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The UK elections – Energy, climate and shale gas

With the UK elections only days away, climate change continues to grab headlines.  The country’s energy agenda remains a perceived vote winner. All the major parties have pledged to decarbonise production, increase energy efficiency and support the development of low carbon and green technologies. Whatever happens on May 7th, expectations are also high for the COP21 climate conference in Paris later this year.

While the previous Coalition Government embraced the role shale gas could play in cutting the UK’s CO2 emissions whilst ensuring a more secure, reliable and affordable supply of domestic energy, what position are the political parties taking as we head towards yet another closely contested British election?

Shale Gas Europe looks at the state of play for shale gas in the UK and what impact the election could have on development.  

State of Play:

The UK is leading the charge in terms of shale gas development in Europe and is one of the strongest and most vocal supporters of its development. Over the last year many measures have been implemented to promote and facilitate its development.

  • Legislative:

In February 2015 the former Coalition Government passed its most extensive legislation covering shale gas: the Infrastructure Bill. The Bill sets out guidelines as to how and where shale gas development can take place. Further legislation is expected post-election to clarify and define certain clauses of the Bill.  Also expected after the election are the results of the 14th onshore licensing round which should provide more clarity as to how widely shale gas will be developed in the UK.

  • Economic:

The previous Government clearly stated that communities and local regions must benefit from shale gas development. In January 2014 it was announced that local councils will keep 100% of business rates from shale gas sites and an additional £100,000 when an exploration site is hydraulically fractured. During the Autumn Statement in December 2014 the Chancellor of the Exchequer also proposed a potential North of England Sovereign Wealth Fund which would seek to ensure that the benefits of shale gas are enjoyed by future generations. On top of this several educational and research initiatives have been launched to position the UK as an EU learning and development hub.

  • Environmental:

In line with the EU’s Recommendation, any shale gas development in the UK will take place within an environmentally sustainable framework. A specific Taskforce on Shale Gas was therefore set up to provide an independent review of the risks and benefits of hydraulic fracturing. The taskforce is expected to release several reports in 2015.

What are the parties’ positions on shale gas?

Analysis of election manifestos indicate that the Conservatives, Labour and the Liberal Democrats are generally in alignment when it comes to shale gas. All support its development within an environmentally sustainable framework and acknowledge the role it could play in helping the UK address its significant energy challenges and help meet its ambitious climate change targets.

Of all the parties the Conservatives and The UK Independence Party (UKIP) are the strongest advocates. The Conservatives have stressed that local communities will benefit from any development in line with the commitments made last year. UKIP plans to levy money from development for lower council taxes and community projects.

The Liberal Democrats have announced that they plan to establish a Low-carbon Transition Fund using 50% of any tax revenues from shale gas to fund “energy efficiency, community energy, low-carbon innovation and renewable heat”. Labour is more vague with a general commitment to develop shale gas under a robust environmental and regulatory regime.

With a moratorium in both Scotland and Wales, the Scottish National Party and Plaid-Cymru remain the most sceptical alongside the Greens who are directly opposed. Northern Ireland’s Democratic Unionists Party does not specifically mention shale gas but does stress that ensuring energy security in terms of supply and cost is a priority. Sinn Fein makes only an ambiguous commitment to the green economy.

What does this mean for shale gas?

Whichever way Britons vote in the General Election on 7 May, it is highly likely that shale gas will remain firmly on the political agenda.

The UK is facing some critical energy challenges. With North Sea production in decline, energy imports are continuing to increase with exports at their lowest level since 1980. On top of this the UK is committed to some very concrete climate change objectives which include reducing emissions by 50% of 1990 levels by 2025. Negotiations at COP21 are also likely to increase the pressure to cut emissions further.

Future policy makers will need to be more pragmatic if the UK is to strike a realistic balance between security of supply and affordable prices, while continuing to cut emissions. Alongside the UK’s continued investment into renewable energy, shale gas could be part of a much broader solution as the country continues to reduce its dependence on more carbon intensive fossil fuels.

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