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IoD shale report based on ‘iffy assumptions’

21 September 2012

Commenting a new report released by the Institute of Directors today on the prospects for shale gas in the UK, WWF-UK said the report appeared to be based on some ‘iffy assumptions’. The group also said that the report overlooked the most important impact of a new global ‘dash for gas’, namely that it would drive climate change to dangerous levels.

WWF also pointed to recent comments by the Committee on Climate Change that overreliance on gas in the UK “would be incompatible with meeting legislated carbon budgets” [1]. The group said any future role for gas must follow the CCC's advice and that the Government's gas strategy must be compatible with meeting our legally-binding climate change commitments.

The group said that the argument that UK shale gas reserves could lead to 35,000 jobs being created and meet 10 per cent of the UK’s gas requirements for a century, was simplistic and based on unverified commercial resource estimates and guesswork. The executive summary of the IoD report creates confusion by not making a clear distinction between the independent estimates of technically recoverable UK reserves published by the British Geological Survey and the estimates by license holders such as Cuadrilla which mainly refer to the volume of gas thought to be in the ground not what is actually technically or economically recoverable.

Jenny Banks, energy policy officer at WWF-UK, said: “This report appears to take commercially driven industry estimates at face value and make some fairly iffy assumptions about the potential for shale gas in the UK. Although the British Geological Survey may revise its estimate of technically recoverable reserves of shale gas in the UK upward shortly, the fact that estimates currently vary by trillions of cubic feet highlights why we really shouldn’t be gambling on shale gas.

“More importantly, in reviewing the environmental problems associated with shale gas, the IoD skates over the most important one; climate change. There is no evidence that shale gas can reduce UK emissions and as the International Energy Agency themselves point out, a golden age of gas certainly wouldn’t be a golden age for the climate, and could drive global temperatures to dangerous levels.”

WWF also questioned the IoD claim that shale gas could have a major impact on UK gas prices, arguing that US gas prices have been driven to unsustainably low levels due to the current US gas glut leading to many companies writing down the value of their shale assets. A recent Deutsche Bank report highlighted that US experience of shale gas production was unlikely to be replicated in the UK and EU. Furthermore recent reports have pointed to a surge in UK spending on gas imports [2].


Notes to editors

1. Committee on Climate Change: Letter to Ed Davey on unabated gas-fired generation, 13 September 2012: http://hmccc.s3.amazonaws.com/EMR%20letter%20-%20September%2012.pdf

2. Reuters: UK overseas gas imports to surge to $11 billion by 2015, 19 September 2012: http://uk.reuters.com/article/2012/09/19/uk-energy-gas-britain-imports-idUKBRE88I0J620120919

For more information:

George Smeeton, Senior Press Officer WWF-UK
Tel: 01483 412 388, Mob: 07917 052 948, email: GSmeeton@wwf.org.uk

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