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Reporting of Lord Smith's views on shale gas misses the important caveats

  • 09 May 2012, 12:00
  • Robin Webster

Reading yesterday's headlines announcing the head of the Environment Agency's support for shale gas fracking, you could be forgiven for concluding that Lord Smith has joined the ranks of shale gas enthusiasts who have been so enthusiastically promoting the technology in the UK media over the last few months.

Smith's speech at Royal Society of Arts yesterday evening, however, gave a different - and more interesting - picture.

The new kid on the block

In his speech, Lord Smith echoed other analysts - including the head of Ofgem, as we covered last week - in suggesting that whatever the merits or otherwise of burning gas, the development of more gas capacity looks increasingly likely as renewables take time to come onstream at capacity, and nuclear power struggles to attract investment. Whilst gas is a lower-carbon fuel than coal, Smith expressed the fear that a drift into gas would "land us" with an array of gas-fired power stations which are likely to be around for some time.

Were significant shale gas resources available, this would of course become more likely. Recent estimates of the amount of shale gas available to in the UK aren't exactly definitive, but Lord Smith stated that the amount of gas is "likely to be significant, even if it isn't huge." (Given Smith's job, this might offer an insight into likely conclusions from the British Geographical Society's forthcoming assessment of the onshore potential for shale gas in the UK).

In this context, Smith argued, it is essential that gas should only be developed if gas plant can be fitted with carbon capture and storage technology:

"This is why it is essential that we look to develop carbon capture and storage for gas and not just for coal. CCS is quite simply a sine qua none. If we are to have a chance of reducing our greenhouse gas emissions around the world, CCS has to be brought into play for both coal and gas"

As we discussed yesterday, government policy is somewhat behind the curve on this one.  DECC announced in March that power plants constructed now will be subject to an emissions performance standard - which regulates the amount of pollution a plant can emit as it produces electricity - to 450g of carbon per kilowatt-hour. Because of the carbon intensity of different fuels, this means that new coal plants would need to fit CCS, but gas power plants would not.

It also presents something of a problem because commercial scale CCS doesn't really exist yet. Lord Smith, rather understandably, said that we need to "get a move on" in developing and commercialising carbon capture and storage technology - which, as he noted, is expected by the International Energy Agency to provide one fifth of the world's emissions reductions by 2050.

Support for renewables

A significant chunk of Smith's speech was devoted to bigging-up renewable power and the efforts of business to take the lead in the green economy. He argued that the UK could "lead the world" on wave and tidal energy generation, and that we should not "lose out" over these newer renewable technologies, as we did on wind power twenty years ago.

Smith also suggested that the public and media debate on these issues is backsliding - arguing that three years ago "the environment, the values of natural resources and the realities of climate change were all generally acknowledged, accepted and endorsed as political imperatives across the spectrum of public discourse" but that now

"I fear their political salience has waned, and part of my purpose in being here tonight is to shout out as loudly as I can that the environment still matters, that green is as important as growth, and that the two do absolutely walk hand in hand".

In a way, though, Smith's speech offered an interesting insight into the degree of unanimity that remains across the political and policy spectrum about the importance of sorting out the UK's energy sector. Smith praised the continuing cross-party commitment to tackling climate change and its consequences in the UK, and in bemoaning the use of green polices as a 'political football' he was in agreement with a speaker from the Confederation of British Industry, who emphasised that constantly changing policies make businesses "nervous" and that there is a need for clarity of direction across the political spectrum.

In the questions, Lord Smith's final point was that "one of the besetting problems of democracy" that it works on electoral timescales, which inevitably builds in short-term thinking - whereas business, particularly the energy sector, needs to think on long-term horizons.

The chair concluded that in order to achieve that long-term thinking, it may be that politicians need to catch up with where businesses and the public already are, rather than the other way around.

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