Why fracking for shale gas won't bring Britons cheap energy bills

• By David Elmes, Warwick Business School • Debate over the development of shale gas in the UK and its potential benefits has intensified in recent weeks as the prime minister visited a fracking site in Lincolnshire to make announcements over how more money from any gas produced should go back to local communities. Media reports regularly claim that shale gas will lower domestic energy bills, linking shale gas to another political hot potato – energy’s role in what the Labour party has called the “biggest cost-of-living crisis in a generation”. Those who say bills will fall in the UK look to the US, where shale gas production has lowered gas prices and supported an economic recovery through cheap energy. We can have that here too, goes the argument. Well, the British experience is unlikely to follow a similar path to that in the US but it’s still attractive for the economy to develop shale gas if it can be done commercially and with the right environmental and social safeguards. These are challenging hurdles to overcome, however. The US shale gas “revolution” has been impressive in many ways. Back in June 2008, US gas prices peaked at more than US$13/Mbtu (natural gas is priced in millions of “British thermal units”, abbreviated as Mbtu). The discussion at the time was of the US needing to import liquefied natural gas (LNG) and billions of dollars were invested in constructing import terminals. But rising prices had encouraged small, entrepreneurial drilling companies to develop cost effective ways to produce gas from shale rock. Domestic US shale gas production started to rise. But echoing the original development of oil in north-eastern US a century or so ago, a boom in gas supply within the US plus the financial crisis led to a bust in prices which fell as low as $2/Mbtu in April 2012. In January 2014, the US price is back to more than $4/Mbtu ...Zum vollständigen Artikel

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