from the industry to do more to incentivise take up of the Green Deal. Source: http://www.greenwisebusiness.co.uk

Awareness of the scheme is one thing however it would be interesting to find out what level of awareness the 22% above actually have.  For example, is their awareness restricted to having heard of the Green Deal or do they actually know about the scheme and how it works?  From the experience I have when talking to people I would suggest that it will more than likely be the former.

3.  Beset with problems – Financing, IT, Training Assessors – There has been a lot of publicity about these problems, not just after the Green Deal’s implementation but many months before.  ‘Energy Minister Greg Barker has blamed the lack of take-up on delays with setting up software systems to manage the Green Deal and funding problems for the long-term finance plans people take out to pay for the upgrades’. http://www.greenwisebusiness.co.uk 

Although these problems will have an impact on progress of Green Deal, they almost become irrelevant if consumers are not interested in the first place and do not take up the scheme.  Also, Green Deal has been years in the making and you would have expected these issues would have been ironed out before the scheme was implemented.    For the Energy Minister to blame the poor take up on these issues is a poor indictment of the way the scheme has been developed and implemented by the Government.

4.  Possibly seen as ‘blight’ to property as loan stays with the property  - One of the core principles of Green Deal is that the ‘loan’ belongs to the property and not the individual.  Therefore when property is bought and sold, any outstanding payments will become the responsibility of the new owner and deducted via their energy bills. This is an additional check that a Solicitor will need to make during the conveyance process.  Again, those who do not understand the scheme are likely to see this as an additional debt, which they may not have chosen for themselves and one that they may not be prepared to take on.

5.  Lack of interest in the environment and understanding of technologies - As much as many may want to contribute to a reduction in greenhouse gas emissions, the vast majority of people will undoubtedly be motivated by the financial benefits 'signing up to the 'Green Deal' will bring to them, and herein lies a potential problem.  Many will have little to no knowledge of the numerous enhancements/renewable technologies that could be installed in their property.  In the event that a consumer proceeds with a Green Deal, it is likely that there will be confusion in the way that enhancement/technologies are used efficiently, which could actually prove to be very cost ineffective. It could prove to be difficult therefore to convince large numbers of people to sign up to a Green Deal scheme when they may have no interest in the environment, will not have any desire to learn about new technology and will not be prepared to take on any financial burden.  Basically, there will be people (and these could be in large numbers) who will just not be interested.

In summary, I have stated in a previous article that in principleGreen Deal is a good idea.  The problem however is the difference between in principle and in practice.  In practice although Green Deal is still in the early stages of implementation where it appears that the general public are both not aware and not convinced by the scheme, which is demonstrated by the extremely disappointed take up to date.  Unless awareness is significantly increased and consumers can be convinced that the scheme will provide financial benefits to them, then unfortunately the Green Deal will be doomed to failure.

Please feel free to share this article and other articles on this site with friends, family and colleagues who you think would be interested

Information/opinions posted on this site are the personal views of the author and should not be relied upon by any person or any third party without first seeking further professional advice. Also, please scroll down and read the copyright notice at the end of the blog.