An eagerly anticipated and much delayed report from the Committee on Climate Change – dated March 2016, but only published 7 July 2016 – weighs up the pros and cons of developing a significant fracking industry in the UK.
Shale gas exploration and exploitation is the goal of the government. David Cameron, the UK’s prime minister, has said the UK is going “all out for shale”.
But it has little to show for it so far. The report points out that not a single production well has yet been drilled, and that the potential for exploitation remains highly uncertain.
The government’s cheerleading of the industry takes place alongside its legally binding target to reduce emissions by 80 per cent by 2050. But are these two aims compatible?
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The government believes that our strong regulatory regime will meet the conditions set out by the CCC, and therefore further regulations are not required.
Andrea Leadsom, energy minister, U.K.
Three tests
It is uncertain whether the UK shale industry will really take off, says the report. Its success depends on the economics of production and the productivity of the UK’s geology, as well as the challenges of public opinion.
But if an onshore oil and gas industry is established and grows quickly in the UK, it must meet three tests in order to be compatible with climate targets.
The first test is ensuring that emissions during development, production and decommissioning are “strictly limited”.
This means limiting methane emissions, banning production in areas where the land-use change would cause significant emissions, such as areas with deep peat soils, and requiring proper decommissioning of wells at the end of their lives.
“Left entirely unregulated, the emissions footprint of shale gas production could be substantial,” the report warns. And it adds that while technologies and techniques are available, the UK’s regulatory position is not yet assured, although it has potential to be world leading.
The second test is whether gas consumption can remain in line with carbon budget requirements. The CCC has already illustrated how much unabated gas can be consumed in the UK, and any usage beyond this would not be in line with the UK’s carbon budgets.
Therefore, any new sources of UK gas production must be used to displace imports, rather than increase the amount of gas that the UK consumes as a whole, the report says.
How much gas this means is largely dependent on whether carbon capture and storage (CCS) technology is widely deployed in the future.
Without CCS, gas consumption needs to drop by around 80 per cent by 2050 compared to today’s levels, the CCC has said. This would also make it more difficult to accommodate the emissions associated with production of gas, as there would be little scope in the rest of the economy to compensate for this increase.
The report says: “Even without additional emissions from onshore petroleum extraction, our analysis shows that the absence of CCS is likely to require near-full decarbonisation of surface transport and heat in buildings by 2050. It is difficult to see how significant further emissions reductions could be found to offset the impact of additional fossil fuel production”.
This relates to the third test, which is whether shale gas production emissions can be accommodated within the carbon budgets.
Domestic production of shale gas will lead to additional UK emissions, even if consumption is not affected and the process is tightly monitored, says the report.
Even if regulations are stringent, UK production could cause around 11 millions tonnes of CO2 equivalent per year in 2030, if the industry grows very quickly — more than 3 per cent of total allowable UK emissions under the proposed fifth carbon budget. If regulations turned out to be lax, emissions would be significantly higher.
Offsetting these emissions through other sectors would be possible but potentially difficult — the CCC says that it amounts to roughly the same savings as they calculated could be made in the whole agriculture sector under its central fifth carbon budget scenario.
It recommends that the government consider this difficulty in its plans on how to meet the fourth and fifth carbon budgets, which the government had previously committed to do by the end of 2016.
Report context
The CCC’s report meets a requirement under the Infrastructure Act 2015 to advise the government on the compatibility of shale development with UK carbon targets. The CCC must revisit its advice every five years, in each carbon budget period.
If the committee deems shale gas extraction to be contrary to the UK’s climate targets, the secretary of state must either remove companies’ shale gas extraction licenses or explain why they are allowing fracking to continue.
The requirement to consult the CCC was a late amendment to the 2015 Act, made in a week that had seen the House of Commons Environmental Audit Committee brand fracking “incompatible” with climate goals.
In the face of such opposition, key figures in the current government have strongly endorsed fracking, even going so far as incorrectly describing shale gas as “low carbon”. Today’s CCC report clearly contradicts this, saying that gas “is not low-carbon unless used with CCS”.
Nevertheless, it does allow the possibility of a shale gas industry within UK carbon budgets. As such, it may disappoint campaigners who had called for the CCC’s report to be considered during a recent planning decision over exploratory fracking in Yorkshire.
On the other hand, the CCC does insist on tight regulation of methane leakage: it says the “minimum necessary regulation” would limit this to between 0.3 and 0.9 per cent of gas throughput, with a central estimate of 0.5 per cent. Even stricter limits are technical possible, it adds.
There is a wide range of estimates of actual leakage rates in US shale regions, from well below 1 per cent to nearly 10 per cent. Beyond around 3 per cent, the use of shale gas to generate electricity is thought to be no better for the climate than burning coal.
Methane has a larger impact on the climate per tonne, but has a much shorter lifetime in the atmosphere than CO2. These figures are based on the impacts over a 100-year timeframe, known as GWP100.
The CCC says: The relative effect of today’s methane emissions on temperature in 2100 will be less than the GWP100 implies, while those later in the century, closer to the point of peak temperature, will have a more significant effect.
In an interview with Carbon Brief published this week, Prof Averil Macdonald, chair of industry group UK Onshore Oil and Gas, sets out her vision for how shale gas can play a role in decarbonising heat and transport.
A “green gas” system based on shale gas converted to hydrogen, and combined with pre-combustion carbon capture and storage, could be in place by 2035, she says. The UK will need to have started serious efforts to decarbonise heat and transport by 2030, if it is to stick to its planned emissions reduction path.
The CCC says it will consider the implications of a UK shale gas industry on global emissions in a report to be published later this year.
Government response
In a statement responding to the CCC report, energy minister Andrea Leadsom says: The government believes that our strong regulatory regime will meet the conditions set out by the CCC, and therefore further regulations are not required.
It’s worth noting that this statement reverses the CCC position on fracking and carbon budgets. Whereas the CCC says fracking would be “incompatible” with the budgets, unless its three tests are met, the government “welcomes the CCC’s conclusion that shale gas is compatible with carbon budgets if certain conditions are met”.
A more lengthy official government response explains that additional regulatory requirements, beyond those included in the CCC’s “current UK position”, will be considered on a “case by case basis”. It insists this means the CCC’s first test, on leakage rates, “will be met”.
On the second test, relating to shale gas displacing imports, the government asserts that “it is not believed that UK shale development will impact overall UK gas consumption”.
Similarly for the third test, on accommodating shale gas production emissions within UK carbon budgets by making additional savings elsewhere, the government says: The government’s commitment to meeting carbon budgets means that any additional emissions from shale gas production would be accommodated within carbon budgets and offset by lower emissions in other sectors.
It does not appear to offer any analysis or evidence to back up these assertions.
This story is published with permission from Carbon Brief.
