Modern economies depend on energy. Keeping the lights on, running machines and vehicles – and the internet – all require power. There is of course the move to renewables such as wind and tidal, but there is a long way to go and we will be dependent on fossil fuel for many years to come.
In practice that means oil. US oil production hit a peak of 9.6 million barrels of oil a day in 1970 and has been in a slow decline ever since. Increasing oil prices meant that fracking became an economic possibility. Hydraulic fracturing, or fracking, is a technique designed to recover gas and oil from shale rock by drilling boreholes vertically and then horizontally, pumping in fluid under pressure, and capturing the gas trapped inside tiny pockets of rock from the network of small fissures created.
It has helped transform the US economy. Fracking has increased U.S. production of natural gas, drastically reduced energy prices, strengthened energy security and even lowered air pollution and carbon dioxide emissions by replacing coal.
Lower energy prices have put more money in the pockets of American families and businesses. Cheap energy is powering US factories, jobs have been created and it has been calculated that fracking is worth around $2000 dollars a year to households in areas where fracking takes place.
Could fracking have the same effect in the UK?
Shale gas fracking has resumed for the first time in the UK since it was linked with earthquakes in 2011.
Energy firm Cuadrilla confirmed the controversial process had restarted at its site in Lancashire after a legal challenge failed last month. The energy firm is currently drilling exploratory holes, but predicts that up to 20 wells will be built if it proves successful.
The energy company believe trillions of cubic feet of shale gas may be recoverable giving the UK a major source of fuel for the future, leading to tens of thousands of jobs being created.
Environmentalists see fracking as dangerous. It can cause small earthquakes, and it could lead to the release of gas which can contaminate groundwater, household water supplies and soil, with potential contamination of the food chain.
There are also concerns about the number of boreholes, along with the access roads pipelines and infrastructure. Anti-frackers suggest that it would industrialise the countryside and damage rural communities. On a small island, they hold, there simply isn’t room for fracking.
North Sea gas, once heralded as the energy of the future has been in decline since 2000. It means that the UK has gone from being a net exporter of gas to a net importer. Britain now imports nearly 60% of all gas used, with Norway the principal source and Russia a close second.
The weak pound is making all imports more expensive, and as a result, the UK’s gas bill is rising.
If fracking can produce the quantities its promoters claim, it would improve the balance of payments, drive down the cost of energy for consumers, and mean a major reduction in energy costs for business.
With the first tank of UK shale gas still in the ground it is impossible to put figures on the benefits to the UK economy of fracking. But it just might mean a boost for Britain just as dramatic as that on the other side of the Atlantic.
To find out more about a boost for your own finances, please call the Continuum team,
vox.com – How has fracking affected the US economy? – 30th July 2015
forbes.com – Fracking Has Its Costs And Benefits — The Trick Is Balancing Them – 20th February 2018
independent.co.uk – More than 6,000 fracking wells needed in UK to halve gas imports, study says – 25th April 2018