What’s the Fracking Problem?

 

Anyone interested in the energy sector will have heard of fracking, in fact many people uninterested in the energy sector will, by now, have heard of fracking, so why has this relatively new technology been thrust into the spotlight? (Need to know how fracking works? - http://www.bbc.co.uk/news/uk-14432401)

The US has been the largest proponent of fracking (with an estimated 1m of the 2.5m historical global ‘fracking’ sites), but the UK has most recently seen debates surrounding the issue of fracking, particularly after permission was granted for exploratory drilling in sites in the north-west and south-east of England in the 1st half of 2013.

The hunt for a cheaper, more secure, source of natural gas has pushed fracking to the top of the agenda. Let’s look at the UK electricity production mix to see why both the UK government and the gas companies are keen to progress with investigative fracking drills;

 

Electricity Production Mix in the UK 1990, 2004 & 2011

Fuel

1990

2004

2011

Gas

0.05%

40%

34%

Coal

67%

33%

35%

Nuclear

19%

19%

20%

Renewables

0%

4%

7%

Hydro

3%

1%

1%

Imports

4%

2%

2%

Oil

7%

1%

7%

 

Total Electricity Produced

 

302,936GWh

 

358,313GWh

 

364,548 GWh

 GMR Data 2013                               

 

As we can see from the table above 34% of the 364,000 GWh of electricity that was produced in the UK in 2011 was produced via gas. After electricity losses totalling 28,946 GWh and electricity actually used in the energy industry totalling 29,720 GWh (oil & gas extraction, petrol refineries etc.) the UK domestic, commercial and industrial sectors are left with 317,575 GWh. 1 & 2

 

Electricity Usage in the UK 2011

Use

GWh

Percentage

Industry

97,820

31%

Commercial

78,206

25%

Domestic

114,698

36%

Public Administration

18,891

6%

Agriculture

3,871

1%

Miscellaneous

4,089

1%

 GMR Data 2013                                

 

So we can see that in the production and consumption of electricity gas is a major player. As the North-Sea gas fields, that supply the UK, produce less gas annually and the UK becomes more reliant on international gas interconnectors, the role of a safe, secure, domestically produced gas supply becomes increasingly attractive to both the UK Government and major gas suppliers, and ultimately the UK population as a whole.

 

Aside from electricity generated via gas, natural gas use in people’s homes makes up two fifths of total gas use in the UK. Gas use domestically has tripled since 1970, with principle uses being; space heating, water heating and cooking. So the cost of gas for domestic use is 100% for gas (obviously), and 34% for electricity; this equates to a maximum of 67% of domestic fuel bills made up of gas. Commercial and industrial processes vary wildly so it is tougher to ascertain energy use by source, but we begin to see how important gas is for domestic, commercial and industrial use.

 

The attraction of sourcing gas, through fracking, to the UK government is that, in theory, they would hope to stabilise gas prices – they will try and win votes by showing that they have the energy providers providing fair deals to all users. Because that is what it boils down to; if people cannot afford to heat their homes, if people are living in supposed or actual ‘fuel poverty’ then the government will feel the hit at the next election, regardless of whose ‘fault’ it is. If they cannot keep a cheap abundant supply of gas & electricity to people’s homes, offices and industries then they have little hope of staying in government. That is why fracking has become the buzz word in the energy sector.

 

1 - https://www.gov.uk/government/statistical-data-sets/historical-electricity-data-1920-to-2011

2 - https://www.gov.uk/government/publications/electricity-chapter-5-digest-of-united-kingdom-energy-statistics-dukes