February 24, 2012

Gas Works? Shale gas and its policy implications

Gas Works? Shale gas and its policy implications says that the government is “unnecessarily gambling with billpayers’ money”. It says that the UK’s energy generation plans are based on forecasting future gas prices which is a flawed strategy, potentially resulting in the UK missing out on the potential economic and environmental benefits of shale gas.

Current Electricity Market Reform (EMR) proposals, which enable the government to plan and direct the future energy generation mix, are based on the view that future gas prices are likely to be high. No-one can predict future gas prices but shale gas developments suggest prices may be lower than previously assumed. The international Energy Agency’s forecast for gas prices in 2030 with the emergence of unconventional gas is a fifth lower than in its previous, pre-shale projection.

The Department for Climate Change’s own figures show that the costs of its policies will be £22bn higher, if future gas prices are low than if they are high. The report urges the government to recast the EMR to allow cheapest emissions reductions to emerge.

Report Impact

The Royal Society report on shale gas extraction cites Gas Works? on a number of issues https://royalsociety.org/policy/projects/shale-gas-extraction/report


Simon Moore

Senior Research Fellow for Environment & Energy, 2010-14

Simon Less

Head of Environment & Energy, 2010-2012

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