Johnstone’s view - Shale Gas

Stonehaven
Stonehaven

This week, the UK Government invited companies to bid for the rights to explore for shale gas in a number of key areas, including the Scottish lowlands.

The area defined by this term is bounded in the North by the highland fault line which runs from Helensburgh to Stonehaven.

While reports in the press give the impression that there will be drilling rigs in the Mearns by the end of next week, I am confident that this hysteria will not be backed up by practice. Never-the-less, there will be some areas of Scotland where commercially exploitable reserves of oil and gas do exist and there are good reasons why we should not dismiss the prospect out of hand.

It seems that central Scotland is sitting on billions of barrels of shale oil and trillions of cubic feet of gas, according to the results of a detailed report by the British Geological Survey.

This could provide enough gas to meet Scotland’s needs for the next half-century. What the Government has announced this week is the first step towards the exploration of this recourse to establish its commercial viability.

The BGS report estimated that Scotland’s “Midland Valley” has shale gas resources of 80 trillion cubic feet, which is lower than the north of England, but there are also about six billion barrels of shale oil, which is higher than in areas explored south of the Border. The “Midland Valley” of Scotland, as the report describes it, lies between the Highland Boundary Fault and the Southern Upland Fault. Some of the oldest rocks in the valley region date from around 470 million years ago, experts say.

With Scotland only using about 170 billion cubic feet of gas a year, the estimated 10 per cent of recoverable deposits would be enough to meet gas demand here for 46 years.

Shale gas is controversial however, because it is recovered through hydraulic fracturing, a process which involves pumping a high-pressure water mixture in to the rock to release the gas inside. These findings will, no doubt, re-ignite the battle over the controversial use of “fracking” to get at underground deposits of shale gas.

So why do we need this new source of energy? Well, mostly because in recent decades, our Governments in both London and Edinburgh have made some pretty poor decisions when it comes to energy policy which, when taken as a whole, has left us largely, in energy terms at lease, up the proverbial creek without a paddle!

By now, we should have been at an advanced stage in the program to replace all our nuclear power stations with a new generation of plants which would have been safer, cleaner, more efficient and capable of powering the nation for the next sixty years while adding less than one percent to the total stockpile of nuclear waste which we will continue to have any way.

Instead, we are pressing our second generation nuclear plants into extended service, well beyond their design lifespan, with all the associated risk. This is exactly what was going on at Fukushima before the disaster there. We are following Japan down the same road.

We have made commitments over climate change which has required us to close down our coal-fired power stations and commit to gas generation in the medium term. Half the gas landed in Scotland comes from the Norwegian sector of the North Sea. More than half the gas burned in England comes from the European market where prices are set, in effect, by President Putin.

Here in Scotland, we have, I am told, developed a “love” of wind turbines. Well I don’t share that love and I’ll tell you why. The sight of the things doesn’t bother me; no, what bothers me is the vastly inflated cost of the electricity they produce.

While we have been making every possible mistake to add to fuel poverty and price our workers out of jobs through inflated energy costs, shale gas has been behind the cheap energy which has fueled the American miracle recovery. American shale gas has also become such a vital raw material for the chemicals industry that we are currently making arrangements to import it!

While we in this country have seen our energy prices double and re-double, we have also seen fuel poverty hit record levels. Some of us are in a position to just keep on paying – others are not. I know that there are people who can no longer afford to switch on the heating during our long cold winters. If you don’t believe me, perhaps you should get out more.

It’s time we considered the impact of all these bad decisions which have been made in recent decades and for once, do the right thing for the right reason.