“Fracking has the real potential to drive down energy bills”

Cameron’s foray into the Shale gas debate is convincing. Who wouldn’t like lower energy bills? Who doesn’t want those potential 74,000 new jobs? Indeed, the tories heroic stance to mitigate the blunders wreaked by labour should be corrected (“Labour’s mismanagement of the economy means that many people are struggling with the cost of living today. Where we can act to relieve the pressure, we must”). Old blighty will battle through by a communal effort. After all, we’re not launching private companies to exploit our landscape from a fear of energy dependency, no! We’re leading the way (as the UK should) in this “technological endeavour” and no little kid on the playground will be left out of the goody bag.

“It has been suggested in recent weeks that we want fracking to be confined to certain parts of Britain. This is wrong. I want all parts of our nation to share in the benefits: north or south, Conservative or Labour. We are all in this together.”

Ah yes Cameron- share the benefits. The green pastures are endless (and those environmental consequences are balderdash). Let us help the little guy. Let’s be the big UK kid in the downtown ghetto sandbox. Let us respect the people’s wishes and construct the mutually beneficial endeavour that’ll cheapen costs and improve our economy.

Nothing like a load of tripe to incite me to start writing again.

From research into possible economic benefits of fracking, nothing is clearer than that a reduction in our bills is highly unlikely. From Bloomberg and Poyry energy consultancy groups’ research, the cost of shale extraction is likely to be significantly higher than for the US, with rates of exploitation too slow to offset decline in conventional gas production. The estimated wholesale gas savings of £380 million per annum from 2014 to 2035 won’t be passed on to the consumer as market prices will continue to be set by imported gas. While such a savings figure might seem large, even assuming a direct transfer of gas and electricity savings to the 63 million people living in the UK, this would mean only £6 and £6.82 extra lining our pockets respectively per person per year. Whilst Cameron sites inflationary US statistics as a potential boon, the differing geological structure and thus increased difficulty of extraction means extraction costs for the UK will be between $7.10-$12.20 /MMBtu contrasted to the US’s $4.54-$4.83 / MMBtu, with this being the best scenario. This best scenario excludes building local pipelines, processing equipment, potential ‘dry well’ situations and infrastructure impacts such as road deterioration due to a possible 22 million truck movements for water alone (by contrast we currently have 34.5 million vehicles licenced). Upfront costs alone, following Cameron’s hungry mantra of ‘10% of our 1300 trillion cubic feet of shale gas will provide gas for 51 years’ would require roughly £5 billion as part of the £100,000 community compensation deal. With private fracking companies like Cuadrilla offering out the tantalising ‘potential’ of lower bills in their press releases, yet being contradicted by their own employees (“We've done an analysis and it's a very small…at the most it's a very small percentage…basically insignificant,”- Mark Linder), a fudging of motives and consequences looks to be on the government’s agenda.

Meanwhile, the boost to jobs doesn’t reflect the investment. The disparity between fracking and sustainable energy research when comparing investment cost (and company profits) vs number of jobs available is fascinating. Caudrilla, operating in the sites where earthquakes halted drilling in April 2011 and on the protest site of Balcombe in West Sussex, estimates Lancashire gas alone to hold a value of £136 billion. Yet, exploring their website you can find that from late 2011 they hired “five entry-level Well Service Technicians and two Field Safety Specialists” and 50 people for the summer to complete the Geophysical Survey of Lancashire in 2012 – vast numbers indeed. Continuing to dangle the carrot of 6,550 total UK jobs (assuming higher-end scenarios and many well-pads), they additionally propose up to a £20 million payout to the government after commencing production in Lancashire. This again may seem like a decent sum until we put some other figures in play: for example, for working on road maintenance alone our government will be investing £10 billion by 2020: Road maintenance that will certainly be needed for areas where water demand for fracking will intensify.

To contrast, the UK government spending total on Energy in the Science and Research Funding allocation in 2010 as shown by the Department for Business Innovation and Skills (BIS) was £540 million. The Engineering and Physical Sciences Research Council provides the £439 million bulk of this, and supports all the government-funded research of renewable energy generation, fuel cells, energy storage and transport, carbon sequestration and nuclear research. Hardly a large sum – yet generating a substantial number of jobs. For business, 1.6% of total expenditure is invested into the energy and water research sector – that’s £251 million. Yet the returns of such ventures for employment are clear: the energy sectors see a raise of roughly 4% employment between 2010-2020 set to reach a total of 327,000, and with industries such as wind giving favourable estimates of up to 90,000 people employed by 2021. Certain estimates are even higher (2011), predicting 45,000 new jobs created within renewables alone and 22,000 jobs in the corresponding supply chains. More rose-tinted research by the Energy and Utility Skills Workforce Planning Model gives 32,500 electricity industry vacancies, 10,880 in gas and 16,000 vacancies in water, ripe to be filled between 2012-2025.  Studies measuring the impact of R&D on the economy and jobs are difficult – Private rate of return? Social return? Can we estimate the knock-on effects and spillover? Reducing to a basic model, rates of return were found to be positive in most countries and higher than for capital investment. Social return gives even greater gain – with examples more clearly viewed in medical research. An overall comparison of economic benefit of investing potential billions into fracking vs energy R&D spearheads us cleanly into more positive R&D impacts – So why the political kerfuffle, we might ask? Why justify fracking as an investment into jobs, when there are better avenues?

Of course, all these pacman-esque dodges are easily (and almost obviously) answered by Charlie Brooker. Cameron is a lizard.