UK shale gas not at odds with climate targets: report

Reuters News
Posted: Oct 17, 2012 8:38 AM
UK shale gas not at odds with climate targets: report

LONDON (Reuters) - Britain can exploit its shale gas reserves without worrying about meeting its targets to cut carbon emissions, provided the government continues to support green energy, consultancy Poyry said.

Environmentalists have voiced concerns that a boom in shale gas production in Britain could have a damaging impact on the country's plan to cut carbon emissions by 80 percent by 2050.

"You can develop shale and you can still achieve your carbon targets. The one caveat to that is that if the government chose to change its renewables support mechanisms that would mean the targets are not achievable," said Richard Sarsfield-Hall, principal consultant at Poyry, who led a report on the impact of shale gas on Britain's climate targets.

The report assumes shale gas projects in Lancashire in the north of England could add around 20 billion cubic meters of gas per year (bcm/y) by 2035, around 20 percent of Britain's current annual gas demand, based on estimates given by shale gas firm Cuadrilla Resources.

Poyry's research showed shale gas could lead to a higher cut in carbon emissions in the early 2020s than if no shale gas was developed as more coal plants would be replaced by gas-fired power plants, which emit around half as much carbon.

Additionally, higher domestic gas production would reduce the need to import liquefied natural gas (LNG), which emits more carbon than other forms of gas production.

Poyry estimated that Britain's reliance on LNG imports could be below 50 percent by 2035, compared with 60 percent if shale gas was not exploited.

A reduction in overall gas import needs would make available around 3.3 billion pounds per year that would no longer be spent on imported fuels.

Poyry estimates that Cuadrilla Resources' shale gas production can have an impact on Britain's gas market from 2021 onwards, when production levels will hit around 12 bcm/y.

"From 2012, gas prices are between 2-4 percent lower if Lancashire shale gas production proceeds as projected," said Poyry, adding these savings would amount to 8 billion pounds ($12.88 billion) annually.

The British government last year imposed a temporary ban on shale gas fracking after a series of tremors near a site close to the seaside resort town of Blackpool.

Various independent expert reports recommended fracking should continue under tighter surveillance and the government will issue a new estimate of reserves before the end of the year.

(Reporting by Karolin Schaps; editing by James Jukwey)