Fracking fallacies, love from Dave

Andrew Pendleton

23 August 2013

'Dear elderly, fuel poor householder. We've started fracking. It's highly unlikely, but this just might help cut your energy bills in the early 2020s. Hope this helps. Love from Dave.'  

In a nutshell, that's the Government's position on fracking. And the Government is not alone.

On Wednesday, the Times ran a (£) front page story whose headline read 'Fracking will cut energy bills, says poverty chief'. The sub-editors at The Times had clearly been popping the extrapolation pills on Tuesday evening, as it turned out that the poverty chief in question - Derek Lickorish, who chairs the Fuel Poverty Advisory Group - was nowhere near as unequivocal. Quoted later in the article, in fact he said "Extracting natural gas from shale has the potential to reduce the costs of gas for heating and generating electricity".

As a relatively fit man in my forties, I have the potential to run a marathon. My mum's garage has the potential to house a Ferrari. My son has the potential to play for Chelsea (okay, he probably doesn't). But I can tell you categorically that these are all highly unlikely to happen.

I can also tell you, in an equally categorical fashion, that most experts - from the Department of Energy and Climate Change to Bloomberg's energy advisers, think that the potential of fracking to reduce our household energy bills to any significant extent falls into the same likelihood bracket. It's highly unlikely.

Economist and Professor Paul Ekins of University College London goes further. He argues that UK shale may not even be economically viable to extract.

According to The Times, Mr Lickorish was basing his view on a report commissioned by the Department of Energy and Climate Change. The only DECC-commissioned report I know of looking at fracking and its potential to reduce our energy bills is this one.

I've read it and it's complicated. Gas prices in Europe are influenced by a range of factors and are still largely tied to the oil market, but it says that unless we produce shale and other 'unconventional' sources of natural gas in a very, very big way - in several European countries at once, supplying around 20 per cent of all of the EU's gas - fracking is highly unlikely to have any impact on gas prices in the UK (though other factors may).

Even if the Poles, the Brits and other nations do somehow manage to frack hard enough to supply 20 per cent of the EU's demands, the report says that this won't happen until 'the early 2020s'. So the Government, the Times subs, the fracking hawks and the Twitter trolls are all guilty of giving false hope to fuel poor households in Britain (although in less guarded moments, even the frackers admit the process is highly unlikely to have any significant impact on bills).

At this point, I should be honest about Friends of the Earth's concerns. We do understand the need for some gas to be burned to generate power during the transition to a future in which we tap the massive and much more tangible wind, solar, and marine renewable energy resources in and around the UK. But at precisely the moment fracking is likely to start delivering burnable gas - the early 2020s - the quantity that we can burn and keep within our ever-tightening carbon budgets is frankly minimal.

So, we'll have punched the UK full of holes - alienating thousands of communities along the way - to extract a fuel that may not be economic, almost certainly won't help us cut fuel bills, and which we cannot burn anyway because of climate change. So much for energy security.

Derek Lickorish in The Times is of course right to raise the scandal of fuel poverty. One in five UK households are classified as fuel poor and the UK is pretty much the only European country in which there are 'excess winter deaths'; a chilling phrase that masks the tragedy of often older people dying because they live in cold homes that are too expensive for them adequately to heat.

As fracking is highly unlikely to cut our fuel bills and even then not until the early 2020s, what are those living in fuel poverty supposed to do in the meantime?

Government officials would probably answer 'take out a Green Deal loan'. And therein lies the rather grubby and poorly insulated truth. The government's Green Deal, aimed at encouraging people to borrow money to improve home insulation against the promise of lower bills in the future, is a disaster in the making, with a staggeringly low number of people signed up six months after its launch. Plus at the same time as launching the Green Deal, the Government has cut the amount of money available to poorer households for insulation.

Its careless words and procrastination over a new Energy Bill - and its refusal to set a very clear target for cleaning up UK power generation - are also threatening a burgeoning renewable energy industry.

It's not hard to reach the conclusion that the Government's championing of fracking is largely designed to spare its blushes as it botches the rest of the UK's energy policy and as it comes under fire for the inexorable rise in people's bills (which, by the way, has been mostly due to the rising price of gas).

The only sure-fire way to bring down household energy bills in the short term is to cut the amount of energy we still waste - we are the most wasteful domestic energy users in Europe. Instead of a fancy-Dan finance package, we need a truly massive, Government-funded programme to insulate UK homes and offices (which would not only save the economy billions, but would also create tens of thousands of jobs and stop those 'excess winter deaths').

Instead of throwing lavish tax breaks at the frackers and other big oil and gas companies, the Chancellor should recycle the billions he'll be getting in the coming years from carbon taxes to fund the energy saving we need. Meanwhile, he should be driving forward investment in UK renewable energy that, compared with relying on gas, will provide more affordable power in the long-run.

What a shame that the message on fracking from the PM doesn't read:

'Tell you what, let's leave the stuff underground, create jobs and warm homes with a big push on insulation and from our fabulous renewable resources a clean energy system of which we can not only be truly proud, but which will also save us money in the future. Oh and stop climate change. This does help. Dave.'