Cuadrilla: Why Datamonitor thinks shale gas merits support

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21 August 2013, Gas

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Burning gas for power releases less than half the emissions produced from coal (390gCO2/kWh from gas and 910gCO2/kWh from coal). Despite the huge support for renewable energy generation in the UK, carbon emissions increased by 4% in 2012 due to the increased use of coal for power generation. Cheap coal from the US and high gas prices have been the cause of this; by way of comparison, in the US fracking has lowered gas prices to a quarter of those in Europe.

The myths surrounding fracking are becoming a political hurdle to progress, and Cuadrilla's operations in West Sussex have been suspended due to protests that have gained publicity and momentum in recent days. However, environmental concerns may be misguided. Protest banners reading "No fracking here or anywhere...we must utilize wind, sun, and sea" sum up the sentiments - and the confusion - surrounding fracking for shale gas.

Protesters appear to be concerned about some of the unknown effects of fracking, such as gas leaks, chemical leaks into groundwater, and the perception of increased risk of earthquakes. In fact, high methane concentrations in water supplies in the US reputed to have been caused by fracking have been disproved. In addition, UK shale gas reserves are at a greater depth than in the US, far below the water tables.

Two recent peer reviewed studies concluded that groundwater contamination from fracking is "not physically plausible." Of 20,000 wells drilled, there have only been a handful of cases of contamination that have been due to surface spills of fluids. And while minor earth tremors have been associated with fracking, the scale has been so low that no damage has been caused. Despite thousands of fracking sites in the US, tremors are nearly non-existent.

Rigorous regulation to guarantee that wells are properly sealed and that waste is safely treated may increase the cost of each well by around 7%, according to the International Energy Agency. Yet this remains a viable option. Far from banning fracking in the UK, if carried out safely the process merits considerable support - especially from the environmentally conscious. Ultimately the potential rewards of fracking in the UK merit the minor risks involved.


www.datamonitorenergy.com / asken@datamonitor.com / @DatamonitorEN

Source: MarketLine

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